Every Wednesday our CONTEXT team of expert analysts share their insights into the latest IT industry trends for channel businesses across Europe and further afield. These CONTEXT IT Industry Forum webinars are your number one resource for the latest market intelligence.

Among our highlights for October 2025 are continued momentum in the PC and cloud markets, and Spain, but a slight slowdown for UK and Italian distributors. Let’s take a look in more detail:

UK distribution performance dips below European average

UK distributors had outperformed their European peers since Q2. But the roles reversed in Week 35. After solid 15.7% year-on-year (YoY) growth in May, monthly revenue growth in the UK slumped to -8.2% YoY in August. It only recovered slightly in September, to 0.8% YoY. The decline is partly down to weak demand during the summer months, and partly due to tough comparisons with 2024. With most of Q3 data now in, it’s clear the SMR channel continued to fare pretty well, growing revenue 10% YoY in the quarter so far. However, the same can’t be said for corporate resellers (-8.6% YoY) and the etailer business channel (-20%) – although the latter only has a small percentage share of total distribution revenue in the UK.

PC momentum continues ahead of Windows 10 EoL

The PC market has continued to perform well over the past few weeks, as the deadline for Windows 10 end of life (EoL) in October nears. All customer segments are now investing in Windows 11 refreshes, with desktop revenues up by more than 35% YoY and notebooks by more than 9% YoY in Q3 (up to Week 39). The commercial segments is responsible for impressive notebook performance, with SMBs starting to invest more, while demand is also improving among consumers. Spain and the UK are leading the region in notebook revenue growth. Desktops are trending much higher than the past two years, although this comes on the back of five years of consistent decline.

Spain still booming amid modest September

September saw subdued YoY revenue sales through distribution in Europe. Sales grew just 1.3% YoY (day adjusted), with Germany (-8.8% YoY) dragging the region down. Italy (-4.8% YoY) also had a poor month, while there were smaller declines for France (-0.5%) and the Nordics (-0.8%). Spain continued to lead the pack (8.2% YoY) in terms of countries in August, although “Rest of Europe”, which includes Czechia, Slovakia, Hungary and the Netherlands (11.6%), came out strongest. The UK recorded 2.2% YoY growth for the month. Across the region, personal systems (17%) and infrastructure (11%) were the strongest performing categories. Software and services (-13% YoY) had a poor month.

Italy experiences unexpected September slowdown

Distributors in Italy had an unusually quiet September, with revenue sales growth slumping -2% YoY during the month. This follows figures of -7% YoY in August, and leaves the year-to-date (YTD) performance in negative territory. The SMR channel, which is the country’s largest, experienced -2% YoY decline in the third quarter, due to market uncertainty, stronger competition, and limited access to credit. Corporate resellers saw revenue sales increase just 2% YoY in the same period, but decline -2% YoY in September. Weak demand and few public sector tenders are fuelling the decline. Consumer sales are faring better overall, although retail chain channel recorded a 5% YoY decline in the third quarter.

IaaS/PaaS revenues accelerate as Microsoft revamps Marketplace

IaaS and PaaS revenue sales growth hit 25% YoY in August, much higher than last year, according to data from France, Germany, Italy, Spain, and the UK. Revenues reached an impressive €99 billion in Q2 alone. SaaS sales grew at a solid 22% YoY in the same month, albeit lower than the figure from August 2024. However, there’s plenty of optimism in the channel about the impact of Microsoft’s latest cloud announcement, which will see it merge its Azure Marketplace and AppSource platforms into a single Microsoft Marketplace. The new store has a new category, offering over 3,000 AI apps and agents, and will significantly enhance solution discoverability and co-sell opportunities for distributors.

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