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Software and network infrastructure sales outpace device sales in Q2 2023

IT distributor revenue topped $19.5 billion in the second quarter of 2023, reflecting a year-over-year decline of 7.2%, as reported in the North America Distribution Tracker (NADT) from International Data Corporation (IDC). For the second consecutive quarter, the device categories of personal computing and audio/video saw double-digit year-over-year declines of 22.3% and 23.6% respectively. However, these declines were slightly less severe than experienced in the first quarter of 2023. In contrast, the software and network infrastructure product groups enjoyed continued growth in the quarter – up 2.7% and 43.2% year-over-year respectively – gaining some additional share of overall distribution revenues in North America.

“We are seeing companies continue to prioritize spend on IT infrastructure projects and distribution is a key partner to source the multi-vendor solutions these companies need,” said Ruth Flynn, research vice president, IDC Tracker & Data Products.

Software gained 1.7 points of share year over year, just edging out personal computing to hold the largest share of second quarter distribution revenues, which is a first for this channel. The strength of software product sales through distribution is driven by system infrastructure software markets such as data replication and protection software and network security software.

Network Infrastructure saw the largest year-over-year growth of any product group, which resulted in a 4.7-point distributor revenue share increase for this market. Ethernet Switches and Access Points are the products that are driving growth with Cisco and HPE as the clear top performers. Additionally, this growth in hardware sales translates into a growth in the sales of the upgrades and renewals of the software embedded on these hardware products.


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