CRN Exclusive: D&H Adds Azure To Cloud Marketplace In Push To Quintuple Number Of VARs On Platform

D&H Distributing has added Microsoft Azure to its cloud marketplace as the distributor looks to increase the number of channel partners on its platform from 300 today to 1,500 or 2,000 a year from now.

The Harrisburg, Pa.-based distributor said it plans to leverage Azure to address SMB-specific backup and disaster recovery needs, as well as build an offering within the Infrastructure-as-a-Service tool that provides VARs with the same functionality as Microsoft's legacy small business server, according to Peter DiMarco, D&H's vice president of VAR sales.

The announcement comes weeks after distribution competitor Tech Data launched its own pre-configured small-business cloud server for Microsoft Azure. DiMarco said the Tech Data launch validates the concept, and that D&H looks to differentiate itself in the cloud through the level of education and support it provides to partners.

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The distributor takes a concierge-style approach toward training and enablement, DiMarco said, and sometimes spends 45 to 90 minutes on the phone with channel partners, holding their hands through the cloud on-boarding process.

"They're so resource-strapped, they need help," DiMarco told CRN during the Mid-Atlantic Summer Technology Trade Show in Hershey, Pa. "The more we help them on the front end, the more we're going to share in the rewards down the road."

D&H plans to create a combined on-premise and cloud turnkey offering to address the backup and disaster recovery space, DiMarco said. The distributor plans to bundle Microsoft Azure with Hewlett Packard Enterprise or Lenovo hardware to create a hybrid offering that enables VARs to easily move workloads to and from the cloud, according to DiMarco.

D&H will be focused for the remainder of the year on educating its partners around Azure, DiMarco said. The distributor is actively working to onboard an additional 1,000 partners to its cloud marketplace, which launched in November 2016 with support around Microsoft Office 365.

Office 365 usage is growing in the mid-double digits, DiMarco said, while Azure usage is enjoying low triple-digit growth rates since it's a newer product.

More than 500 of D&H's 4,000 to 5,000 VAR partners are waiting for the distributor to launch a cloud agent model, under which D&H will bill customers on behalf of its channel partners, DiMarco said. The agent model is intended for solution providers that have no interest in billing, buying or selling a cloud services catalog, but still wish to make money in the cloud.

Under this model, DiMarco said D&H will manage the transaction on behalf of channel partners and pay them a referral fee equivalent to a certain percentage of the eventual cloud transaction. Ingram Micro launched a cloud agent program and saw it gain significant traction among cloud partners, the distributor told CRN, while Tech Data debuted an agent program of its own earlier this year.

All told, DiMarco said D&H expects to be supporting 10,000 to 15,000 end user seats in the cloud within the next couple of quarters. DiMarco sees Office 365 as a bridge to the cloud for legacy food service providers or small manufacturing shops, who in turn become increasingly comfortable migrating a file server or using Azure for backup after their positive experience with Office 365.

Security is already built into Azure workloads, DiMarco said, which makes it easier to protect and defend than an on-premise box. The best opportunity for cloud adoption is among end users with 25 to 100 seats, DiMarco said, while organizations with less than 25 seats might use cloud for basic services, but won't be highly dependent on it.

The earliest cloud adopters within D&H's solution provider community have been managed service providers supporting customers with between 10 and 100 seats, DiMarco said. These channel partners see the combination of cloud and managed services as a way to continue growing and building new business.

"They're sort of growing up before our eyes," DiMarco said.

D&H's cloud marketplace enhancements will make it easier for VARs to compete and win around services best delivered and managed in the cloud, including domain-based, archiving, mobility, and data migration services. This should help VARs become less dependent on traditional, hardware-based, break/fix opportunities, DiMarco said, while better addressing the needs of the modern workplace.

In addition to Azure, D&H's cloud marketplace is now equipped to support BitTitan, Dropsuite, PlumChoice, Enom and SpamFilters, according to the distributor.

Computer Visionaries Inc. recently began using D&H's tools to manage its Office 365 clients, according to owner David Flaim.

Before switching to D&H, the Pittston, Pa.-based company relied on an open license for Office 365, which Flaim said typically meant that there was a one- or two-day delay when setting up new accounts. But by going through D&H, Computer Visionaries can set up a new user account in just 10 minutes.

In addition, Flaim said the D&H program makes it easy for resellers to adjust the number of Office 365 licenses held by the end customer if their staffing levels fluctuate by season.

KM Computers has found that D&H's cloud marketplace allows for easier management of clients, according to owner Keith Miller. The marketplace, for instance, doesn't require the end user to pay using a credit card, which Miller said would be convenient since some of his clients are credit unions that don't operate with credit cards.

"It's a lot easier for me," Miller said. "I get a bill from D&H every month, and I just send it through."

Miller estimated that roughly half of the Jeannette, Pa.-based solution provider's customers would be interested in moving workloads to the public cloud, with their interest typically stemming from things they've been reading in the general media.

D&H's cloud agent program, meanwhile, would be a good fit for a couple of customers that engage with KM Computers on a more limited basis. Miller said he'd prefer to support these customers without having to handle their occasional billing needs himself.