IT distributor revenue in North America faced a substantial setback, declining by 9.6 percent year over year to $19.6 billion during the third quarter of 2023, the latest IDC report said.
This downturn was primarily driven by decreased consumer demand for devices, particularly personal computers (PCs), in response to the challenges posed by higher inflation and a shift away from the purchasing habits established in the previous two years. Meanwhile, the Network Infrastructure sector remained a bright spot, continuing its growth trend.
Ruth Flynn, research vice president at IDC Tracker & Data Products, emphasized the resilience of enterprise spending, particularly in networking, software, and services, as companies prioritize their digital transformation initiatives. However, the scenario for devices was less favorable, with consumer electronics, peripherals, audio/video equipment, and PCs all experiencing declines in demand. Even the enterprise infrastructure hardware segment faced declines, as businesses took a cautious approach to their investments.
In the third quarter, Network Infrastructure revenue reached $2.45 billion, with Ethernet Switches leading the way with a remarkable 55.6 percent growth, extending its growth streak for the fifth consecutive quarter. Cisco retained its dominant position in this category, achieving double-digit growth and capturing over 60 percent of the revenue share.
The software sector amassed revenue of $3.9 billion, though it experienced a 2.7 percent year-over-year growth decline. System Infrastructure Software revenues showed improvement when compared to the previous quarter but suffered a 3.5 percent decline, resulting in a total of $2.1 billion.
Notably, the top 4 companies in the System Infrastructure Software category all registered double-digit growth in the quarter, reducing the gap among the leading three. Palo Alto Networks emerged as the category leader, boasting an impressive 15.7 percent growth, highlighting the robust demand for security software.
On the other hand, the personal computing market faced its fourth consecutive quarter of double-digit revenue decline in Q3. However, the decline seems to be stabilizing, with Q3 sales of $3.6 billion remaining relatively flat compared to Q2.
Among the top PC companies, Acer stood out, recording two consecutive quarters of growth at 6.7 percent and 12.5 percent, respectively. This growth trajectory places Acer on the cusp of breaking into the top 5 PC vendors.
The report indicated third quarter of 2023 brought a mix of challenges and opportunities for the IT distribution industry, with shifting consumer preferences and ongoing digital transformation initiatives continuing to shape the landscape.
