Slowdown? What Slowdown? D&H Says SMB Tech Spending Is Strong

The distributor’s SMB business is up 20% this year, according to Co-President Dan Schwab.

The Federal Reserve Bank of Atlanta expects U.S. GDP in the first quarter of the year to come in at 2.5% when it’s officially reported next week, which makes the modest 5.7% uptick in global IT outlays this year that IDC recently projected look comparatively vigorous.

And D&H Distributing? It’s forecast for the fiscal year that closes this month is…let’s just say better than that.

“Our SMB business is up 20% so far this year,” said Dan Schwab (pictured), the company’s co-president, in a conversation with Channelholic, adding that top-line revenue should come in north of $5.5 billion.

“We have a saying that we decline to participate in any economic downturn,” Schwab jokes.

It helps, he adds, that D&H sells chiefly to SMBs. Unlike big businesses, many of which overspent during and before the pandemic and are now cutting back in response, smaller businesses continue to spend on IT.

“SMBs historically play their cards much closer to their chest, so they didn’t have the same level of retrenching that enterprise has had,” Schwab says.

They’re ready, willing, and able to fund solutions in three especially hot areas too, he continues, beginning with conference room and collaboration upgrades for workforces splitting time between home and office.

“Whether it’s school districts, whether it’s municipal buildings, whether it’s doctor’s offices, they’re not retrofitted to have a good hybrid environment,” Schwab says.

After several years of devoting hardware budgets to laptops, headsets, and other work-from-home gear, businesses are catching up on deferred back office infrastructure refreshes as well, he adds, and security spending shows no sign of slowing either.

“Every CIO, every business owner, that’s the one thing that keeps them up at night,” Schwab says.

All three markets, moreover, are multi-year opportunities, he predicts. “That’s a long upgrade cycle that I think we’re going to see.”

Even sales of client devices, though way down at present, will start rebounding before long, according to Schwab. “It’s still a very robust market, and I think we’ll get back to an upgrade cycle very soon, probably the second half of this year,” he says.

In the meantime, D&H is staffing up to ensure it has enough headcount to continue providing the personalized attention that Schwab considers the distributor’s calling card. “That’s what I don’t think you see in this industry is literally a distributor rolling up their sleeves and going foxhole to foxhole with every partner, helping them build out business practices,” he says, noting that D&H has hired some 250 net new people in the last two years and over 50 just in the last six months.

“We literally have another, I think, 50 or 75 open reqs today,” Schwab says.

Though relatively few of its partners have been impacted by turmoil in the financial sector following the recent collapse of Silicon Valley Bank and others, D&H is augmenting credit lines this year as well. “We’re actually planning on adding $400 million of incremental downstream credit per month,” Schwab says.

That willingness to invest despite economic uncertainty is a large part of why former Tech Data sales executive Marty Bauerlein recently signed on as D&H’s new chief commercial officer.

“When you have the highest-level executives in the company vested in the success of the community and their people, it makes a massive difference,” he says. “For me, that was the big factor in me coming here.”

Schwab hopes to see partners do their part to sustain market momentum. “It doesn’t matter if U.S. GDP is up 2% or down 2%, if you’re an SMB reseller serving SMBs in your market your job is to add value,” he says. There are plenty of ways to do so right now, he observes, and you don’t have to do it alone.

ConnectWise bets that printers still matter

Compared to the cloud, printers are yesterday’s news. Per data from IDC this week, in fact, U.S. spending on single- and multi-function printers will decline at a -3.4% CAGR through 2027 to $9.2 billion.

Yet $9.2 billion will still buy you a whole lot of printers, and worldwide spending on managed print services will rise by close to $7 billion over the same time period, per Technavio.

Hence the agreement this week between ConnectWise and Sharp to collaborate on managed print, beginning with a managed print security service that feeds telemetry from Sharp printers straight to ConnectWise’s SIEM service.

"Businesses often overlook MFP and printer security, but just like a PC, they can serve as on-ramps to your network and valuable business information," said Vince Jannelli, associate vice president of software product management for Sharp Imaging and Information Company of America, in a media statement. Hard to argue.

Economy down, cloud up

A global study of organizations with over 100 employees from Aryaka this week backs up D&H’s upbeat outlook on IT spending. Fully 98% of businesses plan to increase their investment in cloud services, the research shows. More interestingly, though, that’s not despite the shaky economy but because of it.

Indeed, 47% of survey respondents said economic conditions have led them to accelerate their adoption of cloud infrastructure and services. Another 28% said they’re focusing adoption on a smaller set of cloud solutions to save money, but only 19% said they’re actually slowing adoption in response to the weakened economy.

Such numbers point to a welcome fact of life for IT providers: most businesses will happily boost spending in tough times on products and services that make them more efficient, and that’s what IT’s all about.

Don’t forget disposal

Here’s another fact of tech life worth remembering: IT assets have a lifecycle that extends from purchase all the way to disposal.

ESET posted a helpful reminder this week. Over 56% of the used routers its researchers recently bought still had configuration details and data from the former owner on them. “In the wrong hands, the data gleaned from the devices—including customer data, router-to-router authentication keys, application lists, and much more—is enough to launch a cyberattack,” the company notes.

Yup. Including secure, responsible device disposal with your services is one more way to add value for your clients, and maybe differentiate yourself through your diligence to boot. Heck, you could even make a little money along the way.

Also worth noting

• Barracuda has new subscription plans combining web application, API, DDoS, and bot protection.

• Spin.AI has some new offerings for SaaS ransomware detection and response, security posture management, and DLP.

• Zomentum’s new Smart AI-writer can write your sales proposals for you.

• Google is getting into cloud consulting.

• Trustifi’s email encryption solution now comes with multitenant management.