D&H Co-President Dan Schwab On The ‘Rolling Thunder’ AI PC Opportunity For Partners

D&H is in the process of outfitting its 800 person sales/support team with AI PCs and rolling out a road show that aims to get 5,000 partners selling the new systems.

D&H Distributing Co-President Dan Schwab said the distributor expects a “rolling thunder’ demand from partners for AI PCs.

“The demand is a rolling thunder,” said Schwab in an exclusive interview with CRN on the multimillion dollar backed D&H AI PC sales offensive. “It is going to continue to build month over month, quarter over quarter. Today we are talking about early adopters. These are people that need to refresh their systems today.”

D&H already has AI PCs in stock or on the way to the distributor from HP, Dell, Lenovo, Microsoft Surface and MSI.

D&H is in the process of outfitting its 800 person sales/support team with AI PCs and rolling out a road show that aims to get 5,000 partners selling the new systems.

“D&H is making a multi-million dollar investment to continue our history of investing ahead of the curve and looking around the corner to ensure our partners are prepared, trained and armed for the next wave of opportunity,” he said. “It’s the future. Clearly our recommendation is if you are looking to upgrade your system you need to future proof your investments. That is what we are telling our partners.”

Schwab said he does not expect the AI PC phenomenon to hit “critical mass” this year. “This is going to be a multi-year opportunity that will continue to build and gain momentum,” he said.

“We believe the next three years will be a renaissance of opportunity for our partners and manufacturers as it relates to the natural upgrade cycle, the acceleration of AI PCs and Windows 11 and the forthcoming Windows 12 sometime over the next year,” said Schwab.

What is driving the big investments D&H is making in AI PCs?

We believe the next three years will be a renaissance of opportunity for our partners and manufacturers as it relates to the natural upgrade cycle, the acceleration of AI PCs and Windows 11 and the forthcoming Windows 12 sometime over the next year.

How are you preparing for the AI PC opportunity?

The first thing we are doing is we are buying 800 new AI PCs for our sales and support teams. We need to leverage the technology we sell. How can our sales reps evangelize the technology if they, in turn, are not utilizing and fluent on this groundbreaking, innovative technology. With that we are going to have eight trainings over the next two months from all the PC OEM vendors and suppliers including Intel, AMD, Qualcomm, HP, Dell, Lenovo. That training includes education on their AI PC roadmaps.

The tip of the spear is our internal people with trainings in April and May. This summer we will doing a roadshow around the country to train our partners how to leverage AI PCs and how it will add value for their end user customers!

We are going to have both virtual and in person trainings for partners starting in late May and accelerating from there. We expect to train and educate over 5,000 partners by the Fall.

When do you expect to get AI PCs in the hands of your sales reps and from what vendors?

We have units we are demoing and testing for our sales department rollout.

Are you going to have a discount AI PC program to put these products into the hands of your partners?

We have not rolled out a demo program. We are talking with the (AI PC) manufacturers about a discounted demo program to put these in the hands of our partners.

The first step was doing it for us internally. The next step is to work on demo units for our partners.

How big an investment is D&H making in this AI PC initiative?

D&H is making a multi-million dollar investment to continue our history of investing ahead of the curve and looking around the corner to ensure our partners are prepared, trained and armed for the next wave of opportunity. It’s the future. Clearly our recommendation is if you are looking to upgrade your system you need to future proof your investments. That is what we are telling our partners.

An early barometer of the AI PC opportunity is the fact that over the last 30 days we have seen quotes and order activity on laptops, PCs and related technologies are up strong double digits over the same time last year. That shows the AI PC inflection point is beginning to occur.

What kind of demand do you expect out of the gate for the AI PCs?

The demand is a rolling thunder. It is going to continue to build month over month, quarter over quarter. Today we are talking about early adopters. These are people that need to refresh their systems today.

However, the resellers and therefore their end users need continued education on the AI PC value proposition and the use of these models.

One of the things we want to do is have our resellers where appropriate utilize AI in their businesses. Just like D&H’s sales reps need to be fluent to be able to talk about AI PCs so do our partners need to be fluent to talk to their end users.

Today there is broad consumer awareness (for the AI PCs). However, the initial uptakes are more in the enterprise markets.

We are starting to see SMB demand build and as we enter the summer and early Fall we believe with back to school you’ll see huge consumer marketing and awareness which will further accelerate the upgrade cycle.

How would you put this AI PC opportunity in historical perspective?

D&H has been an important player in the PC market from the beginning of the industry. We were Packard Bell’s largest distributor and helped launch Commodore 64.

This has the potential to be an upgrade like Windows 95 and other major upgrade cycles.

Is this a renaissance in end user computing like we have never seen before?

Yes! Depending on the end user and their business this is an unprecedented opportunity to drive either new capabilities or improved processes that will allow end users to invest dollars in other parts of their business for growth

What is the difference between D&H and some other distributors as you make this big AI PC investment?

D&H is hiring. D&H is open for business. While other distributors grapple with different priorities around private equity or going public, D&H remains 100 percent partner focused.

Other distributors run their businesses based on quarters. They are forced to make decisions short term. Being a private and employee owned company we have the luxury to make a decision for years at a time.

This is not an investment where we are looking for a return on investment this quarter or next quarter. We wholeheartedly believe that putting our stake in the ground now is critical to ensure that D&H and our partners are ready for the wave of opportunity!

That is why we added over $400 million in downstream credit for partners. That started last year. On a rolling 12 month basis we have added over $400 million in downstream credit. That is the largest ever credit increase in the history of D&H.

What is sparking that big increase in credit for D&H partners?

I think it is two-fold: AI PC is part of it. I also believe that D&H has become a preferred destination due to our service model. More partners are leaning on us more for advanced technologies and other categories. So we did it to make sure that we had the credit capability for them to grow.

Also remember we invest in partners to move them up the stack. I would say that is a primary differentiator from D&H compared to other distributors. We go from partner to partner to help them figure out how to grow and expand their business, how to get more certifications. We want them to move up the stack both from a technology and end user size perspective. So if they are selling to the SMB sub-100 user seat perspective, we want to help that partner get to the mid-market of 500-2,500 seats. So we really look at investing in partners very differently than our peers because we have such a long-term vantage point. That builds immense loyalty with our partners.

What are you seeing from other distributors regarding the AI PC opportunity versus the D&H approach to this market opportunity?

The good news about D&H is that we don’t care in many respects what our competitors are doing. We always tell our employee co-owners: Let’s worry about what we can control within our four walls. Regardless of where our competitors are going and whether they are doing unnatural things and whether the market is expanding or not, we want to have a North Star of what is best for partners and manufacturers. That is what drives us!

People in the industry look at us as the Rock of Gilbralter. We are not changing. We tend not to over-swing the pendulum. We hate revolutions. We love monthly, weekly and daily evolutions. We always say – “We reserve the right to get smarter. Throughout this we are going to learn. We are going to getfeedback from our partners and vendors and then we are going to pivot on a dime so that we can be the most effective partner and consultant to our reseller partners.

What do you see as the big AI productivity game changer for businesses embracing AI PCs?

When the first PC came out it was a great word processor. That was one of the early functions that people used it for. Then it became a productivity with Excel with data analytics driving the productivity gain. Then systems evolved and you had communications enhancements with your own network and then with email and the internet. All of a sudden that was the next wave of productivity and information sharing that the PC enabled.

Today we are entering the age of AI PC with Microsoft Copilot as the linchpin where productivity gains across any level of an organization from an order entry person to a CEO. So for instance, we now see people using Copilot to recap meetings and send out action items.

What we’re hearing from partners are that these use cases are different for every company. That is what is so exciting! With AI the world is your oyster. The technology can be used to improve your business where ever there are inefficiencies. It is providing new insights and productivity gains.

What is going to be the impact of putting this in the hands of your partners?

The renaissance we spoke to earlier basically is when you think about selling technology to an end user there are different opportunities at different times. For example, an end user may be looking at a server upgrade, a wireless network upgrade, conference room upgrades or a cybersecurity evaluation.

AI is a case where resellers are able to go to end users and have business conversations with customers. AI inextricably ties partners and end users closer to each other. What happens is you are getting end users to share their pain points or where they don’t have good optics on business data. It leads to a very in depth business process conversation.

How do you see this AI PC sales cycle playing out?

This is a rolling thunder. This is not something that will hit critical mass by October 1 of this year and that’s a good thing. This is going to be a multi-year opportunity that will continue to build and gain momentum.

What are going to be the differences in the AI PC products that the major vendors bring to market?

One of the most important things that our organization will need to do is to shine a light and provide clarity on the differences in the offerings from the manufacturers and the chip set providers. Everyone is approaching this slightly differently.

AMD has new Ryzen AI powered processors. Intel has its AI PC initiative with its Intel Core Ultra processors. And by the way we were recently honored as US branded systems distributor of the year.

Qualcomm is launching SoCs (Systems on Chips). It integrates their CPU, GPU and other processors into a single chip.