The month of March in Canada marks the fiscal year-end for the government. Though the purchasing cycle by the government has been more stabilized there still exists that end-of-the-year buying rush that keeps distributors and commercial resellers busy during this period. March, as it happens, also marks the end of calendar first quarter and after the holiday rush is considered by some to be the back-to-business season, hence the importance of this quarter.
During the past six quarters we have seen quarter after quarter of positive growth in the Canadian IT hardware distribution market. Q1 2017 results compared to last year’s Q1 showed a positive revenue growth of +6 percent, which is a significant number considering Q1 2016 also ended with +8 percent growth over the previous year’s first quarter. Among the three months making up this quarter, March was the best-performing month with +11 percent growth over last year. This was followed by February with +8 percent growth, but Jan’17 experienced some declines in the low single digits.
Small and large VARs account for two-thirds of IT hardware distributor revenue, and both showed positive growth.
Notebooks, networking devices, solid state drives, storage area networks, notebook accessories, and hyperconverged systems led the growth in this quarter, contributing 70 percent of positive dollar gains.
Hyperconverged systems is a newer category released by The NPD Group. The revenue of this category has been growing every month, indicating the increasing adoption of these systems in commercial technology.
When we are trying to explain product growth trends, convenience is often the reason which can explain some of these trends. Revenue growth of docking stations last quarter is one of those trends that can be attributed to convenience. Work stations are usually equipped with multiple monitors, headphones, full size keyboards, Ethernet cable, and power cords. All of these devices need to be connected with the laptop, and docking stations make these connections smooth by just resting the notebook on it. The revenue and units of docking stations in March doubled compared to February, and for the quarter their sales grew by +30 percent over the same period last year.
Accretion of sit/stand workstations is another trend seen in corporate offices as users become more health conscious. Sitting all day is not good in the long term; these sit/stand monitor arms and stands allow users to raise their monitors/desks so they can stand while continuing to work. Many of these products are instrumental in the +23 percent revenue growth of the monitor stands/arms category in Q1 2017.
Some categories still present a challenge that the market needs to overcome. So far it has done a great job of keeping the numbers positive while we wait to see the picture next quarter’s results present.