D&H Distributing Moves to Help Channel Partners Bring In Recurring Revenue

D&H 2019 TECHNOLOGY CONFERENCE: MID-ATLANTIC — For decades, D&H Distributing has been helping its IT channel partners make one-time sales on hardware, software and consulting services on a wide range of products. Now, D&H is creating a new initiative to help its channel partners look for new ways to bring in recurring revenue, by branching into managed services and other cloud services that could raise revenue for participating partners.

D&H Distributing’s Michael Schwab

“There are unique opportunities for resellers and VARs to expand their business practices,” Michael Schwab, co-president of D&H, told Channel Futures here at the company’s summer partner conference, held in Hershey, Pennsylvania. “At this point in time, ‘as-a-service’ MSP support is gaining traction, but it is difficult for partners to comprehend without additional resources put forth on their behalf by companies like D&H.”

To assist their partners in making that leap, D&H has been bulking up its staff to provide new services, advice, strategies and assistance for its partners as they navigate these fledgling opportunities, said Schwab. So far, D&H has hired eight additional salespeople to work with partners on understanding services best practices, learning how to sell in the as-a-service world. It’s brought in other senior leaders to help in this area as well, he said.

“It’s not always the case that partners can expand naturally beyond what they already do,” he said. “For partners, there [are] always business opportunities for them to replace products for customers and there are opportunities to deploy new technologies and services,” but by bringing in as-a-service offerings, partners will have more opportunities for sustained growth.

“We see this opportunity as transitional,” said Schwab. “It’s our role to help our resellers and VARs understand how they can become an MSP and build a practice around recurring revenue. That’s not easy for the partners because their whole business model – their sales mission – has always been about making a sale in a moment in time.”

Among the training that will be provided are procedures on how to pay salespeople based on making services sales, compared to older formulas that paid them for hardware sales. Also planned are lessons in creating sales platforms that offer easy and consistent experiences for users, he said.

“The key to that is to help create a single point of consumption for all the various hardware and software services,” said Schwab. “We want to take a lot of the pain points out of the strategy instead of leaving partners to have to deal with multiple vendors. We want to provide a single point of contact for the channel to get this help to their customers.”

What Customers Are Talking About in IT Today

Schwab also shared his thoughts about what D&H is hearing about from customers on a wide range of topics.

“The primary opportunity we are hearing about from customers is security,” he said. “It’s the defining point for a reseller to continue to add value for their end customer.”

And interestingly, end users also are seeking help with older topics like collaboration technologies and with digital signage for their operations, added Schwab. The newfound interest in collaboration help comes because employees inside businesses of all sizes often are feeling the pressure of information overload and are seeking ways of better reviewing hundreds of emails, text messages and other communications daily, he said.

“People feel they have no more time to give, so we have to increase their productivity,” he said. “It’s where collaboration comes back to top of mind. People collaborate today from office to office and around the world and are still searching for ways to make it all work.

“The reality is that …

… such technology used to only be available at the enterprise level and is now readily available at every level of SMB, even in vertical markets,” said Schwab. “The problem is that SMBs are getting busier and need to find ways of solving the collaboration problems they have. We are hearing that from customers.”

In addition, video, which formerly was the responsibility of audio visual staffers, is increasingly dependent on IT and computers to operate, making it part of the IT department’s responsibilities instead of a standalone A/V department.

“The video today is so IT-reliant that resellers have opportunities to participate in those technologies,” he said. “I see that as an impetus for them to broaden their relationships with their customers to provide best-in-class AV solutions. We think it’s our role to help with that.

Overall, the biggest industry need that Schwab sees is for SMB resellers to become better marketers for their own offerings to end users, according to Schwab.

“We are working on things to help them take better advantage of the experience of D&H and to help with getting their messages out, to help them create content and best practices.”

In September, D&H plans to open its under-construction new headquarters in Harrisburg, Pennsylvania, where an all-new innovation lab, training room and marketing training facilities are being created to help the company’s partners.

“This is all going to be in it and there is more to come,” said Schwab.

D&H Distributing recently posted strong financial results for fiscal year 2019. Revenue for the year grew 17% over fiscal 2018. Sales in key categories did even better. Cloud solutions sales jumped 107% year over year, while network security sales climbed 77%.

In 2018, D&H celebrated its 100th year in business.