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Credit Crunch Hits The Channel
8:00 AM EDT Mon. Oct. 27, 2008
From the October 27, 2008 issue of CRN
Page 5 of 6
D&H Distributing Inc. has already added $25 million worth of new lines of credit for its partners this year and is ready to consider doing even more if credit markets remain tight enough to start impacting resellers and their customers.
Dan Schwab, co-president of the Harrisburg, Pa.-based distributor, said D&H continues to take a conservative approach to its business, but the fact that it is a privately held entity gives it the flexibility to work with solution provider customers to weather the current financial storm.
Schwab spoke from the D&H technology conference in Hershey, Pa., where the distributor played host to more than 1,000 VARs and about 130 vendors examining and discussing the latest PC, consumer and network technologies.
"We just had a good September, and I'm hearing many [resellers] had a good September," Schwab said. While acknowledging recent turbulence in the financial and credit markets, he said the company continues to maintain its current credit programs for VARs without changes. "That line of credit is very important for them," he said.
Despite the relatively strong September, though, Schwab said that he has begun hearing concerns from VARs—and from some VARs that have heard concerns directly from their customers—regarding a tightening of credit.
It's still unclear what the total impact of the global financial and economic turbulence will be on the IT space. Earlier this month, IBM said it would beat expectations for its most recent quarter when it formally announces earnings. Other companies, like Intel Corp., have drawn the attention of bargain-hunters on Wall Street ahead of the next round of earnings reports.
The D&H conference in Hershey put on display a number of products and technologies from edge-of-network devices, including HTC Corp.'s new Diamond smartphone, to components, peripherals and network technology.
The distributor also said it is increasing purchase incentives for VARs, ramping up a specialist team to provide resellers with vendor-specific help with integration and technical information, and boosting support and product availability for fast-selling segments including VoIP and Windows Mobile platforms.
"This is our time to double-down on the channel," Schwab said.
--Edward F. Moltzen
Next: Gartner Lowers 2009 IT Spending Outlook
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