Samsung Makes Mobile Enterprise Bid
by Sean Ryan; Stephen Drake
Mobile World Congress 2010 was full of major announcements: the unveiling of Windows Phone 7, Intel and Nokia's MeeGo, a first glimpse at several new Android powered devices, BES Express, and the Wholesale Applications Community, among others. Under the radar of such high visibility announcements, Samsung forged partnerships with some leading mobile enterprise software providers, thus making clear its ambition to become a leading provider of converged mobile devices (smartphones) for the enterprise market.
With the exception of RIM, and to a lesser extent Apple with the iPhone as well as Nokia with its Eseries devices, most CMD vendors have had a tough time trying to differentiate their devices and business model for enterprise customers. Furthermore, they have been very dependent on their mobile operator partners for the selling of those devices to corporate users. Aside from volume discounts, device vendors have had few levers to differentiate from competing device vendors, especially in situations where the mobile OS is licensed across a number of vendors, as is the case with Microsoft’s Windows Mobile and upcoming Windows Phone 7, or Google Android, or the Symbian Foundation’s Symbian OS.
Samsung is making a move to put itself on a different level in the minds of enterprise users and its channel partners (most notably mobile operators). To achieve this end, it has announced partnerships with a select group of mobile enterprise software providers: Sybase iAnywhere, Spring Wireless, Formotus, Cisco, Microsoft and Wipro. Its partnership with Sybase is for certification and co-marketing of the Afaria mobile device management and mobile security offering for select Samsung devices. The partnership is global in nature and dovetails nicely with the partnership between Sybase and the Samsung SDS professional services group for the Sybase Unwired Platform (SUP). This gives the two companies multiple routes to market, which Samsung coordinates through a centralized enterprise group on its end. The Spring Wireless partnership is focused on the Americas at this point, and field force deployments in particular. It again involves timely device certifications and co-marketing. The Formotus partnership is likely to be centered around the Formotus platform support for SharePoint for Windows Mobile and Android. Formotus is US-based, and this partnership is likely for the North American market. Samsung will work with Cisco for unified communications solutions, with Microsoft for OS, Office Mobile, .NET and Visual Studios capabilities, and Wipro Samsung will offer its Mobile Claim Adjuster solution.
Samsung has some points in its favor going into this announcement. It is the second largest mobile device vendor in the world, behind Nokia, and has the largest market share for mobile device shipments in the United States. Strategically speaking, the company is looking to increase its share in the high end of the market, both in the U.S. and worldwide, with CMDs based on Android, Windows Mobile 6.x (eventually Windows Phone 7) and its own bada OS. To be a major player in the high end of the market, Samsung knows that it must address the needs of the enterprise. IDC data shows that Business Use CMD shipments (corporate-liable and individual-liable combined) accounted for 32% of total CMD shipments worldwide in 2009, and 54% in the U.S. Samsung also has deep pockets, as well as divisions such as Samsung SDS, that it can leverage for synergies, and a centralized enterprise team to drive and coordinate these efforts. Samsung is smart in its approach to pursue a multitude of channels to market for reaching enterprise buyers. Sybase also has a partnership with Samsung SDS (a professional services division that is completely separate from Samsung Electronics). In addition, it is leveraging its mobile operator partners as an avenue to market. And most importantly, Samsung has a centralized mobile enterprise group to drive initiatives and to coordinate all of these channels — a group that is held accountable and is rewarded for building a successful enterprise practice at Samsung.
However, success is not guaranteed for Samsung, but it can learn from its competitors’ challenges in the market. Other large and established device vendors have tried to penetrate the enterprise with only marginal success. Nokia, the world’s largest vendor for both total mobile device shipments and for CMDs, had been directly challenging RIM in the enterprise with Intellisync, its own middleware and device management platform until ceasing operations of that unit in 2008. Nokia is now leveraging partnerships with Microsoft (Mail for Exchange), IBM (Lotus Notes Traveler), Cisco and Alcatel-Lucent (Nokia Call Connect) for its enterprise play — a move that seems to be working better for them. Motorola, the leader in shipments of ruggedized mobile devices (RMDs), and an early enterprise leader with the Nextel PTT phones, has had only marginal success in enterprise uptake of its CMDs, despite having an enterprise focused team. Motorola also acquired Good Technologies for mobile enterprise software purposes, but it ended up selling the unit off two years later. HTC, in 2007 and 2008, had forged some alliances with Sybase, Odyssey Software and other mobile enterprise software players, yet these have been limited to a few press releases and early customer engagements, but little else.
So how could Samsung succeed in challenging RIM in the enterprise, where these others have had only limited success? Samsung can throw a lot of resources at this effort (financial and otherwise) if it so chooses. It has selected some good partners with mobile enterprise credibility, but the details and the level of commitment by Samsung and its partners are still being determined, as is often the case with new partnerships as each party seeks cost/benefit equilibrium. There is also the question of mobile OS platform support. Samsung has indicated that it wants to support Windows Mobile as well as Android and its new bada platform. And for Windows Mobile, there is a new challenge — the just announced Windows Phone 7 OS will not be compatible with the previous Windows Mobile 6.x versions being used in enterprises today. Furthermore, Android is a fragmented platform as well. Perhaps all of this fragmentation at the OS level is an opportunity for a major OEM to take the reigns and build a cross platform portfolio of enterprise ready devices with partners that have expertise in the enterprise (Sybase, Spring Wireless, etc.). Samsung seems to be avoiding the pitfalls of some of its competitors and is going the partnering over purchasing route. The company has an opportunity to leverage its Windows Mobile strength, but also take the lead with Android and those business users clamoring to use an Android-based device for business — on the heels of iPhone’s move to the enterprise. This is the crux of both the opportunity and the challenge for Samsung. Execution will be key, and there are sure to be some growing pains, but Samsung is wellpositioned and, at this point in time, appears committed to enterprise market growth.