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D&H's Dan Schwab: Partner Investment Is Propelling D&H's Growth, Expect More In 2017

D&H Co-President Dan Schwab looks back on what drove the distributor’s growth in 2016 and where the company will invest moving into 2017.

Propelled by an increased investment in its reseller partners, D&H Distributing reported overall sales growth of nearly 8 percent sales across all product lines for the 2016 calendar year.

Dan Schwab, co-president of the Harrisburg, Penn.-based distributor said the company’s sales growth in 2016 was driven by a number of product and vertical categories, not defined by a single product or service like it was in 2015 when the Windows Server 2003 upgrade boosted the company’s sales growth.

’This year was exciting because [the growth] was more broad-based than in other years,’ he said, adding that the company’s investment in its reseller partners was a key reason the company saw growth this year.

[Related: D&H Co-President Dan Schwab Talks 'Investment Mode,' A Cloud-Themed Trade Show And Hot SMB Products]

Schwab said the key categories that drove growth for the distributor during the calendar year included a 12 percent increase in networking security sales and a 16 percent boost in solid state drive sales; He expects both categories to grow throughout 2017.

D&H reported double-digit growth in seven other product categories, including a 77 percent growth in sales of IoT products, 75 percent growth in its new cloud offering, and 52 percent growth in 3D printing solutions.

Schwab said that D&H had its greatest vertical successes this year in the education and medical spaces, thanks – in part – to the investment that D&H made in training its reseller partners on how to leverage federal grants in education and better understand federal medical regulations.

"We see that the investments that we made in training in education really paid off … A year ago, not a lot of people were bullish heading into 2016; D&H was unique. But this year, headed into 2017, coming off of a year of almost 8 percent growth in the VAR business, we are even more optimistic," Schwab said.

Throughout 2016 D&H continued to build on the programs, training and education services that it provides to its reseller partners.

This year, the distributor introduced some new programs, including a pre-sales support program that is open to all of the distributor’s reseller partners and is aimed at helping resellers build personalized sales plans that target a broader spectrum of solutions.

D&H also unveiled a best-practices solution map called the SMB Blueprint Program and launched its first cloud portal, called the Cloud Marketplace, to automate the sale of both Microsoft 365 and Azure to resellers.

Most recently, D&H launched a new Transaction Annuity Portal, which helps resellers take advantage of vendor annuity programs and helps them keep track of the licenses that accompany those programs.

On top of those new programs, D&H invested deeper into its support for its education resellers this year. The company met with about 100 of its top education VARs, Schwab said, to better understand their business models and help vendors build better reseller programs.

"We are really trying to create programs exactly to [our reseller partner’s] specifications – not ivory-tower type programs or solutions, but brass-tacks training and education built for them," Schwab said.

"We will be running 20 percent more events, trainings and customers invested in certifications … When we look at the ROI, [of those programs, they] are all additive and we intend to keep our foot on the gas," he said adding that, next year, D&H will be focusing on support in areas including infrastructure-as-a-service (IaaS). ’We are very excited about it,’ he said.

Moving forward into the new year, Schwab said D&H will be continuing to invest in its partner support programs, and will continue to talk to more of its partners to discover what their needs are and how their business models are changing.

"For next year, when we look into our crystal ball, we are seeing a continuation of this year, there is not necessarily a product or technology that is coming to market that we think is changing the market that dramatically for us, but we are seeing all of the things that [grew this year] accelerating," he said.

Schwab said he expects IaaS and cloud sales to accelerate during 2017, and added that network security would also continue to be an important product category for the channel.

"Security is a subject that every company has made a priority, so even if they have made it a company focus, the bad guys are, unfortunately, usually a step ahead of the good guys ... and I think that will continue to be a hot area,’ he said.

"There is more optimism with our customer channel than there has been a long time, which is very healthy, and I think that has a lot to do with the end users," he said.

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