IT Distribution Revenues Remained Under Pressure In Q4 2023, According to the IDC North America Monthly Distribution Tracker, Powered by GTDC

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• Ruth Flynn  Email: rflynn@idc.com  Phone number: 508-988-6992
• Michael Shirer  Email: press@idc.com  Phone number: 508-935-4200

NEEDHAM, Mass., January 23, 2024 – IT distributor revenue declined 6.2% year over year to $20.6 billion in the fourth quarter of 2023 (4Q23), according to the IDC North America Distribution Tracker (NADT). This marked the fifth consecutive quarter of year-over-year revenue decline coming after nine quarters of growth that followed the beginning of the COVID pandemic in early 2020. During this period, enterprise spending, including software and services (the largest categories in IT Distribution) as well as networking, have seen consistent growth. Consumer categories, such as personal computing, audio/video (AV), imaging, consumer electronics, and peripherals and accessories enjoyed a surge in spending during the pandemic but have recently been declining from pandemic highs.

"Recovery and repercussions of the pandemic continue to impact the IT distribution market going into 2024," said Ruth Flynn, research vice president, IDC Tracker & Data Products. "From macro conditions like stabilizing inflation to the drivers of technology spending in enterprise and slow consumer markets we continue to see the market adapting to the pandemic disruption. Despite the difficult current environment, we expect overall IT distribution spending to see growth later in the year, and to see much stronger growth from some categories and vendors."

The fourth quarter and particularly December is always a significant time of year for software sales. While December 2023 came in a bit soft, for the quarter overall software sales through distribution grew 1.1% year over year to $4.27 billion. Over 50% of software sales through distribution were for System Infrastructure Software. This includes the Security software category where Palo Alto recorded strong sales and year-over-year growth of more than 100%. Storage software sales were also strong, with Nutanix achieving 21% year-over-year revenue growth.

After five consecutive quarters of double-digit year-over-year growth, the Network Infrastructure product group has cooled off to just to just 1.7% year-over-year growth as pandemic backlogs have been cleared. The quarter closed with $2.37 billion in sales with Ethernet Switches still showing year-over-year growth of 9.5% but Wireless LAN contracted significantly with a 30% year-over-year decline in revenues.

Contraction in the Personal Computing product group slowed from double-digit decline in previous quarters to a 7.6% year-over-year decline in 4Q23. With total sales of $3.3 billion, the market has settled back to pre-pandemic levels. And while reduced sales for PC peripherals and other consumer devices have persisted into 4Q23, hopefully this trend is an indicator of increased sales for PCs in 2024.

IDC's North America Weekly Distribution Tracker and North America Monthly Distribution Tracker are built on the exclusive partnership between IDC and the Global Technology Distribution Council (GTDC) and provides the industry's most comprehensive view of technology distribution data and market trends in the U.S. and Canada. 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. This data is mapped to IDC's taxonomy with over 200 categories organized into 13 distinct product groups with detailed product attributes across categories.

For more information about the North America Weekly and Monthly Distribution Trackers, powered by GTDC, please contact Ruth Flynn at rflynn@idc.com.

About IDC Trackers

IDC Tracker products provide accurate and timely market size and segmentation, vendor share, and forecasts for hundreds of technology markets from more than 100 countries around the globe. Using proprietary tools and research processes, IDC's Trackers are updated on a semiannual, quarterly, monthly, and weekly basis. Tracker results are delivered to clients in user-friendly Excel deliverables and on-line query tools.

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About IDC

International Data Corporation (IDC) is the premier global provider of market intelligence, advisory services, and events for the information technology, telecommunications, and consumer technology markets. With more than 1,300 analysts worldwide, IDC offers global, regional, and local expertise on technology, IT benchmarking and sourcing, and industry opportunities and trends in over 110 countries. IDC's analysis and insight helps IT professionals, business executives, and the investment community to make fact-based technology decisions and to achieve their key business objectives. Founded in 1964, IDC is a wholly owned subsidiary of International Data Group (IDG), the world's leading tech media, data, and marketing services company. To learn more about IDC, please visit www.idc.com. Follow IDC on Twitter at @IDC and LinkedIn. Subscribe to the IDC Blog for industry news and insights.

About the GTDC

The Global Technology Distribution Council is the industry consortium representing the world's leading tech distributors. GTDC members drive an estimated $150 billion in annual worldwide sales of products, services, and solutions through diverse business channels. GTDC conferences support the development and expansion of strategic supply-chain partnerships that continually address the fast-changing marketplace needs of vendors, end customers, and distributors.

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