Exclusive: D&H Sees Double-Digit Growth For FY 2014, Driven By XP Expiration

D&H Distributing has seen double-digit growth in its SMB business as it closes out its 2014 fiscal year, driven in large part by its efforts to boost business for its resellers around the XP expiration, the distributor said Wednesday in its earnings report, released exclusively to CRN.

The Harrisburg, Pa.-based distributor has seen 20 percent growth in sales of small to midsize business solutions since January 2014, and showed double-digit growth for the fiscal year, which ended April 30. D&H is a private company, so it does not have to disclose all of its growth numbers.

It is the fifteenth year that the company has averaged double-digit growth, D&H Co-President Dan Schwab said, centered around the company's focus on the small business.

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"What's really exciting [is the] core of our business is SMB, and really in the last six months or so, it's clearly accelerated," Schwab said. "We're anticipating this to continue into our next fiscal [year]."

The growth was driven by the upgrade cycle happening in small businesses and schools. In particular, the distributor saw a huge boost in growth for its reseller clients as a direct result of the Microsoft XP expiration at the beginning of April, Schwab said.

"We took a leadership role in educating our partners in the XP end of support and the opportunities it created," Schwab said. "It really was a full yearlong effort. Our resellers are still harvesting those opportunities."

NEXT: Across-The-Board Technology Refresh

The upgrade hasn't been limited to just core categories such as desktops and notebooks, Schwab said, but is really helping ignite an across-the-board technology refresh for small business end users. He said that D&H has seen "tremendous growth" in those core categories, as well as growth in storage, security, network technologies and more as a direct result of the XP expiration.

"What's exciting to us is that we're seeing it across the board," Schwab said. "We're seeing a really healthy mix of technologies."

D&H has been working to push forward that broad refresh through marketing support to its resellers to help them communicate and create demand for the entire portfolio of solutions.

While the April 8 deadline itself has passed, Schwab said that he expects for the refresh boost to continue through the year as small businesses continue to upgrade their systems and resellers work to refresh not only the front-office but the back-office solutions as well.

"The wave has already hit us and we expect to be able for our resellers to take advantage of that wave balance of 2014," Schwab said.

In particular, Schwab said that the XP expiration has driven growth in K-12, combined with growth driven by Common Core Standards and the ConnectED initiative.

"Not only are they driving technology in schools but at the same time this XP end-of-life support, which is happening in small business today, is identical in the school districts. Many school districts are still running on XP machines. It invites the same conversation in the schools," Schwab said.

The exciting part of the XP expiration in K-12 is that it is driving growth across the product spectrum, Schwab said. D&H is seeing K-12 growth in notebooks, desktops and tablets, he said, including both Chromebooks and Microsoft products. Similar to small businesses across the board, Schwab said that the technology refresh is not just for the front office, but D&H also is seeing resellers refresh client networks, security, storage and more.

Schwab said that he doesn't expect the growth to taper any time soon.

"We think it's multiple quarters more," he said.

Going forward, D&H is anticipating double-digit growth of up to 20 percent to continue for fiscal year 2015 in technologies across the board.

PUBLISHED MAY 7, 2014