D&H: Cost-Cutting Needs Drive Sales Of Notebooks, Security, Servers

The three fastest-growing categories for the distributor in the third quarter were notebooks, network security (hardware and software) and servers.

"These are things that hit critical mass and had widespread adoption in the enterprise three to five years ago," Schwab said. "But we're in the middle of a macroeconomic cycle for the small business customer base."

During this recession, D&H's resellers have focused on driving technologies to their small businesses that can cut costs and allow end users to scale their business or drive productivity, Schwab said. Mobility solutions and network upgrades can help drive those cost reductions, he said.

"Those are business investments to make during a downturn. Both are in full swing," Schwab said.

D&H's notebook sales increased 57 percent in the third quarter, compared to the same period last year. Network security hardware and software increased 51 percent. Servers and desktops each increased 37 percent, according to D&H.

Other high-growth product categories for D&H included MFPs (35 percent year-over-year growth), VoIP (34 percent), scanners/imaging solutions (26 percent), projectors (19 percent) and digital cameras (18 percent). Cost management also is a big reason behind those product categories, Schwab said.

"With MFPs, the cost per page is the most cost effective in the market today. If they were leasing a copier, a small business could use a couple of MFPs to copy, print and scan at a lower cost," Schwab said. "The same thing with VoIP. If they do a lot of calls or transactions, VoIP is a cost benefit to them."

Scanning/imaging can save costs for companies that need to archive documents, he said. "There are plenty of studies showing cost-effectiveness vs. armies of file cabinets."

Product categories that didn't fare well can be traced back to providing little cost savings, Schwab said. Display are an example, he said.

"Businesses aren't upgrading their monitors now. That's a nicety, not a necessity," Schwab said. "There are some software purchases that aren't happening too. Companies are looking more to see what licenses they really want to have. Is everyone using it or just a couple of people within the company?"

Revenue from input devices such as keyboards and mice also isn't growing, Schwab said. "Unless it stops working, it's an area they may have held off," he said.

Overall, D&H sales grew 7.9 percent in the third quarter compared to last year, Schwab said. The growth was slightly ahead of D&H's second-quarter sales of 5.5 percent, he added.