In the fourth quarter of 2024, Distributor Revenues grew 2,3% year-over-year, landing at $21,4-billion, but this solid end to the year was not enough to outweigh weaker sales in earlier quarters, and 2024 ended down 1,1% year-over-year according to the International Data Corporation (IDC) North America Distribution Tracker (NADT).
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% 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,” says Ruth Flynn, research vice-president for 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 five brands all enjoyed double digit year-over-year growth, with HP Inc 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 really stood out with 350% and 218% year-over-year growth respectively.