AI driving shifts in distribution market, IDC reports

Report finds distributor revenue in second quarter of 2024 remained flat year-over-year at $19.5bn

IDC has released its latest North America Distribution Tracker (NADT) report, revealing significant shifts in the technology distribution landscape driven by the growing influence of AI.

According to the report, distributor revenue in the second quarter of 2024 remained flat year-over-year at $19.5bn. However, this stability masks notable changes within different product segments.

The PC sector has reclaimed its position as the top-selling product group, generating $3.9bn in sales with a robust 9.9 per cent year-over-year growth.

AI-powered PCs played a crucial role, accounting for 17.8 per cent of Q2 PC revenues and showing a 33 per cent growth compared to the first quarter.

Apple and Microsoft have seen particularly strong adoption of AI PCs, with these models comprising 75 per cent and 32 per cent of their PC revenues, respectively.

Software sales also saw significant growth, reaching $3.9bn, a 9.6 per cent increase year-over-year.

Software-defined storage controller software led the charge with a 31 per cent year-over-year growth, driven by AI support and hyperconverged infrastructure products.

Network security software also experienced substantial growth, up 30 per cent year-over-year.

While personal computing and software segments thrived, network infrastructure sales saw a double-digit decline from the record highs of 2023, attributed to the clearing of previous backlogs.

Ruth Flynn, research VP of data & analytics at IDC, noted: "Market transitions to AI-centric processes will place less emphasis on network infrastructure build-out and more on developing endpoint, software, and storage cornerstones with associated growth also expected in support frameworks and services."

The report also highlights a 3.7 per cent year-over-year growth in enterprise infrastructure, driven by increased demand for processing-centric workloads to accommodate AI platforms.

This trend is expected to continue as infrastructure transitions to support AI-heavy workloads.

This report underscores the transformative impact of AI on the technology distribution landscape, reshaping demand across various product segments and setting the stage for future market dynamics.