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We delivered strong leverage in 2018. Full-year earnings per share grew 50% faster than sales. We're executing well, and as I often do in our year-end calls, I'd like to discuss our longer-term strategy. You have seen IoT allow Arrow to bring cross-enterprise solutions together to serve our customers.

Now the rise of edge computing is just as important. Companies are changing how they do business and how they run operations. Bridging the gap between IT systems and operational technology systems is totally the key. Arrow is helping customers tackle this complex challenge.

Manufacturing plants and industrial machines have been digitized to increase efficiency. These systems use sensors, logic controllers, communication gateways and human machine interfaces. Collectively, these are operations technology or OT. Unlike when IT systems go down, OT failures can be catastrophic.

We see this difference as the biggest gap in IT and OT. OT systems, they are islands of control and often do not interact with other parts of the organization. Edge computing allows organizations to benefit immensely by integrating the two worlds, companies need to address security, business analytics, services and artificial intelligence, holistically, and not as silos of IT and OT. This will bring greater flexibility and efficiency.

More importantly, IT and OT convergence enables real-time decision-making. This will dramatically change the way enterprises operate and the use of data for business management. Bridging IT and OT is transformative for any business. Arrow has been helping customers by leading the transformation programs that use technologies and solutions across both IT and OT.

In fact, we're one of the few companies with expertise in both areas. In the next few years, we'll see more devices deployed at the edge, more connected IT and OT systems coming together to benefit business, governments and consumers, and we're excited to help drive that transformation. Turning back to the present. Arrow engineers from around the globe pick some of the best solution that they have developed in 2018.

Some of the products we recently displayed at the CES included our connected water quality monitoring and predictive maintenance solution, utilizing smart, connected water dispensers. As part of the solution, we also designed a web-based software dashboard that both the company and its customers will you use to monitor quality in real time. We worked with one of the biggest commercial water distribution companies on this solution. This company has millions of dispensers deployed around the world.

The potential returns from offering better customer service, while doing it more efficiently, are huge. Speaking of bringing the IT-OT gap, we help design a wireless connected warehouse and distribution center inventory solution. This solution also consists of both hardware and software. Workers wear truly hands-free devices, utilizing voice control enabled by speech recognition software.

With no handheld scanner or tablet, this solution can significantly reduce accidents, improve safety, all while delivering the benefits of better inventory data. Another solution we displayed was an AI-based virtual analytics tool with custom application in food service, retail and healthcare. The interface is intuitive enough that a beverage company, with minimal technology infrastructure, could use the tool to track inventory levels and consumption patterns and reduce its carbon footprint by optimizing inventory movement. We're helping customers make great products.

Yes, in our countless conversation with entrepreneurs, their No. 1 problem is not coding or prototyping, it's production. Not to mention, obsolescence planning, various environmental and conflict mineral compliance and secure assets disposal, and the good news is that our supply chain services expert have developed a plug-and-play model that connects their businesses into today's complex global manufacturing stack. And it manages it, so they can focus on their technology breakthroughs.

Looking at near-term market conditions. Leading indicators remain unchanged. Design activity grew year over year. The strongest region for design activity growth was in Asia.

This is notable given reports of a slowdown in the region. We would normally see a decline in design activity heading into a prolonged downturn. Backlog remains up year over year. Lead times were stable across the portfolio and mostly unchanged from last quarter.

Cancellation rates remained within typical ranges. Book to bill was 0.95 for the fourth quarter. Book to bill was at parity in the Americans and Europe and below parity in Asia ending 2018. However, Asia activity and orders improved in the recent weeks.

In fact, book to bill for the month of January, stubbed up like it normally does. January book to bill looks like prior year, and this includes Asia. We are, again, guiding for year-over-year growth in the first quarter. We have over 200,000 customers.

No one customer is accounting for more than 2% of our sales. While we're not immune to economic conditions, we believe our geographically diverse customer base, with no significant industry concentration, helps inflate our performance. In closing, at Arrow, we're committed to doing things the right way for customers and our suppliers. We're honored to be named top of category in this year's Fortune Most Admired Companies for the sixth consecutive year.

Our employees constantly tell us how proud they are to see the solutions they worked on and customers they've helped make a real difference in people's lives. That's because we believe the power of innovation is to make life better, which happens to be great for business, and you can see that in our results. I look forward to updating you on our performance and our progress in the coming quarters. I'll now hand the call over to Chris to provide more details on our fourth-quarter results and our expectations for the first quarter.

Chris Stansbury -- Senior Vice President and Chief Financial Officer

Thanks, Mike. Fourth-quarter sales of $7.92 billion were above the midpoint of our prior-guidance range. Sales increased 5% year over year and 7% adjusted for changes in foreign currencies. Approximately $43 million or one percentage point of the unfavorable change in foreign currency was not factored into our prior guidance.

The actual exchange rate for the quarter was $1.14 to EUR 1 below the $1.16 rate we previously used for our forecast. Fourth-quarter global components sales of $5.26 billion increased 6% year over year and increased 7% year over year, adjusted for acquisitions and changes in foreign currencies. Sales were at the midpoint of our prior expectation. We had record fourth-quarter sales in all three regions.

In Europe, sales increased 13% year over year adjusted for changes in foreign currencies and increased 9% as reported. Europe sales have increased year over year for 23 straight quarters, adjusted for acquisitions and changes in foreign currency. We continued to gain share in the marketplace. In the Americas, sales increased 5% year over year and increased 4% adjusted for acquisitions.

Growth was driven by strong demand from industrial and aerospace and defense customers. Asia once again produced good growth this quarter. Asia sales increased 7% year over year. And clearly, there has been a deceleration in the region, but we continue to experience growing demand for manufacturing customers.

Global components operating income increased 17% year over year and increased more than two and a half times faster than sales growth. Operating margin increased 50 basis points year over year to 5%, an increase in all three regions. It's worth noting that full-year 2018 global components operating margin was exactly 5%. Enterprise computing solutions sales of $2.66 billion increased 6% year over year adjusted for changes in foreign currencies, a divestiture of the unified communications business in the Americas and both a small acquisition and a small divesture in Europe.

Sales increased 2% year over year as reported, and we're above the midpoint of our prior expectation. Billings increased at a low-double digit rate year over year adjusted for changes in foreign currencies and grew in both regions. Growth was driven by infrastructure, software, security, storage and industry standard servers. Enterprise computing solutions, Americas sales growth remain strong.

Sales in the Americas increased 9% year over year as adjusted and 4% as reported. Europe sales were flat as adjusted and decreased 1% year over year as reported. Our product mix in Europe is more skewed toward software, so net sales growth tends to be dampened by agency accounting. Enterprise computing solutions operating income decreased 7% year over year, operating income decreased 3% year over year adjusted for divestures and acquisition and changes in foreign currencies.

We made significant progress toward our profitability improvement objectives during the fourth quarter. We expect this to continue in the first quarter and the rest of 2019. Returning to consolidated results for the quarter. Total company operating expenses increased 5% year over year.

Consolidated operating income increased 5% year over year and operating margin was unchanged year over year. Interest expense was $55 million, slightly below our prior expectation. The effective tax rate for the fourth quarter was 24%, within our 23.5% to 25.5% target range. As I mentioned on recent earnings calls, we're seeing more variance quarter-to-quarter than we have in the past due to timing of discrete items.

However, we believe this range is accurate when looking at full-year periods. For the full-year 2018, the effective tax rate was 24.2%. Net income was $225 million, up $3 million year over year. Earnings per share were $2.57 on a diluted basis, toward the higher end of our prior-guidance range of $2.46 to $2.62.

Earnings per share increased 3% year over year. We estimate that the strengthening of the dollar negatively impacted earnings per share by approximately $0.06 and negatively impacted earnings-per-share growth by approximately 3 percentage points compared to the fourth quarter of 2017. Operating cash flow was $263 million as the slower growth environment is allowing cash flow to normalize. During the fourth quarter, the Board of Directors authorized an additional $600 million worth of share repurchases.

We repurchased approximately 2 million shares of our stock during the quarter for $150 million. We repurchased approximately $230 million over the last 12 months and approximately $1.2 billion over the last five years. Entering the first quarter, authorization remaining under our share repurchase program is approximately $729 million. This is a high-level summary of our financial results.

For more detail regarding the business segment results, please refer to the CFO commentary published this morning. Turning to guidance. We believe that total first quarter sales will be between $6.775 billion and $7.175 billion, with global components sales between $4.975 billion and $5.175 billion, and global enterprise computing solutions sales between $1.8 billion and $2 billion. We expect interest expense to be approximately $58 million.

We expect interest expense to be slightly higher in the first quarter compared to the fourth quarter due to higher interest rates on floating rate debt. Also, the first quarter tends to be the least favorable for cash flow from operations and that results in higher inter-quarter borrowings. Our guidance assumes an average non-GAAP tax rate at the high end of our target range of 23.5% to 25.5%. We expect average diluted shares outstanding of $87 million.

As a result, we expect earnings per share on a diluted basis, excluding any charges, to be in the range of $1.84 to $1.96. The average U.S. dollar to euro exchange rate we're using for forecasting purposes is $1.14 to EUR 1. This was the average for the month of January.

We estimate changes in foreign currencies will have negative impacts on growth of approximately $160 million or 2% on sales and $0.08 or 4% on EPS compared to the first quarter of 2018.

Mike Long -- Chairman, President and Chief Executive Officer

Thank you, Chris. Leslie, would you please open up the call to questions at this time?

Questions and Answers:

Operator

Yes, of course. [Operator instructions] We have a question, and it comes from Mark Delaney. You're live in the call, Mark. Please go ahead.

Mark Delaney -- Goldman Sachs -- Analyst

Yes. Good afternoon. Congratulations on the good results and thanks for taking the question. First question, I was hoping to focus in on the margin performance, especially with components coming in at 5% for the full year; I realize it's something that Arrow has been focused on.

It seems that margin guidance that's implied in your first quarter outlook implies some further or continued year-over-year growth in margins. And just hoping you can help us better understand maybe any specific areas where you're seeing that year-over-year growth in margins as your thinking about the first quarter?

Mike Long -- Chairman, President and Chief Executive Officer

Sure, Mark, a couple of things that did drive that. Number one is, we're not seeing sort of a downturn the way that, I think, is being discussed in the marketplace. If you take a look at our book to bill at 0.95, that's still $100 million over last year in the bookings department. So the 0.95 ratio doesn't totally tell the story about what we see.

And our backlog is still up over $500 million over last year and our cancellation rates are normal. We're still seeing strength in aerospace, data processing, industrial and medical devices. And as we said, we're seeing bookings come back in Asia starting this month. So taking all of that together, we feel like we've got pretty solid guidance.

We've also believe we're operating at scale. I'll let Andy talk a little bit about Asia, so he can maybe give you a little deeper dive into what's -- what we see going on there.

Andy King -- President, Global Components

Yes, thanks, Mike. Hi, Mark, certainly, as we look at our Asia business, we've continued to add customers at an unprecedented rates in Asia. Our overall customer -- active customer basis is now up north of 200,000 and all of that's coming from Asia. We're not overexposed to some of the markets that are really driving some of the short-term headwinds as much as others, and therefore, we are still pretty positive about the outlook.

Obviously, we've seen growth rate slow, but we're not talking about negative territory here. So I think, as we look forward within this guidance, we still see some pretty positive outcomes.

Mike Long -- Chairman, President and Chief Executive Officer

Mark, just one more add there. The consumer market is driving a portion of this market decline right now. And as we've said in the past, that's not a huge percentage of our business. And I think that's just something else to sort of keep in mind here.

We know we can't outrun a full-on economic downturn. All we can do is run the business the best we can at that time. But right now, all the indicators that I just gave you and what Andy just told, it gives us some pretty good confidence that we can keep this thing going for a while.

Mark Delaney -- Goldman Sachs -- Analyst

That's all very helpful. I guess, just to follow up along those same lines and even past cycles, sometimes semiconductor suppliers have seen some of these cyclical inflections a bit earlier than distributors. And I'd certainly appreciate all the comments you said on your book to bill and what you're seeing in your backlog, I mean, as we're thinking as analyst about building our models and as you use your experience to think about past correlations within your business and what sometimes the supplier see, should we be thinking about any below seasonal quarters, maybe beyond March, as we're trying to build our models or the investments that Arrow is making in some of these new offerings in your bookings that you talked about improving this month? Do you think you can sustain more seasonal types of trends beyond the March quarter and components?

Mike Long -- Chairman, President and Chief Executive Officer

Yes, let me --- I want to validate for you the fact that you're exactly right when you stated semiconductor cycle. And we usually see it three to six months later, which is usually an early indicator for an economic downturn, too. We, right now, in our bookings and our backlog and that's why I wanted to make those two numbers come to light for you guys. While we totally agree we saw a little bit of a pause in bookings in Asia, the interesting fact that Asia is picking up again right now, and granted we're a little over a month into the first quarter, we're seeing things as stable.

Typically, going into a downturn for us, we would start to see a big increase in cancellation rates, and we're not seeing that. And so that coupled with a positive book to bill, we'd say, "Yes, we're looking pretty good going out there." But as you know, we forecast out 1 quarter at a time. And if we started seeing some changes, we'll certainly address them when we have to as the business. But I also think some of the semiconductor suppliers have been stating that they believe the worst has come and gone.

And while I don't particularly know that to be true, I know the sentiment is changing about the year.

Mark Delaney -- Goldman Sachs -- Analyst

Thank you.

Mike Long -- Chairman, President and Chief Executive Officer

Thank you.

Operator

Thank you. Your next question comes from Adam Tindle. You're live in the call, Adam. Please go ahead.

Adam Tindle -- AMP Capital -- Analyst

OK. Thanks and good afternoon. I just want to start with the question, maybe for Andy and if Mike wants to add. Obviously, nice job on components margins, and I want to touch on the operating structure there in a sec, but try to decompose what happens going forward to components margins.

Just starting on the gross margin side. Can you just maybe talk about what has typically happened to your gross margin during periods of moderating growth? Have you seen suppliers generally get tighter on the channel as they battle their own utilization and margin issues? Do they get more generous because growth is more scarce? Just talk about what you've seen historically? And what might be similar or different now?

Andy King -- President, Global Components

Sure. As we look at our gross margin profile, we're really seeing good positive momentum around our design activity, that has been a big driver of some of the improvements that you've seen as we went through 2018. Typically, as we bring new customers to the table, that is something that suppliers are extremely positive about and want to support us in those endeavors. And of course, as we have driven significant growth through significant customer acquisition, that gives us the opportunity to diversify the amount of products that we sell into those new customers.

So all of those three things have really driven the kind of margin profile improvements that actually we talked about a year or so ago, and now it actually started to come to fruition as we went through 2018. There's no change to those dynamics as we go forward. We're going to continue to invest in those areas, continue to expand our capabilities and pull that through to the margin lines.

Mike Long -- Chairman, President and Chief Executive Officer

The thing that I would add to this, too, is don't underestimate what we've done over the last, my God, since I've been CEO. I'm happy to say that I think our IT journey is largely behind us in the components area, that started off. We saw probably three years, three and a half years ago, Europe took a dip and then came back after the new IT system was in and got a lot more efficient. We saw Asia do the same thing, but their dip was a little quicker.

And then North America started came online hitting the ground running. So that investment that we made, that we discussed with you guys over the years in IT, has helped us set a new bar internally to be more efficient. So that's yet to be tested on the downside. But our forecast would suggest that the downside negative sort of drain on our business could be less because our operational efficiencies are much higher this time.

Adam Tindle -- AMP Capital -- Analyst

OK. Maybe just continuing on that components operating structure. I think if we looked at OPEX as a percent of revenue below 8%, I think it might be multiyear low. Maybe just -- I think you touched on some of the things that enable it, but talk about what a sustainable level looks like? Because I'm sure you want to invest in the business and drive the differentiated growth.

And as you think about gross margin and operating structure, combining them up, do you think this is a year where we can grow profit dollars in components and expand margin? Thanks.

Mike Long -- Chairman, President and Chief Executive Officer

Right now, all indicators are -- we believe we're going to have growth this year. So I'll start off with that, that I believe we're not headed into sort of a disaster. Albeit, I'm saying it with caution. You guys know what's going on in the economy better than I do.

What I will say is the levels that we're at today are levels that do allow us to invest in the business and we are and have been. And as you know, we've invested an awful lot in engineers, and that investment in engineers has helped us with our gross margin. It has helped us grow faster with our suppliers. So that's where we've really put our efforts.

And we don't expect to back off of investing to expand our customer base. Having 200,000 customers, we know, we see. We're enjoying some of the benefits of having that many customers. Now we need to sell more to those customers and continue to grow them at the same time.

So I would say, we started seeing some religion around our sales force and what we expect them to do. And if we can continue to do that, if there are economic declines, we may have some new customers which could help us minimize those.

Adam Tindle -- AMP Capital -- Analyst

OK. Thanks and congrats on a strong 2018.

Mike Long -- Chairman, President and Chief Executive Officer

Thank you.

Operator

Thank you. And your next question comes from the line of Shawn Harrison. You're live in the call, Shawn. Please go ahead.

Shawn Harrison -- Longbow Research -- Analyst

Hi, everybody, and congrats on the solid results. Mike, I wanted to dig into your comments on improvement in the journey in ECS. We did see less of a decline in profitability year over year in that business. Where are you at in terms of getting those VARs that you've added over the past 18 months to selling more software and services? And when do you think you may get EBIT dollars flat for that business on a year-over-year basis in 2019?

Mike Long -- Chairman, President and Chief Executive Officer

Yes. What I'll do is, I'll start -- I'll give it to Sean and I'll come back. But in general, we believe our journey is exactly as I told you last time. We actually believe we might be a little ahead of that, but I don't want to get over my skis.

So we're feeling positive. And as far as the VARs go, I'll let Sean talk about that.

Sean Kerins -- President, Global Enterprise Computing Solutions

Yes, Shawn, it's funny we've been busy on-boarding new customers throughout all of 2018. In fact, we probably activated over 4,000 net new relationships in our major markets. And when we do that, the key is really to expand the scope of those relationships over time and help those selling partners benefit from some of the emerging demand trends that implicitly drive software. And I think what we're just seeing in our Q4 results was better growth in software relative to Q3 and Q2 of last year, and that's the proof in the proof pudding.

So we're going to stay the course when it comes to our ability to bring on new customers. There's lots of good things that are driving that. We're going to stay the course relative to our investments in the mid-market, where we tend to work with the customer set that takes more complete advantage of our full value. And so we think the improvement in Q4 will lead to better things this year.

We're looking for improvement again and certainly in Q1 in the first half.

Mike Long -- Chairman, President and Chief Executive Officer

So just to kind of come back and add to Sean, we have seen largely Europe grab a hold of this strategy maybe a little ahead of North America. And so our European business is relatively healthy, in general, and has produced growth in bottom line and is doing a very good job. So it's not like this model is being tested for the first time, we already have about half of our business that's there. And we really need North America to execute a little stronger on the software side.

But they are -- they're gaining ground on it. They are working hard on it. We believe we are still at the same place we were when we to talk to you about it in December. And I think at that point, we're going to be relatively happy but never satisfied.

Maybe that's the answer I'll put back to you.

Shawn Harrison -- Longbow Research -- Analyst

Perfect. As a brief follow-up, Chris, it was good to see another good quarter of free cash flow. But working cash cycle days you're still up a little bit year over year. Would you expect to be able to bring that down in the first half, given little bit slower growth of the components market?

Chris Stansbury -- Senior Vice President and Chief Financial Officer

In a word, yes. We -- the focus is obviously on continuing to grow faster than market, and we're going to make sure we're smart about that. But there's no question that with slightly slower growth than what we've been seeing, there is the opportunity to do that, and we're very focused on that in the first half. So yes, that's the goal.

Shawn Harrison -- Longbow Research -- Analyst

Thanks a lot.

Operator

Thank you. Your next question comes from Param Singh. You're live in the call. Please go ahead.

Param Singh -- Merrill Lynch -- Analyst

Hi. Thank you for taking my question. Really appreciated the color and the details around the margin improvement initiatives here. But if I just look at your guide, ECS implied op margins probably like the lowest in five years.

And then you are also talking about improving the mix over the last couple of quarters. So can you maybe give some clarity on why this is still down a lot? And then do you think you can grow this margin profile into '19 amid, let's say, a flattened revenue environment?

Mike Long -- Chairman, President and Chief Executive Officer

First, I'll start. I think maybe we should look at your model or something, but I don't know it'd be with your premise at all. In fact, I don't see what you just said as what we're seeing more viable, for that matter, that business is improving. We are seeing an increase in software sales.

So I think there is something that maybe is a mess there that we can help you with. Sean, maybe you can quote some of the percentage growth or things like that that we're seeing in software. Let's go between North America and Europe because we just said that Europe is doing much better, and we will expect North America to do the same. But maybe Sean can give you a vast information, which maybe will help you.

Sean Kerins -- President, Global Enterprise Computing Solutions

Yes, Param, so in Q4, what I would say about our top-line growth, was balance. We saw a good growth across most of our technology categories, as Mike points out, software included. In fact that grew by low double digits on a billings basis globally. We also saw strength in security, and there is a big chunk of software associated with it, but we also grew in the hardware space as well, both industry standard server and storage.

So I was pretty pleased with balance across our line card. We also got good contributions across the globe, both in North America, in Europe, and with our U.S. federal businesses all contributing to a strong close in Q4. And we're seeing similarly pretty good start to the year so far on a year-over-year basis.

And we're actually looking for up margins that are going to start to look better on a year-over-year basis or at least less worse certainly than we had to kind of wrestle through last year. So as Mike said, we're probably looking at different sets of data, but we're feeling a bit better about the progress we've made over the last four to six months.

Param Singh -- Merrill Lynch -- Analyst

Got it. No. Thank you for the color. I was just looking at your comments that you made on the component side and doing the math based on the overall guide, but that's OK.

As a follow-up, obviously, this is a countercyclical business. So given that the overall market is kind of slowed down, would you expect to generate a lot of work in capital cash going into '19 or even in the first quarter? And then outside of buybacks, are there any capital deployments planned in case cash flow increases into the year?

Mike Long -- Chairman, President and Chief Executive Officer

I think there are two things. I will give you a little bit of the color what we typically see. The -- based upon what we see, the inventory levels should start coming down some. When you have the growth that we've had, you get to a peak and the interesting thing about our inventory in Q4, as we told you, the demand strength is still relatively high because there was -- it was $100 million bigger in bookings and so $500 million bigger in backlog.

So that would give you a bit of a pause to not do anything crazy yet with the inventory, meaning, start divesting the inventory. We're not in a panic situation. We are in a situation where that inventory can start coming down and doing well based on what we'd seen. And remember, in the past, a declining inventory -- and yes, this was going to generate tons of cash, but you also generate less gross margin because you're sort of in a panic situation to get our inventories in control.

We're not in that right now. So I'm going to hand it off to Chris there about the cash flow, and we do believe we're going to get more cash flow, but I want to sort of preface it with that of why we see this a little different.

Chris Stansbury -- Senior Vice President and Chief Financial Officer

Just to follow on. As we look at the year -- and we talked about this, I know, at various investor events and whatnot. As the components business grows less than 10%, we tend to see operating cash flow look a lot like our GAAP net income. And we would expect that for the year slightly below that for the year in 2019.

Obviously, we have a seasonality. Q1 is a tough quarter for cash flow. But over the course of the year, we expect strong cash flow. And the focus in the near term will be on buybacks and a little bit of debt reduction to moderate where we are on interest, but those are the priorities.

Param Singh -- Merrill Lynch -- Analyst

Thank you so much for the color, guys. Really appreciate it.

Operator

Thank you. And your next question comes from the line of Tim Yang. You're live in the call, Tim. Please go ahead.

Unknown Speaker

Hey, thank you for taking the question. This is Tiffany on behalf of Tim. From your components business, can you comment on the size of your industrial and automotive exposure? And are you seeing softness in these two markets?

Mike Long -- Chairman, President and Chief Executive Officer

We'll help you with that. We don't put out our total numbers for each of those segments. We saw in the Asia market, which is interesting. Despite what's going on there, our automotive business grew 14%.

North America, the business was flat to up. And in Europe, it was flat to up also I believe. So we are seeing that. Our industrial business in the Americas was up significantly quarter on quarter 6%, and I think about 46% for the year.

And then, of course, aerospace and defense were up for us. We're seeing the same things that many others are in those markets, but as you know, those have been two focused markets for us, one being automotive that we started several years ago, with the building of the same car, which gave us a lot of credibility, many additions to that, doing some stuff within the car, continuing to start to do some things, some direct engineering for some of the automotive manufacturers. So our growth rates were higher. We have seen some of the automotive growth rates slow, but come back into parity of where the market is itself versus being sort of explosive for us.

Andy, do you have anything you'd like to add to that?

Andy King -- President, Global Components

No, I think that's right. I think we've seen pretty broad industrial strength particularly in Europe and particularly in North America. Transportation, if you want to be a little bit more broad, is actually continued to be a growth factor for us. And we expect that to continue as we take out more of those technologies to a wider and more diverse customer set.

So we'll continue to maintain the focus on those segments, Tiffany.

Unknown Speaker

OK. Thanks. And I have a follow-up. For your ECS business, specifically the U.S.

ECS business, are you gaining share? Or are you seeing broad-based end market strength? Thanks.

Sean Kerins -- President, Global Enterprise Computing Solutions

Yes. So Tiffany, as you know, we grew nicely in Q4 in North America and in a number of segments that was faster than market. So in general, we're holding share across the various categories that we play in, and in some cases, we are gaining. We obviously don't talk about specific suppliers, but I feel like we're doing a bit better than holding our own.

Mike Long -- Chairman, President and Chief Executive Officer

Yes. And let me remind you the issue with the business here. This was largely just a data center business, just an enterprise business and just a proprietary server business. And we have been working to change that over the last couple of years with the onset of solid-state storage and conversion that.

So it's really -- for us, it's been a mix issue. Frankly, we are very happy with our hardware sales. We'd like to get our software sales to catch up to the levels that will make a big difference in where the -- frankly, the future of the business is going where we need to be, and that's the change that we're making in it. So hopefully all of that helps you.

Unknown Speaker

Great. Thanks a lot.

Operator

Thank you. And your next question comes from the line of William Stein. You're live in the call, William. Please go ahead.

William Stein -- SunTrust Robinson Humphrey -- Analyst

Great. Thanks for taking my question, guys. I'm hoping maybe we can just attack this difference between what you're seeing and what your supplier are seeing in a little bit different way. Aside from your strong execution, I know there have been some supplier gains, maybe those are a little bit more in the past than more recent, but is one of the differences maybe end-market exposure? Or perhaps it's a matter of whether you are serving more of the International OEMs in China versus sort of local manufacturers? Is that part of what's driving the difference?

Mike Long -- Chairman, President and Chief Executive Officer

Well, I'm not going to get into where all of our suppliers have their business. I mean, you guys know where you focus when you are on calls with different suppliers. I think I said before that, we think a benefit for us -- unfortunately, the benefit is a negative. We're not that big in cellphone devices.

It's not a big consumer item for us. Our consumer business is sort of ho-hum in the schemes of things. And while I would love to go in there and run and take everybody's market share, that's just not something that we have done, but also we're a little more insulated as a result of not having that business when that's the business that is taking the biggest hit. I would say to you on the industrial front, for us, we have gained a lot of new customers over the last couple of years.

And we're selling them more products, which is actually helped us with industrial because of the customer base increase. So we have seen the same, but our medical customer for us looks a lot like an industrial customer too. So we've seen the same type of growth there. But I would largely say it has been the expansion of customer base.

It has been expansions of products into that. It has been increased design activity that has turned to production that has helped us grow. And -- while you could say it's great right now because you're talking to me about the consumer piece, we are relatively low in general on the consumer side, given how big of a market that is in Asia PAC for a lot of our suppliers. Hopefully, that helps you.

William Stein -- SunTrust Robinson Humphrey -- Analyst

It does. And maybe just connected to that, as sort of part of the same questions, on the supplier side, I referred to it a minute ago. I think you had taken some suppliers to concentrate the majority of their business, if not all of it, with Arrow. I think some of those were maybe more on the order of a year ago.

What are you seeing with regard to your suppliers, in terms of share today? Are you still gaining in that way? Or is any of it reverting? And any trend there that we could highlight? Thank you.

Mike Long -- Chairman, President and Chief Executive Officer

Well, really, with the couple of years ago, I think the market shook out. There was still some that came in I think in the first couple of quarters this year. And then the rest of it was just sort of gutting it out from there, back into typical market activity. The big thing that has been working, which we told you it would tick up and it has, is don't underestimate the amount of money and the amount of effort we put into designs and engineering for the customer base.

It's one of the reasons that we're seeing more customers as we're doing more designs, deeper designs and those designs have been going into production, and that all helps with the growth. And a lot of it's, frankly, new customers. I think when we started, we were around 125,000 or 130,000 customers, and we are now hitting that 200,000-customer mark. So that to me is a big indicator that -- well, not only big indicator but also an insulator for us as the market slows.

If we can continue selling more products to our current customer base, that will help us too.

William Stein -- SunTrust Robinson Humphrey -- Analyst

Thank you.

Operator

OK. Thank you. And your next question comes from the line of Matt Sheerin. You're live in the call, Matt.

Please go ahead.

Matt Sheerin -- Stifel Financial Corp -- Analyst

Yes, thank you. A question on the enterprise computing business relative to your exposure to the federal markets and just commentary around the federal shutdown and the impact on the business, whether you're seeing deals get pushed out at all?

Mike Long -- Chairman, President and Chief Executive Officer

Sean, go ahead.

Sean Kerins -- President, Global Enterprise Computing Solutions

Yes. Hey, Matt, good morning. So basically we've seen little to no impact from the partial shut down, assuming it doesn't recur. I'm really not concerned about risk this quarter.

The other thing I'd point out, remember that Q1 is clearly the smallest seasonally quarter across our whole U.S. federal business year.

Matt Sheerin -- Stifel Financial Corp -- Analyst

OK. And just looking at that business and the strength that you are seeing in hardware, I know there has been some drivers particularly the server upgrade cycle in front of Microsoft expiration dates in terms of support. And then of course, there's been, as you talked about earlier, Mike, about the transition to solid-state storage. And just relative to that, A, your comments just on the server upgrade cycle; and B, with the potentially negative impact of memory component pricing coming down, any pass-through there that could create some top-line headwind? Or do you not see that happening?

Mike Long -- Chairman, President and Chief Executive Officer

So Matt, I think, you got a couple of questions there. One is probably just broadly around hardware. Yes, we continued to see pretty good hardware growth, both industry-standard server and storage. So far, in the early part of this year, we haven't seen that change a whole lot.

Relative to Microsoft or any specific server upgrade cycle, the good news is we're fairly broadly exposed in -- there isn't any one workflow that tends to tip our business now that it's a size that it is one way or the other. Regarding Flash and some of the new architectures that comprise the storage category, in general, we've gone well past across several point, where the newer architectures and technologies are clearly the majority of our storage business. So we think we've already kind of digested what that means. You're right, the form factors and the performance and the capacities are such that ASPs are smaller, but our unit counts remain healthy, and we think we've seen ourselves lap that transition.

Chris Stansbury -- Senior Vice President and Chief Financial Officer

And Matt, as part of the memory, we see memory kind of as -- we see it as a commodity. I guess, it is the best way that I can put it. There are certain products that just require memory under all cycle conditions. And yes, that changes by -- some of the memory guys have announced they're going to increase their demand.

So to think that those prices are going to stay up there, while guys are increasing their demand, I would say, no. I would say, they are in their last hope right now coming into a couple of quarters from now watching that memory prices drop again.

Matt Sheerin -- Stifel Financial Corp -- Analyst

So that's just a pass-through for you, but no change to margin obviously?

Chris Stansbury -- Senior Vice President and Chief Financial Officer

Absolutely. It's a total pass-through. Whatever they do, we're going to do. We're not going to -- we've never wanted to corner the memory market here.

Matt Sheerin -- Stifel Financial Corp -- Analyst

Well, that's a smart move. OK. Thanks so much.

Sean Kerins -- President, Global Enterprise Computing Solutions

Remember, Matt, we're not in the commodity game. We're in the solutions game. So -- when we enter a relationship, be it around hardware, software, we're looking to help our partners benefit from the whole stack. So that ends up being a really small piece of the equation.

Matt Sheerin -- Stifel Financial Corp -- Analyst

OK. Thank you.

Operator

Thank you. And your final question comes from the line of Joe Quatrochi. Please go ahead, Joe. You're live in the call.

Joe Quatrochi -- Wells Fargo -- Analyst

Yes. Thanks for squeezing me in. Couple of if I could. I was curious, in the past, you've kind of given an annual update on, like the size of your IoT business.

I was kind of curious what that was exiting 2018? And then I kind of wanted to double click on, you've seemed what looks like an acceleration in the customer adds in 2018. So I was wondering -- I know that you had the new supplier awards, but kind of -- can you help us understand what's driving those new customer add?

Mike Long -- Chairman, President and Chief Executive Officer

Yes, I'll start with that, and I'll leave the IoT piece for Andy. Remember our digital business is growing significantly over the course of the last couple of years. And we also integrated in sort of design-make build-type activities for those customers. We are seeing an interesting influx of customers going from digital into our direct business.

They are meeting the sales force. They are meeting some design engineers. So that has produced a lot of leads for us, significantly increased our reach and allowed us to profile customers in a way that we don't waste a lot of time when we do send a salesperson out to them, where they are not just on a fishing expedition anymore. They've got good legitimized items to follow up on.

All of that obviously makes us better. So the more we can integrate our businesses from digital to the components business and to the edge computing business that we have into sort of Sean's business on the ECS side and then on the cloud, all of those things are going to generate more business. What's interesting is, we see new customers, new entrepreneurs, pushing our businesses together more. So utilizing the sensors, utilizing our engineers and then getting help with manufacturing and then jumping over to ECS on the cloud, we're seeing that more with start-ups and businesses that have never built anything before.

So we know that's going to matter into the future. And if you look at further, the old-line businesses, they move a little slower that way, but nonetheless, if they're going to be an IoT, they're going to need to be on the cloud somewhere. So hopefully, that answers your question?

Chris Stansbury -- Senior Vice President and Chief Financial Officer

And then if I take up the question around IoT, specifically, and actually, the two questions are linked. Because one of the reasons why we're growing customers base so aggressively is the amount of new customers that are actually coming to us to help themselves their IoT solutions. These are outside of the traditional domain of where we may have deployed capabilities. And that's one of the big reasons why we're adding customers at unprecedented rates.

But on the IoT side, we are continuing to grow our IoT business at meaningfully accretive rates versus the total business. We're seeing that very heavily led by the hardware deployment around sensors, and around wireless and connectivity. But increasingly we're seeing that pull-through our services stream, and indeed, our enterprise computing solutions stream. So we see this driving growth across the entire enterprise out of the accretive rate, Joe.

Joe Quatrochi -- Wells Fargo -- Analyst

That's perfect. Thank you.

Operator

Thank you, everyone, and that concludes your Q&A session.

Steve O'Brien -- Event Manager

Thank you, Leslie. Let me say a couple of quick words in closing. I'll review Arrow's safe harbor statement. Some of the comments made on today's call may include forward-looking statements, including statements addressing future financial results.

These statements are subject to a number of risks and uncertainties that could cause actual results or facts to differ materially from such statements for a variety of reasons, and the company undertakes no obligation to update publicly or revise any of the forward-looking statements. A detailed informations about these risks is included in Arrow's SEC filings. If you have any questions about the information presented today, please feel free to contact me. Thank you for your interest in Arrow Electronics, and have a nice day.

Operator

[Operator signoff]

Duration: 61 minutes

Call Participants:

Steve O'Brien -- Event Manager

Mike Long -- Chairman, President and Chief Executive Officer

Chris Stansbury -- Senior Vice President and Chief Financial Officer

Mark Delaney -- Goldman Sachs -- Analyst

Andy King -- President, Global Components

Adam Tindle -- AMP Capital -- Analyst

Shawn Harrison -- Longbow Research -- Analyst

Sean Kerins -- President, Global Enterprise Computing Solutions

Param Singh -- Merrill Lynch -- Analyst

William Stein -- SunTrust Robinson Humphrey -- Analyst

Matt Sheerin -- Stifel Financial Corp -- Analyst

Joe Quatrochi -- Wells Fargo -- Analyst

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