Distributors Tech Data Canada, Ingram Micro Canada, and D&H Canada reflect on what has been a very strong year in the PC market in this country.
Greg Myers, senior vice president of sales and marketing at Tech Data Canada.
Canadian distributors agree that, to borrow from Mark Twain, rumours of the PC’s demise have been greatly exaggerated. In fact, this year the PC has not only shown it is not on its last legs, but it has powered the market when it comes to hardware sales in this country.
Greg Myers, senior vice president of sales and marketing at Tech Data Canada, offered the latest and most compelling evidence, kicking off the distributor’s fall TechSelect Partner Conference in Las Vegas by showing members of the Canadian reseller group the latest data on the matter, the latest numbers from NPD.
NPD tracks the sales of technology hardware through distribution in Canada, and the numbers it presents paint a very strong picture. Year to date, notebooks are up nine per cent, including 18 per cent year-over-year growth in the third quarter. Desktops, meanwhile, are up seven per cent Q3 over Q3, and a whopping 20 per cent year-to-date.
“There’s no question it’s been the year of the PC,” Myers told attendees. “It’s been going gangbusters for going on seven quarters now.”
The strong endpoint numbers contrast to an overall IT hardware spend (through distribution) in Canada that is up a paltry one percentage point year-to-date.
Ingram Micro Canada general manager Mark Snider
Although he did not have the then yet-to-be-completed September numbers when he presented to Canadian VentureTech Network and SMB Alliance members at last month’s One Ingram Micro fall event (also in Las Vegas), Ingram Micro Canada general manager Mark Snider told much the same tale. Snider noted that desktop and notebooks have “outperformed” a generally fairly flat market throughout 2014.
“It’s been a strong year of recovery” in the Canadian PC market, Snider told ChannelBuzz.ca at the time. “Notebooks were predicted to be strong, but the strength we’ve see in desktops is more surprising across the industry.”
Meanwhile, D&H is seeing its laptop business up triple digits across North America, co-president Michael Schwab told ChannelBuzz.ca, while D&H Canada general manager Greg Tobin also notes “huge” growth in the desktop market, up 55 per cent year-over-year in August of this year. D&H, with its focus on SMB and retail, sees that growth continuing “right through the holiday season” on the consumer side, Tobin said.
While all three distributors will note that the Windows XP end-of-life earlier this year has played a major role in endpoint computing being prioritized this year, there’s more to it than that.
D&H Canada chief Greg Tobin
“There’s been some deferment of budgets, and everything got pushed out for a long time. Now with new chipsets, new platforms, new form factors, and the value prices we’re seeing right now, everything is coming together,” Tobin said. “It’s just a good time right now.”
However, for every ying, there is a yang. For every up, there is a down. And as Myers points out, in an environment largely comprised of SMB customers with finite IT budgets, prioritizing endpoint spend has meant that something has to give somewhere else. And where that give has been occurring has been on the server side, which is down some 17 per cent through September year-to-date. And that number was actually considerably sweetened by a server recovery last month – in September the server market was up 23 per cent year over year, but that doesn’t staunch the pain of a 35 per cent decline year-over-year in the first half of the year.
“It’s been a very difficult category for the channel in Canada over the last five quarters,” Myers said.
As well as suffering due to the prioritization of overdue endpoint device spending, Snider suggested that many server decisions have been put on the backburners while clients more fully consider which workloads that have traditionally gone into the data centre can or cannot be moved to various forms of the cloud.
“[The server marked has] had some tough months” this year, he said.
Michael Schwab, co-president of D&H
But the September rebound bodes well for the server market going forward, and the distributors see reasons for optimism through the end of the year beyond that. Like the PC market renaissance throughout this year, the looming end-of-support for the venerable Windows Server 2003 platform stands to be a big factor in the comeback of the server market in Canada.
“Microsoft hasn’t lit the fire on that message yet, but it’s coming,” Schwab predicted. “It’s not coming fast and furious yet, but it’s coming.”
While endpoints have ruled the day thus far this year, at the expense of servers and networking equipment, Myers said strength in the latter half of August and into September bode well for 2014 ending on a high note as far as hardware sales are concerned.
“We still have three more month of market yet to deliver, and seasonally, we see a significant lift in our business, which is really an aggregate of your businesses,” Myers told attendees Wednesday.
