Press "Enter" to skip to content

Value of Deal Flow in the Channel Increases One More Time

The dollar value of the hardware and software moving through the channel continues to increase with no signs of a potential decline anywhere on the immediate horizon.

The NPD Group this week published a first-quarter update to its B2B Distributor and Reseller Tracking Service showing the B2B technology market in the U.S. grew 6% in terms of dollars, with hardware revenue growing 5% and software sales increasing 12% year over year.

Michael Diamond

Despite the rise of the cloud, there continues to be a steady increase in both traditional x86 server and hyperconverged infrastructure (HCI) platform sales, says Michael Diamond, director of industry analysis for B2B Technology at The NPD Group.

“There’s been an upgrade cycle,” says Diamond.


Are you struggling to execute the mechanics of your channel strategy?

If so, check out Channel Mechanics, they offer a complete line of SaaS solutions to manage all aspects of your channel. Demos, NFRS, MDF, Promotions, Partner Leveling… they have over 20 specific solutions to help you get the most out of your partner ecosystem.


Another major growth area for hardware sales was all-Flash arrays (11%) and PCs (13%). In fact, notebook sales were up 6%, which in turn drove higher sales of docking stations (30%), PC headset/PC microphones (28%), and USB hubs (27%). Price increases resulting from product shortages also drove dollar growth in the desktop/server memory (25%), notebook memory (15%), and video cards (8%). PC growth in the months ahead is also likely to continue accelerate as organizations make a long overdue transition to Windows 10.

At the same time, organizations of all sizes appear to be employing more software than ever, which may be fueled by cloud computing platforms that make it simpler to procure and deploy more software than ever, notes Diamond. Notable growth in the software segment included platform-as-a-service (PaaS) deployments (21%) and storage utilities and management (31%).

That expansion of the number of platforms being deployed is also fueling rapid growth in cybersecurity sales flowing through the channel. The NPD Group report finds security software sales increased 13 percent year over year in the first quarter. The two biggest cybersecurity areas of growth were security software include identity & access management (42%) and security information & event management (26%).

While software and security represent major growth opportunities for the channel, the continued growth of hardware sales bodes well for an IT channel that continues to generate more revenue from hardware than software in the so-called age of the cloud. The NPD Report notes hardware represented 73%  of all revenue generated, while software represented 27% of revenue.

It’s too early to say to what impact the shift to the cloud will have on sales of hardware in the data center. Longer term forecasts point to a decline. There are also rising concerns about increasing costs of cybersecurity. But for the short terms at least, the channel appears to be firing on all cylinders.

Be First to Comment

Leave a Reply