IT distributor revenue declined 9.6% year over year to $19.6 billion in the third quarter of 2023, according to the IDC North America Distribution Tracker (NADT). The decline continues to be led by reduced demand for devices like PCs as consumers respond to higher inflation and retreat from the buying patterns of the previous two years. Meanwhile, Network Infrastructure maintained the growth trajectory exhibited in recent quarters.
“We continue to see resilient enterprise spending in the networking, software, and services categories as businesses prioritize digital transformation,” said Ruth Flynn, research vice president, IDC Tracker & Data Products. “However, devices remain soft as consumer electronics, peripherals, audio/video, and PC categories declined. Even enterprise infrastructure hardware saw declines as companies carefully prioritize their investments.”
Network Infrastructure revenue was $2.45 billion in the third quarter and Ethernet Switches achieved 55.6% year-over-year growth, continuing its five-quarter growth streak. Cisco remained the category leader with double-digit growth and more than 60% of the revenue share.
Software revenue reached $3.9 billion with a decline in year-over-year growth of 2.7%. System Infrastructure Software saw revenues grow compared to the previous quarter but experienced a 3.5% decline year over year to $2.1 billion. The top 4 companies in the System Infrastructure Software category all saw double-digit growth in the quarter, reducing the stratification among the top 3. Palo Alto Networks emerged as the category leader with year-over-year growth of 15.7%, underscoring the strength of security software.
The personal computing market saw a double-digit decline in revenues for the fourth consecutive quarter in Q3. However, the decline appears to be leveling out as the $3.6 billion in sales recorded in Q3 was relatively flat compared to Q2. Among the top PC companies, Acer was a bright spot, recording two consecutive quarters of year-over-year growth (at 6.7% and 12.5% respectively) and ending Q3 closing in on a position among the top 5.