D&H Distributing has closed its books for fiscal 2019, which began May 1, 2018, and the distributor’s Canadian organization once again posted strong growth, with the subsidiary’s business up 14 percent overall.
The company has spent much of the last year reinforcing and retrenching its position as an SMB-focused distie, and those efforts showed impressive results, with the company’s VAR business growing at “nearly” 29 percent over the fiscal year. Roy Rivers, vice president of sales at D&H Canada, said the majority of that growth in the VAR community — between 80 and 85 percent — has been from existing customers, not surprising given the distributor is hardly new to the Canadian market anymore. However, attracting new solutions providers, particularly those who are now small but may be the next generation of major VARs in this country, remains a priority.
“As we get more visibility, and as they’re out there looking for alternatives, they’re turning to us,” Rivers said. “That’s important to us, and it’s a real positive metric for us. It’s very important to our vendors as well.”
Rivers said that with the growth in the VAR business, that segment now represents about half of the distributor’s business in Canada — the rest is retail/e-tail and DMRs. Rivers attributed that continued VAR growth to its high-touch approach and providing service where other distributors are either not engaged or are moving back. The distributor often mentions its growth in the Quebec market as one example of such a move.
Among technology areas, the distributor reported year-over-year growth of:
- 74 percent in consumer electronics;
- 26 percent in PCs;
- 23.7 percent in networking;
- 20 percent in video gaming and eSports;
- 19.4 in PC accessories; and
- Ten percent in server products.
Rivers said while it’s not a surprise, the figures help establish that, once again, the death of the PC is not anytime soon. And it’s an area D&H expects to see increasing in its newly-begun fiscal year as well, powered by the end-of-life deadline for Microsoft Windows 7 slated for January of next year. Rivers said to expect an “arm-in-arm” concerted effort with its PC vendor partners to take advantage of that refresh opportunity.
D&H is also calling out video gaming as a significant growth opportunity. Gaming has always driven above-average revenues for “gamer” PCs and other gear, but Rivers said that with the rise of eSports, there might be more opportunity than before for VARs in this space. Along with high-performance gaming rigs themselves, eSports “arenas” demand high-performance (and low-latency) networking. That’s territory familiar to solution providers, and for those who can make the transition and treat eSports almost as a vertical of focus, it could represent an opportunity soon. It’s an area where Canada may be lagging the explosive growth we’ve seen in other parts of the world, but one where Rivers said D&H would focus on adding value.
The distributor said to expect more of the same – a focus on high touch and more effort for the SMB-facing VAR – over the next year. Rivers called out more solutions focus on networking and security as a likely area of focus, and Rivers suggested that over the next year, D&H will a series of managed services in Canada.
“It’s another way we’re going to augment [VAR’s] capabilities and help enhance their profitability; offering managed services that they can white-label, and with competitive pricing out in the marketplace,” Rivers said.
VARs, he said, have done a good job of building their services capabilities over the last decade, but hinted that there are “limitations in terms of how much they can do. The program will start with assessment services and then move into deployment in what Rivers described as “a suite” of managed services.