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D&H Canada moves to new facility, but doesn’t plan to stay long

SMB distributor outgrew its old facility in two years because of whopping growth

MISSISSAUGA, ONT. – D&H Canada has officially moved into a brand new 45,000 square-foot distribution facility that is eco-friendly. But the plan is to move again in three to five years as the distributor grows in the market.

The Canadian subsidiary witnessed 212 per cent growth from year one to year two. D&H Canada general manager Greg Tobin forecasts 45 per cent growth for next year, and he says that estimate is conservative.

The new facility is only 25 per cent larger than the older building and enhances the distributor’s business by doubling the amount of bay doors, increasing capacity and improving lighting. It will help the company process inbound receipts faster and get orders done by 5:30 P.M.

”We looked for a good footprint and we can cube out this building and also maximize the cubic content of storage which will lower our costs,” Tobin said.

Currently several racks at the new facility are empty, but in a year’s time Tobin said they will be full and the subsidiary will once again have to deal with breadth and depth product factor. “It makes you consider how long this facility will be viable, which we think will be in three-to-five years,” Tobin said.

Expanding to a even larger facility today was out of the question because that would incur more operational costs that would supplant any longer term benefits, Tobin added.

D&H CEO Michael Schwab, who was present at the open house, said he was excited at the growth of the Canadian subsidiary.

”For D&H, I think this expansion means we now have the ability to stay the course in Canada. Canada is very synergistic with D&H’s SMB plans, which is our core, and it’s a big part of what Canada is. The country has a more dominant position in SMB resellers than in the U.S. and that creates, not an unlimited, but a vast opportunity for the sales organization to proliferate. It also gets the D&H message out to the channel,” Schwab said.

Despite the recession, D&H expects to grow both the U.S. and Canadian markets for a few reasons. Schwab said that the release of Windows 7 by Microsoft will lead to a huge upgrade business opportunity for the channel

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“If Microsoft did not force the major OEMs to install Vista they would not have used Vista. That software didn’t cause a refresh in the hardware. There’s also no model from going from XP to Windows 7, so if you have a three-to-five-year-old PC in the market place they will have to look at new hardware now. That will mean upgrades in storage and in memory,” Schwab said.

Schwab said that while the recession may have led to layoffs; those laid-off workers have turned into a mini-SMB customer base that D&H’s channel base wants to take advantage of.

Tobin citied recent Stats Can employment figures said there was a jump in self-employment. “We are seeing a lot of start-up businesses in Canada in the last two months,” he said.

Law firms, for example, have cut many people and these new self-employed lawyers will be purchasing notebooks, VPNs, and wireless so that they can look like a big firm, Schwab said.

Also, D&H wants to grow by offering products that are not readily available elsewhere, such as the Flip video camera. The Flip was developed by Pure Digital, which was acquired by Cisco Systems. That deal closed last week. Schwab said new products such as the Flip create new opportunities for D&H’s VAR partners because it’s not sold a lot in Canada.

Mark Schuster, vice-president of sales for Pure Digital Inc., was on hand for the open house and he said that the Flip camera is not just a consumer play. Schuster said Flip does well in the VAR channel as part of a solution for real estate companies, insurance companies and in education.

”The Flip is calling card,” Schwab said. “It is a reason to have a conversation with us and we’ll sell everything they can ship to us. I think Cisco buying them for all that money is a brilliant move and it’s not just a consumer play. It’s well positioned for the small business interested in video content for the Web. That will be a huge opportunity and Cisco will take that to a whole new level,” he added.

For D&H, having the Flip will mean more business in storage and in back up technology, Tobin said.

The Flip isn’t the only new product on display at D&H’s open house event. TalkSwitch of Ottawa presented to the invited resellers. TalkSwitch is a phone system that includes phones and software applications specifically for the SMB.

Lina Paerez, manager, business development for TalkSwitch, said the TalkSwitch solution has been build for small budgets. It’s ideal for companies of 20 people, but it can go up to 64 users and the total costs would be around a $1,000.

Schwab said the company had TalkSwitch in the U.S. and that it was a natural to include them in D&H Canada. “This whole integration of Voice over IP in networking is just in its infancy and Cisco is headed down that path, but TalkSwitch is already there,” he said.