April was another interesting month in the European IT channel. And once again, CONTEXT was on hand every week to run through the key trends for our industry partners. This past month, of note were new Q1 2024 figures for the cybersecurity and UPS categories, and the Nordics, as well as a fresh look at the astonishing AI–powered growth of tech stocks.

Here are some of those highlights in more detail:

The tech stock market powers on:

At the beginning of April we took a look at the performance of tech stocks on some of the world’s biggest bourses. The past six months have witnessed astonishing growth, driven by rising expectations about AI. To put it in perspective, we recorded 228% growth between September 2019 and October 2023 in the Semiconductor industry. Since then there has been a surge in the value of semiconductor stocks, which are now valued at 457% of their September 2019 value. AMD at 470% and NVIDIA at 1869% are the key contributors to this change. The same phenomenon can be seen in Personal Systems stocks which have all grown significantly in the last 6 months led by Dell Technologies: and Infrastructure led by VMWare, Vertiv, Fortinet and Palo Alto (to name a few).

UK & Ireland grows strongly in cyber as MSPs soar:

It’s been a tough few weeks for UK & Ireland distributors, but in cybersecurity there was better news in April. Our analysis of Q1 2024 found that although the cybersecurity market as a whole declined –5.9% year–on–year (YoY) in revenue sales, in the UK it surged by around 5% YoY.  France (11% YoY) appeared to do even better. Much of this growth has been driven by the success of managed service providers (MSPs) which saw a 10.6% YoY increase in revenue – rising even higher in the UK (30%) and Italy (18%). MSPs are increasingly important part of the cybersecurity market, helping SMBs to enhance their cyber–resilience amidst major industry skills shortages.

Software the lone bright spot for the Nordics:

In Scandinavia, interest rates remain high even though inflation is coming down quite nicely in most countries. This is feeding into private sector project delays and a corresponding hit to the corporate reseller channel. As per Europe as a whole, it is software and services that’s driving growth. In fact, the category grew revenue 9% YoY in Q1 2024, versus 0% in Europe. Stripping out services, software alone grew by more like 15% during the period. Altogether, the Nordics region posted YoY revenue growth of –5.2% in Q1 2024, which is a bit lower than hoped given favourable comparatives a year ago.

UK, France and Germany drag down UPS revenues

It was a mixed quarter to start the year for the UPS category, which saw YoY revenue growth decline 8%. That’s mainly due to poor performance in Germany, the UK and France, despite positive growth in Poland and the rest of Europe, led by the Netherlands. France saw a significant upsurge in growth at around Week 15 due to a major deal in the corporate reseller channel, equivalent to six or seven times normal weekly throughput there. Retail activity in Germany has been strong in recent weeks, which bodes well for the category given the size of this channel.

Part of the value clients get from the CONTEXT database is its ability to pick out trends in a highly granular manner. Thus, we can look at the data at a specification level, to see that the capacity band performing best in Q1 was 5,000–10,000 kVA. And by product line – which is the safest and most expensive form of UPS – we can see that online performed better than line interactive and offline.

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