D&H Posts 102 Percent Growth In Cloud Services, Modern Applications

‘Our partners made a quantum leap in transforming their businesses in 2022,’ says D&H Co-President Michael Schwab. ‘We clearly put in place the tremendous resources needed to help our SMB reseller community migrate to the modern applications which is where we are seeing growth.’

D&H Distributing reported 102 percent growth in cloud services and modern applications in 2022 fueled by the launch of its new Moderns Solutions Business unit.

The Modern Solutions Business unit– which represents a landmark shift in the D&H go to market model- overall reported a 39 percent increase in sales with 66 percent growth in integration services; 46 percent growth in Cisco products and 25 percent growth in modern infrastructure.

The Modern Solutions Business success comes with D&H’s commercial sales up double-digits in 2022, bringing annual sales to nearly $6 billion.

With the Modern Solutions Business – which was launched last May- D&H has moved from dedicated vendor sales specialists to a multivendor everything-as-a-service business backed up a bevy of new technical talent. That shift, which represents the distributor’s biggest go to market investment in over a decade, also helped propel a whopping 264 percent growth in D&H’s managed services offering under its professional services banner.

[Related: D&H Creates New Modern Business Unit To Accelerate Everything-as-a-Service Sales]

The Modern Solutions Business also drove 216 percent growth in project services which extends the reach of partners across with D&H affiliated services.

“Our partners made a quantum leap in transforming their businesses in 2022,” said D&H Co-President Michael Schwab. “We clearly put in place the tremendous resources needed to help our SMB reseller community migrate to the modern applications which is where we are seeing growth. What we have done is allow our broad base of partners to change as the model has evolved to as a service. This is all aligned with our Modern Solutions Business initiative.”

The post pandemic hybrid workforce model also was an impetus for many businesses to replace aging office infrastructure, said Schwab. “We saw partners replacing old desktops and backoffice equipment to support video collaboration,” he said. “You really needed to upgrade all of that equipment to make it compelling for workers to be back in the office.”

Providing Transformationl Technologies To Partners

The Modern Solutions Business has powered growth in modern infrastructure, security and collaboration across a wide swath of vendors like Cisco, Microsoft and Logitech, said Schwab. “The technologies we are providing in the Modern Solutions Business are transformational,” he said. “We are providing the training and resources to help our reseller community move to capture the as a service opportunity.”

The Modern Solutions Business unit has driven sharp increases in D&H partner cloud consumption including 133 percent growth in Microsoft Azure; 109 percent growth in Microsoft Modern Workplace; and 91 percent growth in Microsoft Security.

D&H Co President Dan Schwab said 2022 was the year partners helped SMB customers migrate to the new hybrid workforce model with D&H Modern Solutions Business offerings.

“The hybrid workforce drove the tremendous need for modern applications and cloud services,” he said. “We saw partners offering modern collaboration, redoing conference rooms and training end users on how to securely collaborate both in the office and remote.”

D&H helped Data Center Warehouse, a national end to end solution provider, No. 30 on the 2022 CRN Fast Growth 150, drive overall sales growth of 35 percent in 2022 with a more than doubling of its cloud sales, said Dan Parris, co-founder and executive vice president of Data Center Warehouse.

“D&H’s cloud marketplace portal, which we and our customers use, is world class, it trumps every other distributor by light years,” said Parris. “It is simple to use and easy for customers to use. Sometimes bigger isn’t always better. There are some convoluted and outdated tools out there.”

With D&H’s dedicated cloud technology technical talent, the Data Center Warehouse engineers have “one throat to choke, one person they call for support on the cloud with very fast response from D&H,” said Parris, a member of D&H’s Partnerfi community. “D&H is like a true extension of our own company with our own Microsoft cloud specialist dedicated to Data Center Warehouse’s cloud growth. It’s a partnership. We have the customers. They have the expertise and knowledge. When you put the two together good things happen.”

Parris attributed the strength of the partnership to the fact that the two companies have similar cultures. “We have the same culture as D&H,” he said.”It is family oriented and relationship focused. That is how we deal with our customers too. So the model works from distribution to us and then to our customers.”

Doubling Down On Microsoft Azure Cloud Business

Data Center Warehouse is doubling down on growing its Microsoft Azure cloud business with D&H this year, extending into other Microsoft products and services including security, “Microsoft is the 800 pound gorilla in the playground,” he said. “It’s a great business with recurring revenue and strong attach rates.”

Security continues to be a big driver for partners bringing modern solutions to market, said Dan Schwab. “As big as security was in 2021 it was bigger in 2022,” he said. “When it comes to cybersecurity even businesses that said they don’t have an IT budget doubled down on security. The security budget is almost unlimited. Security is the one thing that keeps CEOs and CIOs up at night.”

A drive to make workers more productive in the new hybrid workplace drove a 307 percent increase in D&H’s Modern Collaboration business in 2022 with growth from Microsoft Teams, Cisco Webex and Zoom, said Dan Schwab. “That led to a refresh in server and networks and displays for video calls,” he said “

With rising inflation and freight costs going up, more partners are relying on D&H to reduce costs for critical services like integration services, shipping products directly to customers, said Dan Schwab. “A lot of partners from the largest to the smallest are having us do integration services for them because it is more cost effective,” he said. “So instead of us shipping products to partners where it sits in their warehouse, we are now turning the inventory faster by shipping to customers.”

D&H doubled down on helping partners cut costs in the wake of the shifting macro economic environment in 2022, said Schwab. “We looked at the rising interest rates, freight costs and payrolls and made sure we were helping our partners navigate that environment,” he said. “We were looking at anything and everything we could do to help our partners save money.”

One of the star vendors in the D&H lineup was Cisco which was a central part of the Modern Solutions Business Unit with Cisco security offerings driving robust growth including Secure Endpoint, Stealthwatch, Secure Email Threat Defense, Duo authentication and Meraki wireless. “Cisco has become one of the foundational pieces of the new hybrid workforce,” said Dan Schwab.

D&H’s strong sales enablement offerings, account support, technical training, proactive sales outreach and flexible credit terms have played a critical role in helping drive “exponential” sales growth in the Cisco portfolio for Micro Works Technology Solutions, a nationwide technology provider focused on cybersecurity, compute and network solutions, said Carrie Wieland , director of sales for Micro Works Technology Solutions.

Providing Flexible Credit Terms To Help Partners Close Big Deals

D&H has stepped in with flexible credit terms to help drive a number of big deals forward, said Wieland. “They are very willing to think outside the box and work with us,” she said. “That type of relationship goes a long way.”

D&H’s sales enablement tools have been big time savers particularly the Cisco Partner Enablement (CPE) tool which has helped Micro Works navigate the supply chain crisis with status updates and special pricing, said Wieland. “That tool has been really helpful to have that view of ship dates with what is going on with the supply chain,” she said. “The supply chain right now is one of the worst situations we have ever seen.”

D&H has also stepped in with a Cisco Refresh program that has provided Micro Works Technology Solutions with fully certified remanufactured products from Cisco, said Wieland. “That has allowed us to provide factory refurbished equipment from Cisco with a full warranty,” she said.

In addition, D&H has also played a critical role in making sure that Micro Works Technology Solutions engineers are up to date on the latest Cisco certifications, said Wieland.

“D&H has been an excellent advisor on our Cisco business, helping us with our Cisco training and certifications,” she said. “They have made sure our engineers are up to date, taking advantage of the best certifications from Cisco.”

D&H has long term strong account reps and very responsive top management, said Wieland. “We have an excellent relationship with D&H,” she said. “Sometimes with certain distributors and manufacturers you have to chase people. I am never chasing D&H. They are always coming proactively to me. They are really on top of it. They have very strong communication.”

Wieland said she is optimistic about working hand in hand to grow the business in the future with D&H. “We have every intention of continuing to grow this year and in the future with D&H,” she said.”They have been very instrumental in helping us succeed and grow.”

Wieland said 2022 was a strong growth year and is hopeful about the prospects for 2023. “I am very hopeful,” she said. “I hope the market will be as good to us as it was in 2022. but I don’t know yet. There are lot of unknowns. Every one is talking recession. Inflation is out of control. We have not seen that impact us yet. So far it is shaping up to be a good year. I am very cautious. But I am an eternal optimist so I am hopeful.”

Data Center Warehouse’s Parris, for his part, said he is optimistic about the ability to continue to grow the business by working hand in hand with D&H. “We are excited to see how this continues to develop,” he said. “They are expanding and growing their offerings and practices which we are going to take advantage of to bring forward to our customer base.”