First Half Results Positive for U.S. Tech Indirect Market

According to The NPD Group’s B2B Distributor and Reseller Tracking Service, the U.S. B2B technology market saw 4 percent dollar growth during the first half of 2019 compared to first half 2018, with sales reaching nearly $45 billion. During this timeframe, software sales experienced 8 percent growth, now making up 26 percent of industry sales, while hardware dollar sales saw a 3 percent increase.

In software, the importance of security is continuing to drive sales gains in the first half of 2019 with increases in several software categories inclduing security information & event management (+30 percent), identity & access management (+20 percent), and gateway & firewall (+15 percent). In non-security software, cloud infrastructure and platform-as-a-service saw the most notable growth up 37 percent, as firms leverage the cloud for office productivity and back-up and recovery – a trend expected to continue.

In hardware, IT systems, which include PCs, storage, and servers, grew 7 percent fueled in part by the education buying season and a strong Windows 10 refresh cycle. The PC market saw growth with year-over-year dollar sales gains in notebooks and tablets. In storage, hyper-converged systems and all-flash array unit sales grew 35 percent and 60 percent respectively during the period. This was a result of declining average selling prices propelling volume, which is expected to continue as these segments are key to hybrid cloud strategies.


“While software is maintaining impressive growth in the channel, we expect hardware sales to remain healthy as a result of digital transformation and expanding networks,” said Michael Diamond, director, industry analysis, B2B Technology for The NPD Group. “As companies seek to digitally transform themselves to drive internal productivity improvements coupled with enhanced customer centricity, the partner community must continue to transform itself into more consultative models with deep vertical and departmental expertise.”