Samsung looks to scale enterprise peak

The world's biggest tech firm is rarely mentioned among the channel's top enterprise vendors. But it intends to rectify that, and we examine its chances of success

It has been more than four years since Samsung surpassed HP to become the world's largest technology company. During that time the Korean vendor has built a commanding lead in the mobile phone market, while establishing itself as Apple's first real challenger of note in the tablet sphere.

With a technology portfolio that spans from televisions and fridges to business phone systems and CCTV cameras (and a wider operation covering industries including shipbuilding and life insurance), there is a high likelihood that you come into regular contact with a Samsung product of some description.

Despite its ubiquity, Samsung's name is often conspicuous by its absence in the enterprise IT channel. But the vendor has big plans to try to replicate some of its consumer success in the B2B world, and the launch of a global channel scheme (see opposite page) forms part of a plot to woo far greater numbers of resellers to push its products into the commercial sphere.

Graham Long, vice president of Samsung's UK and Ireland Enterprise Business Team, claimed that the manufacturer's drive into the B2B market "has really been going on for the past 12 to 18 months". He claimed that savvy resellers will have kept close tabs on its huge consumer success and will be eager to ensure they are keeping pace with its planned growth into the commercial and public sector world.

"From a technology perspective, they are now looking at it and seeing the same thing we are: that there is an incredible appetite to engage with Samsung. All resellers are constantly looking to make sure that their business is ahead of the market," said Long.

VAR view
Robert Rutherford, managing director at VAR QuoStar, claimed that computing trends in the consumer and commercial worlds are becoming increasingly linked, which could prove beneficial to Samsung's aspirations.

"The iPad is completely useless for business, but it spread like wildfire through enterprises just because of the brand," he said. "The direction of the consumer and enterprise markets have become interwoven."

Anthony Miller, managing partner of TechMarketView, urged Samsung to focus on building on what it is good at, and not try to go toe to toe with the IT market's infrastructure giants.

"The whole enterprise world is driven by software, and Samsung simply is not there," he explained. "I can only see Samsung playing in the end-user [computing] space - but that is still a great place to play, and I would encourage them to do that. There is enough of a rat race in the datacentre."

Howard Hall, managing director of VAR DTP Group, agreed that Samsung's strength lies in making client devices, but argued that its lack of a wider enterprise offering will hurt its progress in the B2B world.

"They are very good in B2C, because they are good at building devices," he said. "But we do not need a device-based strategy; moving into the enterprise space, it is all about building solutions."

Application form
However much Samsung builds its reputation as a purveyor of enterprise-grade tin, businesses ultimately run on software. The software and applications strategy of Samsung and its software partners will surely have a big say in the extent of its success in cracking the commercial market.

Anil Davé, senior software development manager at online phone retailer e2save, claimed that "Samsung must deliver true software innovation to boost its reputation as an enterprise vendor."

Samsung's release of the KNOX mobile security platform last year represented "a major leap in terms of enhancing Android as a secure business offering", according to Stephen Drake, vice president of business development at mobile app platform provider FeedHenry.

"In 2014, we expect Samsung to go beyond security and BYOD and enter into key relationships with enterprise customers by providing a broader portfolio of software and services including advanced application enablement," he added.

Juan Pablo Luchetti, group account director at app specialist Mubaloo, was another to claim that "from a security point of view, Samsung are doing the right things" to address the enterprise market. But the key discussion for business IT decision makers will always be about software, he added.

"We hear customers mention Android a lot more than we hear them mention Samsung," he said. "But if you are a Fortune 500 company and are thinking of Android, Samsung is the only way."

The vendor's enterprise chief Long concluded that resellers need not see Samsung as a replacement for longer-standing vendor relationships, but as a partnership that offers something different and attractive.

"I am not suggesting that we are going to replace some of the big infrastructure manufacturers that they have worked with in the past, but we can bring something different to the table," he said. "There is a significant amount of investment to reinforce our B2B credentials and brand. We are in the fortunate position that a large percentage of the population is already using Samsung technology."

Android bites into Apple in 2013

Samsung's push to make a bigger impression in the B2B space comes after a year in which it stretched its lead over Apple as the world's biggest mobile phone maker, and made big gains to firmly establish itself as the iPad's major rival in the tablet sphere.
According to Gartner figures, in 2013 the Korean manufacturer shifted more than 444 million phones, including almost 300 million smartphones. These accounted for 24.6 per cent of all mobile sales, and 31 per cent of the smartphone market. The vendor grew its share of the smartphone space by seven tenths of a point, while major rival Apple's 150 million iPhone shipments meant its market share declined from 19.1 to 15.6 per cent. The total slice of the market accounted for by Android handsets jumped 12 points to 78.4 per cent, with Huawei, Lenovo and LG all also making gains at Apple's expense.
And the fruity vendor's hitherto complete dominance of the tablet arena was also put under far greater pressure last year, more Gartner stats reveal. In 2012 Apple - whose iPads constituted well over half of all worldwide tablet sales - was more than 45 percentage points clear of second-placed Samsung.
In 2013 the gap was narrowed to fewer than 17 points, with Apple's share declining to 36 per cent, while its closest rival increased its share to 19.1 per cent.
Android devices now account for 61.9 per cent of the market, and Gartner research director Roberta Cozza claimed manufacturers will have to work increasingly hard to protect sales and profitability.
"As the Android tablet market becomes highly commoditised, in 2014 it will be critical for vendors to focus on device experience and meaningful technology and value, beyond just hardware and cost, to ensure brand loyalty and improved margins," she said.

Brand breakdown

The 2014 edition of the annual Brandz report from Millward Brown - which ranks the world's 100 most valuable brands - saw Samsung rise one spot to 29th, as its brand worth rose 20 per cent year on year to $25.9bn (£15.4bn). But it still lags a long way behind established enterprise tech giants Google, Apple, IBM, and Microsoft, who occupied the top four spots in the list. The search giant swooped ahead of Apple into the number-one position as its brand value soared 40 per cent to almost $160bn.
In addition to surrendering the top spot, Apple's brand value went backwards to the tune of 20 per cent, and now stands at $147.9bn. The report notes that Samsung had a good year in competing with its biggest rival in the device market.
"Samsung challenged Apple with its Galaxy smartphones," says the report.
"Operating on the Android platform, the phones have a larger screen than the iPhone and other features that Samsung successfully promotes.
"The company pre-empted Apple with the launch of wearable technology, the Samsung Galaxy Gear smartwatch that co-ordinates with Samsung phones and tablets."