Wireless a Strategic Play for Distributor D&H

There were few products explicitly designed for SMBs (small and midsize businesses) that couldn't afford enterprise wireless technology or effectively apply consumer devices to their business needs.

But as wireless equipment makers join other IT vendors in their focus on the SMB market, this is no longer the case.

No one is happier about this change in landscape than the folks who run D&H Distributing Co., of Harrisburg, Pa.

D&H, an 87-year-old, family-run distributor, is an early entrant in the SMB wireless technology market, anticipating the need for wireless connectivity would explode sooner or later.

D&H carries some of the most popular devices, including Linskys (now Cisco Corp.) and D-Link Corp. wireless connectivity devices.

"We got into this early, before there were even standards," said Michael Schwab, the distributor's vice president of purchasing. "Now we're seeing wireless solutions coming from all different angles."

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And more solutions will come as wireless deployments, be they small Wi-Fi nets contained within buildings or large-area WiMax broadband networks, get under way.

This year, total U.S. spending on wireless communications will increase by 9.3 percent to a total of $158.6 billion, according to the Telecommunications Industry Association.

The wireless market will grow at a 10 percent compound annual growth rate from this year to 2008, when it will reach $212.5 billion, the association predicts.

D&H, said Schwab, is poised to take advantage of the projected growth in the wireless market as SMB companies get into the act and large organizations, particularly college campuses and schools, continue to deploy wireless networks.

For resellers, particularly networking VARs, these numbers add up to a big opportunity. It's no wonder that, according to Schwab, 85 percent of networking resellers that do business with D&H "are buying some sort of wireless solution." Five years ago, he said, the number was less than 20 percent.

One of those VARs is Hopkington, Mass.-based MicroNet Associates Inc., an Intel Inc. Premier partner, Microsoft Certified Partner and D&H customer.

MicroNet gets about 15 percent of its $7 million revenue from wireless business, including sales of wireless notebooks and other devices, but primarily network deployments in new schools.

"Our main market segment is K-12, and we do wireless for new school construction," said Mike Carbone, vice president at MicroNet Associates.

"We see more commitment to wireless solutions being planned, as opposed to being added as an afterthought."

Schwab is banking on that change of attitude among planners also taking place in the SMB space, where he believes wireless is ripe for growth.

"We're looking at bringing more enterprise-class solutions to SMBs," Schwab said.

D&H's most recent addition to its wireless line card was Xirrus Inc.'s Wireless LAN Array, which provides gigabit-class capacity and incorporates up to 16 access points in a single device.

The device has channels that operate at different frequencies, which means it can be set up in areas requiring overlapping access points without causing interference.

Schwab said he sees applications for the Xirrus product in warehouse settings, office buildings and college campuses.

Because of the technology built into the product, it is possible to use it in a building where a company has only a couple of floors and needs to limit access to those floors, he said.

For resellers, being able to sell and service the Xirrus product and other wireless solutions will require training, Schwab said. But as resellers become familiar with the technology, Schwab said he expects healthy growth in selling wireless solutions.

Wireless will become ingrained in the lives of technology users. "People want to access their data all the time. That's a given," Schwab said.

But there is a "brake pedal" that could slow down use of wireless, Schwab said. That brake pedal is "form and functionality."

For instance, with a BlackBerry, "you can respond to an e-mail, but you're not typing a whole letter," he said.

MicroNet Associates' Carbone, too, expects wireless to continue growing. But wireless, he said, will not replace hardwired devices altogether.

Rather, users will move in a mixed environment in which, depending on the device, they will either use a wireless or hard-wired connection.

Desktop machines and servers, for example, will remain hardwired because it would make little sense from a practical or cost-effectiveness standpoint do go wireless, he said.