D&H Canada posts 23 per cent sales growth in weak quarter for distribution generally

One interesting data point was a 220 per cent year over year increase in server revenues, when most distributors indicated that sales from Microsoft’s dropping support for Server 2003 had been disappointing.

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Greg Tobin, general manager at D&H Canada

SMB-focused distributor D&H Canada has reported startlingly good sales numbers in the first year of its Fiscal 2016, which ran from the beginning of May to the end of July.

“We saw 23 per cent growth in the first quarter, which was pretty staggering,” said Greg Tobin, general manager at D&H Canada. “It was also across almost all of our categories, not based on very strong performances from two or three.” Servers did stand out with 220% growth over the year, but monitors (67%), printers (62%), laptops and notebooks (33%), components (27%) and networking products also did very well.

“Our success also contrasts with distributors as a whole,” Tobin said, pointing out that data from marketing research firm The NPD Group indicated that two-tier distribution overall recorded a -1 per cent decline in July, and had a worse August, at -2 per cent.

The server numbers are particularly noteworthy, given that there are no obvious statistical gimmicks that would distort the numbers, like a very low starting point from a newer product. Other distributors have also gone on record indicating that the much-vaunted Microsoft Server 2003 end-of-lifeing had been something of a dud, with fewer customers than expected upgrading. Tobin said that one factor in D&H’s better performance was that their core client base appeared to respond very differently than that of the other distributors, who have a lot of partners who serve enterprise and mid-market companies as well as SMB.

“We did see a lot of growth and uplift from the Server 2003 end of support,” Tobin said. “It wasn’t big among larger customers because continuity of platform is important for them. But that’s not our market. We live at 19 seats and less. And SMBs buying applications were much more likely to conclude that since it is a brand new placement, why not go with the new product.”

Monitors also haven’t been thought of as a hot market, but Tobin said specific buying decisions were behind the surge.

“There has been a significant increase in two monitor applications on the desktop, as well as the upsizing of the monitor,” Tobin said. “Many are also used for marketing information now within company premises. We use five to provide employee information in our offices here.”

Tobin also believes sales have been consistently stimulated by D&H Canada’s policies, including a long-tenured sales team.

“Through eight years in Canada, we have seen double digit growth all the time,” he indicated. “I see value as equal to people plus product plus programs plus service plus reliability, and the average tenure of our sales team is 9.4 years.”

Still, some areas didn’t do well, and they will surprise few.

“The whole navigation business needs to do better,” he said, something that is unlikely since separate GPS products have had their market eroded by ones now built into cars by their manufacturers. “Point and shoot cameras have become something of a dinosaur. I would love to see more growth in the desktop space, but it is what it is. Last year was better for desktops with XP end of support. This year it has flattened right down, and is close to zero.” On the other hand, NPD reported the distribution average for desktops was -17 in July, so from that perspective close to zero isn’t too bad.

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