Year-over-year software revenue growth doubled hardware growth
PORT WASHINGTON, N.Y., Feb. 8, 2023 /PRNewswire-PRWeb/ -- According to The NPD Group, sales revenue growth continued in the U.S. B2B technology reseller channel in 2022, rising 10%, year over year, following 12% growth in 2021. As a comparison, consumer technology sales in the retail channel declined 8% in 2022, after 9% growth in 2021. While both hardware and software sales experienced strong gains, NPD's Reseller Tracking Service data, which tracks sales from the top national solution providers and B2B e-commerce sites, reveals software revenue growth doubled that of hardware, up 14% and 7%, respectively.
In 2022, hardware sales made up 63% of channel revenue, down from 65% the previous year, as software and cloud services gained share. In fact, the top two categories based on revenue gains year over year were security software and business applications software. Despite cooling sales in hardware categories, such as USB cameras and PC headsets and microphones, which saw strong demand during the pandemic, monitors had the third-largest revenue increase in 2022.
According to NPD's Vertical Reseller Tracking data, the manufacturing sector had the largest year-over-year revenue gain in 2022, adding nearly $800 million in sales. Last year's growth leader – the educational services sector – struggled to maintain momentum in 2022, resulting in a 3% decline, year over year.
"2022 was a year of strong revenue growth for the channel but we started to see some softening in the last quarter. In 2023, we expect overall B2B budgets will be lower, resulting in a 2% revenue decline year over year, despite growth in software and cloud services revenue," said Mike Crosby, executive director and B2B technology industry analyst for NPD. "IT hardware categories will be most impacted in the near-term, but a change in momentum is anticipated for 2024 and 2025 driven by device upgrade and refresh cycles. The channel will also return to growth in 2024, with sales expected to increase by 6%, followed by an additional 7% rise in 2025."
About The NPD Group
NPD is a global market information company offering data, industry expertise, and prescriptive analytics to help our clients understand today's retail landscape and prepare for the future. Over 2,000 companies worldwide rely on us to help them measure, predict, and improve performance across all channels, including brick-and-mortar, e-commerce, and B2B. We have services in 21 countries worldwide, with operations spanning the Americas, Europe, and APAC. Practice areas include apparel, appliances, automotive, beauty, books, B2B technology, consumer technology, e-commerce, fashion accessories, food consumption, foodservice, footwear, home, home improvement, juvenile products, media entertainment, mobile, office supplies, retail, sports, toys, and video games. For more information, visit npd.com. Follow us on Twitter: @npdgroup.
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SOURCE The NPD Group
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