IT distributor revenue in North America fell 6 percent to $19.1 billion in the first quarter of 2023, IDC said.
The decline in IT distributor revenue in North America was driven by reduced sales in consumer device categories like personal computing and AV which saw double-digit year-over-year revenue decrease by 28.3 percent and 24.5 percent, respectively.
Software, Services and Network Infrastructure enjoyed positive year-over-year growth and illustrate how dynamic the distribution channel can be.
Personal Computing sales through Tier 1 IT distribution mirror the trends in the overall market, and after two quarters of revenue declining by more than 20 percent, revenues are down to roughly pre-pandemic levels.
Personal computing slipped below software to become the second largest category for NADT revenue. Connected to this sharp contraction in personal computing sales is the drop in PC Monitor revenues which declined 35.5 percent and pulled down the whole AV product group.
“Following a surge in sales during the COVID pandemic, device sales are slowing in response to inflation and other spending priorities,” said Ruth Flynn, research vice president, IDC Tracker & Data Products. “Spending on enterprise and network infrastructure, software and services has been more resilient as companies continue to invest in digital transformation and enterprise resiliency.”
Network infrastructure grew 19.7 percent in Q1 2023 and was spurred by substantial growth in ethernet switches and access points at 36.7 percent and 50.9 percent, respectively. These two categories account for 63 percent share of networking infrastructure devices with Cisco, HPE, and Juniper leading the market.
Both software and services grew 6.6 percent to $3.86 billion and $3.3 billion, respectively. Several of the Top 5 companies in the software group enjoyed significant growth in Q1 2023 including Autodesk at 30.5 percent growth and Palo Alto Networks at 20.6 percent.
Services associated with network infrastructure hardware as well as services associated with software sold well through the distribution channel, strengthening services position among the Top 3 product groups.
