D&H Co-President Discloses 2024 Growth Areas

D&H Distributing says its year-over-year sales grew in double-digit percentages for fiscal 2024, with cloud, networking, modern solutions, ProAV and power products all growing more than 20%.

D&H’s fiscal year ended April 30 The company's co-president, Michael Schwab, said he expects to see similar growth this year in most of the same categories, plus artificial intelligence (AI).

“We’re off to a great start in our new fiscal year,” Schwab said. “You see the momentum continuing to elevate interest in IT technology and security and artificial intelligence. We're very excited about what the future holds.”

Although artificial intelligence (AI) was not among the 20-percent growth area, Schwab said AI readiness will be among D&H’s major areas of investment over the next year. The distributor's plans call for training close to 5,000 MSP and VAR partners through its Go Big AI program. That includes an “AI 101” SuccessPath seminar designed to look at AI PCs. Executives from Microsoft, Intel and HPI Technologies will appear on an AI panel at D&H’s THREAD Technology Conference, June 18, in Hershey, Pennsylvania.

AI Could Fuel Further D&H Growth

AI didn’t make D&H’s 20-percent growth list because it mostly started to catch on with its Go Big AI program launched in February. Schwab likened it to the early days of the internet when people didn't fully realize all the capabilities it would add for data and content accessibility.

“I think we're on that same road map for artificial intelligence that it is hard to contemplate sitting here today,” he said. “[There are] all the use cases that will evolve over time to make that technology as robust as the capabilities that are inherent in the technology.”

D&H's Michael Schwab

Schwab said he sees Microsoft Copilot as the tool of choice to access data and make it usable across areas such as marketing, sales, finance and creative tasks.

“The AI trend we read about around ChatGPT and others is more holistic from a consumer perspective,” he said. “How do you create a better output from your input? But I think the key for a business is not necessarily these large language models (LLMs) that exist externally. It's about how you take your own data and make that usable in a much more reliable and productive way. And that's where the AI capabilities are for an MSP — to be able to correlate best use cases for an end user organization is critical.”

Devices Also Teed Up for Big 2024-25

AI is among several factors that Schwab said he expects to cause PCs sales to spike in the coming years.

“Around AI, you have neural processing unit (NPU) chips from the top vendors, including Intel, AMD, and Qualcomm,” he said. “That will cause a device refresh, in combination with Windows 11 being rolled out in a much more robust way as Windows 10 goes to end of support [in October 2025]. Every organization is going to be looking at their stable of devices and saying, ‘We want to make sure that we're giving our employees the technology they need to be successful.’"

Schwab said he anticipates growth of cloud solutions and power products to carry over through at least the next year.

Cloud Solutions

Schwab said SaaS products such as Office 365 still show robust growth, driving strong recurring revenue streams. However, data privacy and security concerns also prompt organizations to keep sensitive data on-premises.

“It’s about cost optimization,” he said. “We're very bullish on our relationship with Lenovo and HPE when it comes to their server technology, so we envision a future state in which most organizations are running localized resources and workloads, and then also using the cloud as a cost-efficient model to enhance and support other transactional needs that they have."

Power Management

“There’s an interesting dynamic coming with power and how that is going to change how people think about data and protection and security in a more holistic way,” Schwab said. “Data centers are utilizing immense amounts of power, particularly for AI workloads. They're saying the infrastructure across North America isn't there to support those needs. So we've seen our power business grow dramatically, and I think it's going to even be enhanced by a technology transition to lithium-ion batteries. That is going to allow organizations to really deploy more power for their own needs at scale and very efficiently. That eliminates the risk of being down and not being able to get IT systems running.”

The rest of 2024, however, won’t completely be smooth sailing. Channel partners still face headwinds from inflation, rising interest rates and potential geopolitical disruptions including the U.S. presidential election. Schwab said these can create spending pauses but also represent opportunities for MSPs.

“I look at it from two lenses,” he said. “The first lens is a more of a macro perspective. People want some more clarity before they set the budgets to invest in IT and other capital expenditures. But on the flip side, I look at the micro perspective. We know people costs are going up, our insurance is going up, freight costs are going up, everything in an organization is seeing inflationary impact. How do they become more productive? I am convinced the only way for an end-user organization to be more productive is through enhancing IT capabilities by leveraging the relationship with their MSP.”