Monday Morning Impact – August 11
IDC: IT Distribution Revenues Soar to New Highs in Q2 Driven by AI
The IT distribution channel in North America posted record high sales in the second quarter of 2025, surpassing the previous Q2 high seen during the pandemic, according to IDC. Distributor Revenues came in at $21.8B which is a 7.4% increase year-over-year. All the largest categories grew in Q2 with hardware categories exhibiting the strongest growth; Personal Computing grew 12.1% year-over-year, Network Infrastructure grew 13.3% year-over-year and for the first time, Components & Semiconductors joined the top five product groups after recording 22.9% year-over-year growth. This growth for Components & Semiconductors is driven by a huge increase in sales through distribution of GPUs.
“The remarkable surge in GPU sales, exceeding 575% year-over-year, is largely driven by the unwavering emphasis on AI,” said Ruth Flynn, research vice president, IDC Tracker & Data Products. “With GPU supply chain constraints easing, the demand for AI infrastructure is expanding beyond major cloud service providers to large enterprises, and distribution channels are seizing the opportunity to meet this growing demand.”
The focus on AI is bolstering sales across many hardware categories. AI PC sales in Q2 generated nearly $2 billion in revenue, reflecting a significant shift in the product mix of personal computing devices—from less than 10% AI PCs to over 25% within the past year.
The Network Infrastructure product group exhibited a healthy return to growth in Q2 and recorded $2.3B in sales. Backlog orders have been deployed, and enterprises are putting in orders for new hardware that can keep up with AI workloads and leverage modern architectures, according to the report.
While software and services revenues didn’t grow as fast as hardware, these categories still grew at 5.9% and 2.3% respectively year-over-year. Software and services revenues now represent approximately 40% of total sales through the distribution channel, as partners increasingly rely on distributors for their expertise in delivering multi-vendor solutions.
The IDC report was developed with cooperation from the Global Technology Distribution Council (GTDC). The data in these Trackers is actual sales data collected weekly from sales receipts across the largest distributors in North America for more than 1,000 brands over several years.
Channel Impact®
The new research points to solid growth for indirect sales partners leveraging distributors.
Gartner Forecasts Worldwide End-User Spending on Information Security to Total $213 Billion in 2025
Worldwide end-user spending on information security is projected to reach $213 billion in 2025, up from $193 billion in 2024, according to Gartner, Inc. Spending is estimated to increase 12.5% in 2026 to total $240 billion.
“Established security spending will continue as normal, but some organizations are being more cautious with any new security spending in this highly uncertain and challenging climate,” said Ruggero Contu, Sr Director Analyst at Gartner. “However, higher defense budgets, rising threats, increasing regulatory pressure and better cybersecurity awareness – especially among small and medium-sized businesses – will keep cybersecurity spending strong in the medium to long term.”
Security software is the fastest growing segment because more companies continue to move from on-premises to cloud-based systems, which brings new security risks. Cloud security posture management and cloud access security brokers are the main drivers in this segment.
In the forecast period, rising threats and the expanding use of AI and generative AI (GenAI) — by both internal users of AI and attackers — will remain key growth drivers.
Gartner clients can read more in “Forecast: Information Security, Worldwide, 2023-2029, 2Q25 Update.”
Channel Impact®
The data underlines solid opportunities for channel partners engaged in the IT security space.
Netgear Announces Professional Services for Business Customers and New Head of Systems Engineering
Netgear, a San Jose-based networking company has rolled out a new catalog of professional service offerings for business customers.
The company has also appointed Massimo Mazzeo Ocello, as its new VP of Global Systems Engineering and Customer Support and Services. Mazzeo joined Netgear in April, bringing more than 20 years of international leadership experience across systems engineering, technical pre-sales, product management, and managed services. Reporting to Business President and GM Pramod Badjate, Ocello will emphasize reductions in complexity for purchases and deployment.
“The key goal of Netgear’s professional services is to simplify both AV-over-IP and IT rollouts while making the fundamental shift to outcome-driven engagements that go well beyond product delivery,” said Mazzeo. “The idea of professional services is well-established in the IT industry, but we’ve seen the demand for the same kind of support for AV implementations skyrocket in recent years and felt the time was right to start there.”
The company’s professional services strategy is intended to ensure reliable, successful installations, accelerate time to value, reduce deployment risk for customers and partners, and provide customers with a trusted business partner.
This launch marks the beginning of a phased rollout, with future offerings to include advanced design and planning, training and certification programs, and premium support tiers.
Channel Impact®
This new tier of service is intended to ensure the smooth operation of critical installations and live events. The design of the offering was based on Netgear’s expertise as well as feedback from more than 450 AV manufacturing partners.
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