By Ali Naqvi
Director, Canada Technology
Overall, the Canadian economy had a good year. Economic indicators are pointing in the right direction, and Statistics Canada is reporting low unemployment at 5.7 percent and high GDP growth.
Similar positive momentum is seen within our IT hardware Distributor Track information. In fact, there wasn’t a negative quarter result from Q4 2015 to Q4 2017. Every single quarter during this period has posted positive revenue growth. Q4 2017 showed revenue growth of +7 percent, which closed the year at +8 percent.
In terms of total revenue, Q4 2017 was the largest quarter of the year; this is the third year in a row with this trend. Traditionally the Canadian IT hardware distribution market was used to seeing a bigger Q1 due to government year-end in March of every year, when most of the spending took place in the government sector.
This growth indicates increased investment in upgrading IT infrastructure and businesses spending on new and better technology adoption. Our data shows double-digit growth by national integrators and small and large VARs in Q4 2017.
This growth mainly came many categories that showed significant dollar and percent growth. The highest dollar growth was from notebooks, however, the percent growth is in the single digits, but it accounted for 13 percent of all positive dollar gains. Notebook accessories grew alongside notebooks, with +14 percent revenue growth. It is important to mention that more than half of the revenue in notebook accessories came from docking stations, which are also growing. The more notebooks are used in business, the more docking stations will be required for convenience of recharging and to avoid manually connecting other devices to the notebook if the user has to move to attend meetings in different locations.
The categories that showed double-digit growth were desktop computers, monitors, solid state drives, memory, video cards, all-flash arrays, and workstations. Desktops are improving in performance due to their compact size; as a result, small form factor desktops, which are a little more than half of all desktops sold, grew in revenue by +38 percent.
Solid state drives make up another category that has shown growth over the past couple of years. Their speed, solid form factor, and reliability are some of the features that make them preferable to traditional rotating hard drives. About half of the revenue in SSDs came from enterprise storage/server-type devices.
In summary, it is evident the growth is spread across many categories in the Canadian IT hardware distribution market rather than being concentrated among top categories.
With the strong growth rate in Q4 and previous quarters, it will be interesting to see how Q1 2018 performs, given the increased economic momentum in Canada.