US B2B Channel sales reach nearly $62 Billion in 2013, According to The NPD Group

6 percent growth marks fastest increase since the end of the recession

PORT WASHINGTON, NEW YORK FEBRUARY 4, 2014 – For the third consecutive year, US B2B channel sales (sales through distributors and commercial resellers) increased, ending 2013 up nearly 6 percent at $61.7 billion. The impressive growth was the fastest sales increase since the end of the recession. Sales growth accelerated in the second half of the year peaking in fourth quarter with a 6.9 percent increase over the fourth quarter of 2012.

“B2B channel sales rebounded in 2013 after a weaker 2012 where we saw less than 1 percent growth,” said Stephen Baker, vice president, industry analysis, NPD. “The belief that IT hardware is a declining business was dispelled as most of the significant hardware segments had positive sales results. The increasing demands for cloud and infrastructure services continue to positively impact distribution channels and should create increased hardware and software sales opportunities in the future.”

The top five categories accounted for 74 percent of sales; essentially unchanged over the last four years. Four of the five categories grew by more than 6 percent and every one of those improved sequentially over 2012’s growth rate. Outside of the largest product categories sales revenue was up 5.2 percent, a significant jump over 2012.

Top 5 US B2B Categories Based on Revenue

  2010 2011 2012 2013
Computers & Servers $11.5b $12.3b $12.1b $13.1b
Networking & Communication $7.7b $7.8b $8.2 $8.7b
Software $8.6b $8.3b $8.1b $8.7b
Consumables $8.6b $8.6b $8.5b $8.3b
Storage Hardware $5.2b $5.5b $6.0b $6.8b
All Other $14.9b $15.4b $15.4b $16.2b
Industry Total $56.6b $57.9b $58.3b $61.7b

Source: The NPD Group/Distributor Track and Reseller Tracking Service

Pre-configured desktop and notebook unit sales increased 9 percent and 23 percent respectively while Build-to-Order computers increased19 percent to nearly 3 million units. Hewlett-Packard unit sales were flat on a year-over-year basis, Lenovo saw unit volumes jump 15 percent and the rest of the market, propelled by strong Chromebooks sales, had an almost 50 percent increase in unit sales. Server sales declined 9 percent in units and fell below $1 billion in annual revenue for the first time in more than four years.

Networking and communication devices continued to have steady revenue growth. Cisco was the largest supplier of networking gear to the channel capturing 57 percent revenue share. Among the top 10 networking manufacturers Brocade and Juniper topped the list of fastest growing suppliers with revenue growth greater than 20 percent in 2013. Switches remain the largest category accounting for 31 percent of revenue, but units have been flat over the last four years while dollars increased nearly 7 percent in 2013 to $2.7 billion. Access points were the fastest growing major category with revenue up more than 21 percent and units increasing 18 percent from 2012.

Software sales rebounded after three years of decline. Business software increased 14 percent to more than $4.7 billion while operating system sales grew by 11 percent. Security software grew just 2 percent and imaging software declined 13 percent. Microsoft, IBM and VMWare were the three largest software vendors in the channel accounting for 60 percent of revenue. Microsoft sales were up 12 percent, IBM’s sales grew 34 percent and VMWare increased 4 percent over 2012.

Storage hardware sales have been the fastest growing large segment in B2B channel sales since 2010 increasing 29 percent since then with a 12 percent increase in revenue in 2013. EMC, HP, NetApp, IBM and Seagate were the five largest vendors with EMC and NetApp each seeing double digit revenue growth. Sales were propelled by strong growth in solid state drives (SSD) and network attached storage (NAS). SSD revenue increased 83 percent while units soared 95 percent. NAS revenue was up 33 percent over 2012. Hard drives were the largest segment, with more than $2.5 billion in sales in 2013 and 14.9 million units sold.

“The outlook for 2014 appears strong for B2B sales channels,” said Baker. “Strong channel commitments from the major hardware OEMs combined with continued end-user demand for the latest hardware solutions should provide the B2B channels with growth similar to 2013 in the coming year.”

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