Discouraging inflation numbers have Wall Street predicting yet another interest rate hike from the Federal Reserve, and 63% of economists predicting a recession as a result.
None of that appears to be worrying D&H, however. “We’ve got the gas pedal down,” says Peter DiMarco, the distributor’s senior vice president of commercial sales, in a conversation with ChannelPro during the company’s THREAD partner conference in Anaheim, Calif., today.
Indeed, in conjunction with the “built for growth” initiative the company announced a year ago, D&H has added some 200 salespeople, extended $400 million of credit to its partners, doubled the size of the Components and Gaming Business Unit it launched early last year, and beefed up its Modern Solutions, proAV, and other business units.
The company’s latest partner investment, announced during a meeting of its PartnerFi peer community at the THREAD conference site this week, is an outsourced marketing agency called TechDrive Creative Studios that helps partners design collateral, build websites, run lead generation campaigns, and more. According to DiMarco, the new program is aimed squarely at an age-old challenge for channel pros.
“They still struggle with marketing,” he says. “They’re just not skilled in it.”
Chris Daly, president and CEO of EBM Inc., an MSP and solution provider headquartered in Trumbull, Conn., agrees. Marketing is not only difficult and unfamiliar but expensive, he says, adding that TechDrive appears to offer a range of needed services at reasonable rates.
“We’re a small company,” Daly notes. “We don’t have a huge marketing budget, so it’s extremely helpful.”
Daly is also looking forward to leveraging another recently introduced resource from D&H, a self-serve portal called the Cisco Partner Experience designed to help partners track orders, quotes, warranties, and renewals without endless phone calls and emails. “It’s going to be a big, big help,” he predicts.
Modern Solutions
The Cisco Duo application D&H recently added to its cloud marketplace, which DiMarco says will be the first of many, is similarly designed to streamline operations for Cisco partners.
“A managed service provider doesn’t have to make a phone call to acquire and provision a Cisco Duo application,” DiMarco explains. “They can do it right from our marketplace and through a push button tool.”
The Modern Solutions Business Unit that D&H launched in May is responsible for that offering, plus the cloud marketplace it runs on. In June, it announced an agreement to sell “configure to order” infrastructure solutions based on Hewlett Packard Enterprise’s as-a-service GreenLake platform as well.
“We’re betting big on GreenLake,” says DiMarco, who expects the HPE product to hold strong appeal among bigger SMBs and smaller mid-market businesses. “My whole sales team will be trained on GreenLake, the entire market-facing and go-to-market team at D&H,” he notes. Integration with the cloud marketplace plus technical and sales training courses are also in development.
Daly is one of many partners investigating D&H’s GreenLake initiative in Anaheim this week. “There’s a fit for everybody from our size all the way up,” he says. “We will definitely be looking deeper into it.”
Attracting and enabling MSPs like EBM, which only recently became a D&H partner, is a high priority for the distributor’s leadership team. The company has been rolling out videos aimed at helping current and would-be managed service providers transition to recurring revenue business models through its Success Path training platform, hosting in-person workshops, and more in recent months.
PartnerFi, which debuted last December, focuses chiefly on MSPs too. Daly, who was recently invited to serve on the community’s advisory board, has found the knowledge sharing among members helpful. “They’re not even your competitors anymore,” he says. “They’re your partners and your peers and you can bounce things off of them.”
According to DiMarco, D&H is sharing knowledge of its own with Cisco, Lenovo, and other leading manufacturers eager to recruit MSP partners of their own.
“We’re doing a lot of education with the vendor community on how you market to MSPs,” he says. “They’re large entities. They’re not necessarily going to have the time or energy to go focus on MSPs at a very intimate level, and so that’s what we do.”
Upgrades Ahead
Though EBM is coming off of two record years, propelled by sales of work-from-home and then return-to-office technology, Daly is wary about 2023.
“I think this next year is going to be a tougher one,” he says, adding that customers worried about the looming prospect of a recession are beginning to spend more cautiously. “There’s just been hiring freezes and projects put on hold,” Daly notes. “I think people are starting to get a little nervous.”
D&H, on the other hand, is seeing no signs of an imminent slowdown. “Our business is growing 25% quarter over quarter, year on year,” DiMarco says. “We’ve had some months where we’ve seen upwards of 35% growth in the commercial space.” The company’s cloud business is up 110% year over year and approaching a million seats in market, he adds, while the professional services practice the company launched late in 2020 is up 103%.
Upgrades to endpoints and infrastructure deployed hastily two years ago account for some of that momentum, according to DiMarco. “It was all done to survive,” he says of 2020’s frenzied pandemic-fueled rollouts. “Many end customers, especially SMBs and mid-market, have said, ‘I now need to have a more strategic plan.'”
Recession anxieties are driving some businesses to buy more from D&H and its partners rather than less too, he adds. “If I’m not going to be able to hire as many people, the folks that I do have need to have productive assets, a network that works, be able to leverage 5G, be able to work from their phones,” DiMarco explains.
Fortunately, he continues, the supply chain logjams delaying some of those projects are beginning to ease. “We’ve seen some lifting in the last 30 to 45 days,” DiMarco says. “It’s definitely more predictable than where it was, say, a year ago.”
Daly is seeing improvement too, particularly on PC orders. “The lead time has been reduced to four to six weeks,” he says, noting that it was as high as 16 weeks in the past. “It’s getting better.”
TD SYNNEX recently reported progress on supply chain delays as well, not to mention continued sales of next-generation infrastructure solutions.
