Exclusive: D&H Posts 30 Percent Growth In Its Advanced Solutions+ Enterprise Group, Now A Multibillion-Dollar Business

‘The growth and partner alignment has dramatically exceeded our expectations since we put our stake in the ground to become a dominant enterprise distributor last year,’ says D&H Co-President Dan Schwab.

D&H Distributing is breaking beyond its small and medium business (SMB) roots with a whopping 30 percent growth in its Advanced Solutions+ enterprise-focused business unit in both the last fiscal year and its first quarter ended July 31.

The Advanced Solutions+ business success has accelerated over the course of the last year as D&H has expanded its line card with more enterprise offerings including Dell enterprise servers and storage.

D&H Co-President Dan Schwab said the distributor has tripled its investments in the Advanced Solutions+ organization over the last year and it is now a multibillion-dollar business with 320 employees and its own sales force.

“D&H has established ourselves as the dominant SMB distributor, and we will never walk away from that but at the same time we saw an opportunity to become a great enterprise distributor as well,” said Schwab. “The growth and partner alignment has dramatically exceeded our expectations since we put our stake in the ground to become a dominant enterprise distributor last year. D&H is becoming a preferred destination for many of these enterprise solution providers.”

D&H’s enterprise business will finish this fiscal year at about $2.2 billion or 32 percent of the company’s more than $7 billion in annual sales with plans to grow it to over 50 percent in the next three years.

Schwab said the distributor’s enterprise market success is being bolstered by the AI boom with a dramatic increase in enterprise server and storage deals.

“The tremendous growth we are seeing is driven by large data center infrastructure buildouts and the price increases due to commodity shortages,” he said. “That will eventually level off. Despite any long-term deceleration we expect to continue to become a larger part of the overall enterprise distribution market.”

Schwab said he would put the distributor’s enterprise technical resources up against any and all competitors. “I would put our co-owner sales and technical resource teams up against any other distributor,” he said. “We continue to invest in those enterprise resources.”

The D&H enterprise OEM partners driving the biggest growth are Dell Technologies, HPE including Juniper Networks, Lenovo and Cisco, said Schwab.

Besides those mainstay vendors, D&H has broadened its enterprise reach with partnerships with Fortinet and Veeam.

With the soaring enterprise solutions growth, D&H is more than doubling its credit lines to more than $1 billion, up from $250 million to $400 million in preceding years.

“In order to accommodate those partners and ensure they have the capacity to grow we have leaned in with credit lines two and a half times our historical rates to support their business needs,” said Schwab.

The increased credit lines are being driven by enterprise-focused partners embracing D&H’s expanded enterprise portfolio because of its outstanding high-touch business model and service level, said Schwab.

“We now have a broad portfolio of vendors that makes us a great destination,” said Schwab (pictured). “When you combine that to our service levels compared to our peers, D&H is winning the hearts and minds of enterprise partners.”

The Dell enterprise server and storage partnership is an “incredible validation of our position in the market and confidence in our ability to execute on their behalf,” said Schwab.

The Dell partnership with D&H came after Dell Technologies undertook a formal review of its North America enterprise business and terminated its distribution agreement with Arrow Enterprise Computing Solutions earlier this year.

As part of the aggressive enterprise buildout, D&H has added more than 30 “strategic hires” aimed at boosting the enterprise business including the addition earlier this year of former Amazon Web Services Global Partner Development Manager for Ingram Micro Jason Hernandez, a 22-year channel veteran, as vice president of Advanced Solutions+ sales and HPE, and former Cisco Distribution Sales Manager Obed Garcia, a 28-year channel veteran, as vice president of Cisco solutions.

Precision Computer Services, a Shelton, Conn.-based MSP, has grown its enterprise business through D&H by 30 percent over the last year, matching D&H’s own enterprise growth, said Jeff Clark, executive vice president at Precision.

D&H’s secret sauce is the “true business partnerships and relationships” they build with MSPs like Precision, powering sales growth and profitability for his company, said Clark. “They care,” he said. “It’s all about client experience and the service and the value-add they provide. They are the first true value-add distributor.”

That value-add, superior client experience has resulted in Precision doing 70 percent of its distribution business with D&H, up from virtually nothing two years ago when it established the partnership.

Precision established the partnership with D&H after being frustrated with a larger distributor, said Clark. He sees the larger distributors going in the opposite direction, away from the value-add client experience that distinguishes D&H.

“D&H realizes that the only thing that differentiates them over the other distributors is the experience they provide partners,” he said. “That means having the best resources and delivering the best outcomes with the best communication and collaboration. They realize they are in a service industry – not the distribution industry. That is why they do so well!”

D&H has helped Precision expand into new practice areas by leveraging the trusted D&H services relationship to provide its customers audio visual solutions and Microsoft software licensing solutions.

“We’re using some of D&H’s services resources to deliver nationally,” he said. “By leveraging D&H and their presales and delivery teams we now feel confident in going after business that traditionally hasn’t been part of our core value to our clients. It has opened up more opportunities for us by leveraging those D&H resources. We have had really good experiences with their presales and delivery teams and their sales operation team is top notch. They have an amazing team!”

Clark is looking forward to D&H taking on additional enterprise product lines so he can move all of his distribution business to the company. “If they took on the other enterprise lines we sell they would have all our business,” he said.

Clark said D&H handles his company’s Cisco and HPE business and the company is in the process of moving its Dell business to D&H.

Abtech Technologies, an MSP with a StorTrust cloud disaster recovery service powered by Dell enterprise storage offerings, is also moving its Dell business to D&H, said Abtech Sales Director Enterprise Solutions USA Patrick Scanlon.

Abtech did a distributor “bake off” and selected D&H, said Scanlon. “We felt they would give us the focus we wanted,” he said. “It’s been great. They are meeting with us weekly and making sure we feel good. We have a direct account rep we can reach out to but there is an army over there to support us!”

Scanlon said he has also been impressed by the access to D&H’s top executives including Schwab who proactively reached out to him. “It showed how much they care about our business,” he said. “Having that access to all of their executives including the director of their Dell business is a huge deal. A lot of times with distributors you get sent to an inbox.”

Scanlon said ultimately the key to selecting Dell was the “trust” D&H established with Abtech. “Inevitably things go wrong in this industry especially with everything going on today with price changes and shortages,” he said. “We know if we make a phone call to D&H, someone is going to answer every time and it is not going to get passed along with a ticket number.”

Michael Haley, co-founder and chief business development officer at Edge Solutions, an Alpharetta, Ga. enterprise solution provider, said working with D&H has made his enterprise solutions business “much more profitable by reducing the complexity” of dealing with the large enterprise OEMs.

“The culture and people at D&H inspire me with confidence to do more enterprise business with D&H,” said Haley. “Their culture matches our culture at Edge Solutions. It’s all about the people. As they add more enterprise lines their business is going to grow exponentially with Edge Solutions and other enterprise solution providers.”

When Dell Technologies terminated its distribution agreement with Arrow Enterprise Computing Solutions earlier this year, Edge Solutions made the decision to move that business to D&H, said Haley.

“It took us three seconds to move our Dell business to D&H,” he said. “It wasn’t even a conversation. It was the biggest no-brainer business decision we have ever made on multi-millions of dollars of business.”

Haley said the D&H people-oriented culture with the staff of the employee-owned company always stepping up to help partners is a critical differentiator for the company. He cited several examples where D&H has “picked up the phone” in high-pressure sales situations to help Edge Solutions close a deal.

“No disrespect to other distributors but D&H shows up every time!” he said. “They answer the phone. If I call Matt Riley (D&H vice president of credit and financial services) he is going to pick up the phone or call me back in five minutes.”

In fact, D&H’s ability to extend credit has been a critical factor in Edge Solutions’ growth, said Haley. He said one of the reasons he moved business years ago to D&H was the company’s credit facilities and ease of doing business. “The D&H credit organization has always been there for us,” he said. “Integrity still matters. If you do what you say you are going to do it is amazing what you can get done!”

Last but not least, Haley said D&H has a proven track record of continuing to invest in enterprise technical sales talent and resources. “They are so far ahead in terms of continuing to invest in the enterprise talent that continues to make us successful,” he said.

Schwab, for his part, said that D&H will continue to invest in the Advanced Solutions+ business in the wake of the “results outpacing expectations. “We expect to have double-digit growth in this business for years to come.”

Despite the move into the enterprise, Schwab stressed that the company does not change the high-touch SMB character that is part of the D&H employee-owned co-owner culture. “Not one iota,” said Schwab. “Our service is our differentiator. Our culture and customer intimacy business model ensures we align to our partners to help them win versus asking them to align to us.”

Schwab’s message to enterprise partners not familiar with D&H: “Let us show you what we can do for you. We believe we are an ideal solution for you and we would love to exceed your expectations if you are willing to partner with us.”

In fact, Schwab said, he would be willing to personally take the first call from any solution provider to introduce them to D&H.

All that said, Schwab said he could not be more optimistic about the future of D&H in the midst of the AI boom and the company’s enterprise acceleration. “D&H sits at the crossroads of this next generation of technology investments that changes every industry in our country,” he said.