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D&H: Product Lineup Key To Revenue Growth, Services Up 100 Percent

Privately owned D&H does not release detailed financial data but says annual revenue was near $4 billion and the distributor is growing quickly in Pro A/V signage, cloud services, unified communications and network security.

D&H Distributing said it saw 21 percent revenue growth this year on the back of its product lineup, with services growing as well.

“The majority of the revenue growth came from products, but our services, inclusive of cloud, that was all up 100 percent,” Vice President of VAR Sales Peter DiMarco told CRN. “We’ve added a number of implementation services this year, so that’s taken off. We’ve added Device as a Service and our cloud business is up 100 percent as well. The 21 percent was primarily driven by product.”

The privately owned Harrisburg, Pa.-based IT distributor does not release detailed financial data, but it said annual revenue was near $4 billion. Some of the figures the company did announce suggest it is growing quickly in Pro A/V signage, which was up 121 percent; cloud services, up 108 percent; unified communications, up 55 percent; and network security, up 41 percent.

“Investing in areas like Pro A/V and federal has really helped shore up our business, as well as other areas like security, has helped us stay ahead of the curve,” he said. “And then secondly our ability to act quickly. We’re able to mobilize resources; we think we’re pretty quick in the market. We hear that from our vendors continuously. So rallying around collaboration platforms. Security, cloud, key areas like K-12 has allowed us to continue to deliver double-digit growth.”

DiMarco said with its focus on SMB customers, D&H is able to invest in new product categories and new markets faster than larger distributors, making the company more nimble in order to meet the demands of partners.

“SMB business is absolutely in line with what we expected,” he said. “I think some of our other business depended on how the market is doing, but overall, our focus on the commercial SMB and the growth that we see in retail and e-tail has really helped us support our growth.”

With its focus on the small solution provider and the SMB space, partner growth is a critical component of revenue, DiMarco said. In that area, D&H’s partner “breadth” has been up seven of the past eight quarters, including this one, he said.

“It’s really important that we not only activate partners, but that we accelerate partners to revenue levels,” DiMarco said. “It does two things, one it helps us grow our business, it validates our ability to go and be successful and take share, but also after doing more business with us, they typically participate in more services, more engagement venues, they do more training and so all of those are up double digits. When you think of customers who do $100,000 a month, those are all well up from where they were last year and our breadth continues to grow when we look to activate partners.”

D&H is looking to keep that growing next year and plans to host events outside Pennsylvania, with trade shows on the schedule for The Woodlands, Texas, as well as Chicago. DiMarco said the educational and service components that D&H offers its partners will also grow in 2019.

“We’ll have more solutions and more enablement in key solution areas like security, as an example, and cloud and intelligent edge,” he said. “All of those areas we’re investing in. You’ll see an increased amount of education through webcasts, training and boot camps.”

Looking ahead financially to 2019, DiMarco said he believes the many of the company’s end users are in the middle of a refresh cycle, which saw sales of premium notebooks surge 31 percent, and data centers move up 26 percent this year. He said in 2019, smaller public sector, state and local business will continue to grow, K-12 will grow in the Pro A/V space, devices will grow, and cloud will grow in the mid to upper digits.

“The market is a bit challenged right now. There could be some headwinds on the horizon, again because of where we sit in the market, we tend to avoid some of the bigger challenges,” he said. “As we continue to make traction in the SMB space, and certain markets, like public sector, we should expect a number of categories to be in double digits, like Pro A/V as an example.”

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