US B2B Technology Software Sales Revenue Grew 6% in Q1 2023
According to Circana, formerly IRI and The NPD Group, sales revenue in the U.S. B2B technology reseller channel fell 9% year over year in the first quarter (Q1) of 2023. Software sales revenue increased 6%, sluggish hardware sales, specifically devices, drove the majority of the decline. Sales for the quarter remained 10% above Q1 2019.
“Sales cycles for technology products were pulled forward during the pandemic and, as a result, spending in the B2B tech channel is shifting to other needs,” said Mike Crosby, executive director and B2B technology industry analyst for Circana. “While reseller channel sales are likely to improve in the second half of this year, we expect the timing of device refresh cycles, coupled with technology needs related to the sunsetting of Windows 10, to be key growth drivers in both 2024 and in 2025.”
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“Sales cycles for technology products were pulled forward during the pandemic and, as a result, spending in the B2B tech channel is shifting to other needs,” said Mike Crosby, executive director and B2B technology industry analyst for Circana.
Despite challenges on the hardware side, Circana’s Reseller Tracking Service data, which reports sales information from the top national solution providers and B2B e-commerce sites, shows nearly every commercial software category experienced sales revenue growth year over year in Q1. Security information and event management (SIEM) and data protection and recovery software saw the largest gains, each increasing 17%. Cloud platform services also continued to grow, with sales revenue gains of 21% this quarter.
“Companies are downshifting their IT spend and delaying major device refreshes until economic conditions begin to normalize,” noted Crosby. “While hardware purchases are under greater scrutiny, investments in commercial software and cloud platform services are gaining momentum as they are instrumental in keeping businesses safe and connected.”
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