For insights on how renewed spending could impact the channel, I turned to Dan Schwab, co-president of D&H Distributing.
With the end of the year at hand, expectations for 2017 abound. In addition to predictions on hot tech trends, economic forecasts are starting to emerge. On that front, there is good news. Many forecasts are upbeat. Take this one from The Wall Street Journal: “Businesses on the Cusp of Capital-Spending Rebound,” it said in early December.
If ever there were a headline that should prick up your ears, this may be the one. The accompanying story highlights several reasons why 2017 could be a banner year for business spending. Among them: new tax laws, rising stock prices and shifting corporate priorities. Whether you sell goods and services as a one-time transaction or as a recurring sale, this is good news.
For insights on how renewed spending could impact the channel, I turned to Dan Schwab. Schwab is the co-president of D&H Distributing. A friendly source of information and insight for more than a decade, Schwab always has something informative to say when we connect. I believe this is because D&H positions itself at the bleeding edge of technology and thinks long-term. Over the years, D&H has sold everything from record albums to housewares, appliances to security equipment, TV parts and even tires. (The company was founded in 1918 as “Economy Tire and Rubber” and made its name retreading tires.)
Today, D&H Distributing distributes information and communications technology (ICT) goods and services to VARs, MSPs, system integrators, system builders, college bookstores, home installers, video game dealers and more. Unlike broad-line distributors, the company offers a few, select options per category and devotes its energy to serving small agents and resellers.
Dan Schwab has been with the company since 1995. A techie at heart, Schwab anticipated the digitization of business processes and devices and has served as co-president, along with his brother Michael, since 2008. It had been a while since Dan and I spoke, but Schwab picked up right from where we left off.
Dan Schwab, Co-president, D&H Distributing
Foremost on his mind: D&H’s performance in 2016. Despite soft growth in PCs and servers industry-wide, D&H put up some impressive numbers in 2016 in key categories. Its IoT solutions business jumped 77 percent in 2016. Sales of cloud-based solutions including Microsoft’s Office 365 and Azure climbed 75 percent. And sales of 3D printing solutions soared 52 percent in the same period. Looking ahead to 2017, Schwab says there is excitement for IaaS, voice and more.
“I have optimism for 2017,” he says. His views are shaped, in part, on feedback from his company’s channel customers. “Generally speaking, there is more optimism today than there was 90 days ago.” And there is certainly more optimism than there was in early 2016 when the channel was navigating over a “bumpy road.”
In addition to an improved regulatory climate and more favorable tax rates, partners anticipate increased customer spending in 2017, he says. Unlike past years when spending hikes coincided with major technology upgrades, the new spending increase will likely be driven by use-cases that help customers grow revenue, reduce costs, increase worker productivity and improve customer experiences, among other things.
Schwab says his company’s sales to VARs grew 8 percent this year thanks to investments in education, training and cloud technology. He expects these to drive growth for D&H next year.
“Instead of a supermarket, we want to be a specialty store and provide a lot of hand-holding,” Schwab says, adding that things launched in 2016 such as free pre-sales support will pay big dividends in 2017.
Speaking of predictions, CompTIA released this week some preliminary findings from its forthcoming IT Industry Outlook for 2017 study. (The full version is due in January.) Among the early highlights from the trade association’s researchers: sector confidence remains in a holding pattern though trending upward slightly from a dip in the first half of 2016.
“Several years removed from the Great Recession, cautious optimism continues to be the predominant sentiment among IT industry executives heading into the new year,” CompTIA concludes. “A reasonably stable economy, a strong pipeline of new tech products and services, and customers eager to pursue digital business strategies contribute to the sense of optimism.”
In addition, CompTIA also expects the following will trend in 2017:
- More channel firms will pursue intellectual property development (custom code, proprietary business process, etc.) on their own
- The “channel” will continue to expand as more digital agencies, marketing firms, accountants and other non-traditional partners sell or recommend IT solutions to their customers
- Hyper-converged infrastructure, blockchain and artificial intelligence (AI) will expand into the enterprise before migrating down to SMB customers
- Workers will begin to embrace “Bring Your Own Collaboration” tools much the way they adopted BYOD a mere few years ago