IT Distribution Revenues Return to Growth in Q4

In the fourth quarter of 2024, Distributor Revenues in North America grew 2.3% year over year, landing at $21.4 billion, according to IDC. However, this solid end to the year was not enough to outweigh weaker sales in earlier quarters, and 2024 ended down 1.1%.

Product groups driving growth in Q4 included Software coming in at 9.7% year-over-year and Personal Computing which beat expectations and grew an impressive 16.2% year-over-year. The performance in these categories was enough to offset a year-over-year decline in Services of -5.5% and the anticipated decline in Network Infrastructure of -6.0% year-over-year.

“Software has seen growth steadily rise from 8.4% in Q2 to 9.7% in the second half of 2024 while other categories have seen larger shifts related to both post-pandemic as well as new market dynamics,” said Ruth Flynn, Research Vice President at IDC Tracker & Data Products. “PC growth surged in Q4 fueled by rising AI spending, commercial replacements, and ahead of potentially rising taxes while revenue from Network Infrastructure continued to decline from a 2023 surge and subsequent order reductions while new inventory is deployed.”

Personal Computing returned to normal distributor revenue levels in 2024 after a significant contraction in 2023. The $3.75 billion in sales recorded in Q4 continues to be fueled by AI PC configurations, which grew 141% year-over-year. The Top 5 Brands all enjoyed double-digit year-over-year growth with HP leading the pack at 25.8%.

Software sales in Q4 came in at $4.55 billion. The two largest categories, Security Software and Storage Software, which account for over 40% of software sales, grew at 6.2% and 13.4% year-over-year, respectively. But it was the third largest software category, Physical and Virtual Computing Software, that really exhibited impressive growth in the fourth quarter coming in at 82.1% year-over-year. All of the top three vendors in this market enjoyed growth, but VMware and Citrix stood out with 350% and 218% year-over-year growth respectively.