Smaller businesses remain cautious in their IT spending, and are focusing on the essentials, according to NPD Group
Technology spending through US distributors and resellers continues to remain flat, as small and medium-sized businesses try to negotiate the rapidly changing technology scene and the difficult macroeconomic climate, according to market research firm NPD Group.
In numbers released on 28 January, NPD Group analysts said that sales through the US channel in 2012 were flat for the third consecutive year, at about $58.5 billion (£37bn), and that almost three-quarters of commercial revenues came from the top five revenue segments – computers and servers, consumables (such as ink and toner), networking equipment, software and storage.
Networking and storage growth
Of those categories, only networking and storage technology saw increases, the analyst firm said in its Distributor Track and Reseller Tracking Services report.
The relative stagnation in channel revenues – and the growth in the networking and storage categories – indicate that while small and medium-sized businesses (SMBs) and even enterprises are dealing with a roiling and uncertain global economic environment, they also know that they have to invest in some technology if they are going to keep up with customer demands and their competitors, Stephen Baker, vice president of industry analysis at NPD, told eWEEK.
However, SMBs in particular are loath to spend money if they are unsure of a return on that investment, particularly given the trends that are roiling the industry, from mobile computing, to the cloud, to bring your own device (BYOD).
“Smaller companies can’t afford to make a mistake,” Baker said. “Bigger companies can. They can make bets. Smaller companies can’t make those kinds of bets.”
Smaller businesses are being cautious about what they spend money on, focusing on products that are essential to enabling them to compete and to improve their IT infrastructures and capabilities, he said.
For SMBs, it’s about stable, standards-based solutions. What they’re wary of – particularly as trends like BYOD and cloud computing continue to fuel new technology innovation – is spending a lot of money on something now, only to find it’s obsolete in a year or doesn’t offer the intended benefits or return on the investment, Baker said.
“Things are changing,” he said.
Overall, there was little deviation in the percentage of sales coming through the specific channels, according to NPD’s numbers. Revenues through distributors accounted for 62 percent, growing less than 1 percent in 2012 from the previous year.
Sales via resellers accounted for the other 38 percent, a drop of just more than 1 percent. In other numbers, total sales of PCs dropped 7 percent in 2012, though average prices rose almost $35, to $764.
Desktop PC sales grew 4 percent, and volumes of Windows PCs rose 5.2 percent. Notebook revenues fell 13 percent – while Windows notebook sales fell 16 percent and Macs soared 15 percent.
Windows 8 accounted for 18 percent of notebooks sales through the channel and 5 percent of desktops revenues. Helping the hike in storage equipment sales was a growth in solid-state-drive (SSD) revenues of more than 50 percent and storage systems, including network-attached storage, which saw sales increase 13.5 percent.
“Steady demand for technology products through commercial and distribution sales channels is likely to continue in 2013,” Baker said in a statement released with the report. “While significant overall sales growth does not seem to be on the horizon, the pockets of strong business demand, such as storage and networking, continue to offset the overall sluggishness in the marketplace.”
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