Every Wednesday, our team of CONTEXT experts shares their analysis of the IT industry trends that matter for channel businesses across Europe and beyond. These CONTEXT IT Industry Forum webinars are your go-to resource for the latest market intelligence.

In our August 2025 highlights, we are pleased to report positive developments in cybersecurity, a robust performance in the first half of 2025 and the start of H2, as well as CONTEXT's strategic expansion into the Mexican market.

Cybersecurity finishes H1 2025 strongly

The first half of 2025 has demonstrated strong performance in the cybersecurity sector, with year-over-year (YoY) revenue growth of 13%. Most countries experienced positive growth during this period, with noteworthy increases in Italy (23%), Germany (14%), and Spain (26%). A typical trend of closing deals, renewals, and new licenses at the conclusion or beginning of quarters was evident, with the end of Q2 demonstrating even stronger results than the previous year. An exception to this trend was the UK, which faced a decline of -11% YoY growth for the first half of the year, primarily due to challenging comparisons with the previous year's performance.

All five key segments of the cybersecurity industry—network security, endpoint protection, cloud security, identity and access management, and data security—have experienced positive YoY growth thus far (YTD). This growth can be attributed to a dynamic threat landscape and the increasing complexity of regulatory requirements. Notably, network security has emerged as the leading segment, achieving a remarkable YTD revenue growth of 21% YoY.

Impressive start to Q3 with 7.7% growth in July

In July, European distribution maintained a trend of positive revenue sales growth, achieving a 7.7% YoY increase, closely matching the 8% growth seen in July 2024. However, indications suggest that a slowdown may be on the horizon for August. The growth was notably propelled by a remarkable 17% YoY increase in software and services, which was boosted by an astonishing 56% YoY growth in virtualisation. Additionally, the personal systems segment recorded a solid 12% YoY growth, largely attributed to the upgrades associated with Windows 11. The infrastructure segment saw a modest 2% growth, supported by a significant 23% YoY growth in internal solid-state drives (SSDs) during the month. At the country level, standout performers included Poland (9%), France (16%), Spain (18%), and the Nordic countries (21%), all of which contributed positively to the overall growth in July.

Q2 sales beat predictions as 2025 forecast revised up

In the second quarter of the year, revenue sales through European distribution exceeded expectations, achieving an annual growth rate of 5.2%. This performance surpasses our initial forecast of 3.5% YoY, including the telecom sector. Notably, the infrastructure segment was a significant contributor to this growth, experiencing an impressive 11% YoY, compared to the forecasted 3%. This surge was driven primarily by demand for AI servers and a major deal in the UK.

Additionally, personal systems demonstrated strong performance with a 10% YoY growth rate, largely attributed to the upgrades to Windows 11. However, the peripherals category experienced a decline, reporting a 2% YoY decrease.

As a result of these trends, we have revised our sales forecast for the year from 4.4% to 5.3% YoY growth. We anticipate a solid performance in Q3 (5.3%) and Q4 (5.6%), largely influenced by the end of support for Windows 10. Nonetheless, we project that this growth will stabilise somewhat by 2026, with anticipated rates of 3.9% in the first quarter and 1.2% in the second quarter.

CONTEXT expands coverage to Mexico

CONTEXT is pleased to announce the addition of Mexico to its expanding portfolio of markets beyond the EU. As the second-largest IT market in Latin America, trailing only Brazil, Mexico is experiencing consistent growth across hardware, software, and cloud services. The country boasts a thriving startup ecosystem, particularly in sectors such as fintech, e-commerce, and AI, with nine unicorns currently established.

Furthermore, Mexico's free trade agreement with the United States positions it as a strategic gateway to North America, offering significant advantages for distributors and vendors looking to establish a presence in the region.

On a global scale, Mexico ranks as the third-largest exporter of ICT goods and services, solidifying its role as a key manufacturing and logistics hub for technology products. CONTEXT anticipates providing further insights into the local industry in the near future.

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