D&H Distributing reported revenue growth of 20 percent for the fiscal year ended April 30, according to the privately-held distributor. Michael Schwab, co-president of the Harrisburg, Pa.-based company, now in its 93rd year, spoke with CRN’s Scott Campbell about the last year, what solution providers can expect in the next 12 months, and where the opportunities will be found. The following are excerpts from the conversation.
D&H grew 20 percent in the last fiscal year, up from a 6-percent increase in the fiscal year ended in April 2009. Where did you guys grow?
It started through Q2, the fall, through Christmas and kept accelerating. We saw momentum build throughout the year.
We saw some early signals that business was picking up, that Windows 7 was launching and getting good reviews and getting good momentum. That [happened] while consumers were paying off debt and looking for jobs, what disposable income they did have was being spent on technology products. We didn’t see a significant drop off on notebooks and Netbooks and printers and desktops.
How did you adjust the business to prepare for a recovery?
We continued heavily in marketing, saying let’s drive the categories that had momentum. At the same time, if there’s going to be business investment two things had to happen. First, resellers are going to need more credit.
If they get the opportunity to close a sale, we don’t want to confine them by them not being able to acquire the products they need. The second thing we knew would happen is business spending would not dry up forever. Even though GDP was negative in the back half of 2009 and people had excess IT equipment, we knew there would be a moment tin time where that changed. That moment hit in early 2010 where businesses were spending again and investing in new technology that brings them greater productivity, security and mobility.
Where do you expect to see growth for the next year?
Forecasting for this year, servers are a big opportunity in the market, particularly in the SMB channel. We’re building out more technical expertise in that endeavor as well.
What vendors are you driving in that space?
We drive the Intel solution, the Intel Modular Server, and in the branded space Hewlett-Packard] and Lenovo.
Then looking at other vertical-market solutions that are driving increased technology spend, voice over IP solutions, unified communications and using the data network as center of a voice solution is gaining traction from small business up to Cisco’s Unified Communications technology.
Video looks like another strong application. It’s been at the consumer level through Web cams and in the enterprise through telepresence. But in the middle has been a gap and void. Cisco just acquired Tandberg, Logitech acquired Lifesize and I think you’ll see more movement in that space.
Next: How has your customer base changed over the last year? Did a lot of guys go out of business, or did the remaining folks get stronger?