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Demand for servers, networking and storage drives European distributor revenue up - Context

Revenue growth for European IT distributors in 2022 is forecast to stand at 3.7 per cent against the previous year, excluding telecoms, according to IT market researcher Context.The figures represent an increase on the 3.2 per cent year on year growth predicted at the start of 2021. Context claims the data is "even more significant" coming on the back of two years of high growth during the pandemic, and a gloomy IMF GDP forecast which recently downgraded global growth from 4.4 per cent to 3.2 per cent for 2022.Excluding telecoms, Context predicts 5.8 per cent growth in Q4 2022, followed by a softening in successive quarters brought about by recession and reduced backlogs. The analyst firm explained its forecast is based on strengthening infrastructure and software and services, driven by business demand across servers, networking and storage. The supply chain issues that impacted network and server components in particular eased in Q3, although there are still long lead times for some networking products. "Hybrid working trends will continue to fuel demand for hardware, while growth will also come from IT infrastructure, and government investment in health and education, supported by the NextGenerationEU Covid relief fund", said Context global managing director, Adam Simon."On the flip side, consumer demand has softened thanks to the surging cost of living, economic uncertainty and the spectre of recession - and will continue to do so into 2023."Context predictions sector-by-sectorContext split its fourth quarter 2022 predictions into various sectors.It claims PC demand will remain muted due to slumping consumer confidence, with inflation pushing prices up. It added businesses will also remain cautious, with demand for PCs likely to be pushed out, and no major government-backed education projects on the horizon.Enterprise infrastructure is on a roll. Datacentres will see the greatest distribution growth of any sector over the next few months, and there'll be major opportunities in security software and services. Infrastructure software will continue to provide a solid revenue stream for distributors with the skills and focus to take advantage.Enterprise storage and server sales will perform well thanks to a reduction of server backlogs/improved component availability, and continued strong business demand for storage - despite the loss of the large Russian market.Enterprise networking sales will benefit significantly from a loosening of supply chain constraints, especially in the enterprise switching space. Hybrid working and digital transformation will also drive demand, although falling prices, depressed revenues and demanding YoY comparisons may limit growth.

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Author: Rees)

Publish Date: 17/11/2022 11:49

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