European IT distributors see resilience as software & AI grow
The European IT distribution market held steady during Q2 2025, demonstrating resilience despite a challenging economic and geopolitical environment, according to new analysis from CONTEXT.
CONTEXT's SalesWatch Distribution Report, in conjunction with data from the Global Technology Distribution Council, indicated a mixed performance across European regions. The quarter was characterised by robust software and desktop hardware sales, yet marked by declining networking activity and persistent tariff uncertainties.
Regional variations
Week 19 of the second quarter saw distributor revenues at EUR €1.47 billion. This was described as one of the year's quieter periods, with 14 out of 19 countries falling below the performance index. Despite this, week 19 saw a 23% increase in revenues compared to the same period in 2024.
Large markets such as Germany, the UK, Italy, and Spain reported results beneath expectations. By contrast, France recorded steady performance, while both Poland and the Nordic region continued to exceed 2023 and 2024 benchmarks.
Growth drivers and sector performance
The data highlighted virtualisation and security software as significant growth drivers, both performing well above the average index. Approaching end-of-life support for Windows 10 further propelled strong desktop sales. Demand for graphics cards and processors, especially for gaming purposes, also bolstered hardware revenue.
Conversely, the networking equipment segment experienced a notable year-on-year drop, with data centre networking security highlighted as an area of ongoing concern.
"The market is showing remarkable resilience in a complex macro environment. Ongoing geopolitical pressures, particularly related to US-EU tariffs and currency shifts, are clearly creating volatility. However, across Europe, the sustained growth in software and AI-aligned hardware categories points to a broader modernisation trend in enterprise IT," said Anthony Frot, Research Director at CONTEXT.
Country-level insights
Poland's performance stood out in Q2, moving from 5.9% year-on-year growth in Q1 to an increase of 16.5% in April. The Nordic region also sustained its position among the continent's strongest performing areas. Spain and Italy, despite fluctuating week-to-week results, remained within the top five countries in terms of overall performance.
CONTEXT's intelligence reported that distributors continue to be affected by global trade volatility. Fluctuations in the US dollar, the potential for increased tariffs on European metals, and administrative changes to US trade policy have caused immediate impacts on product logistics and pricing strategies.
Forecast and outlook
The ongoing transition away from Windows 10 and growing interest in AI-capable personal computers are expected to underpin strong desktop and mobile device growth through the end of 2025.
Projections for the full year suggest an 11.8% increase in desktop unit sales and an 11.7% rise in desktop revenue. The market for mobile PCs, encompassing notebooks and tablets, is forecast to expand by 6.2% in units and 8% in revenue compared to the previous year.
Despite these positive trends, caution persists around the networking sector and the tablet subcategory. Anthony Frot, Research Director at CONTEXT, remarked:
"However, overall revenue expansion may be tempered by sluggish enterprise networking performance, forecast to grow just 0.6%, and by a difficult year-on-year comparison in Q2 for tablets. On a more positive note, investments in AI infrastructure are driving upgrades in datacentre networking, offering a bright spot in the broader enterprise IT landscape."
The report reflects a European IT distribution sector that is adapting to both short-term volatility from external economic pressures and longer-term transformation as organisations invest in new infrastructure and endpoint devices.
