Samsung takes on Apple, IBM partnership -- by itself

The Korean electronics giant launches a new services offering that will help business customers do everything from make tech purchases to troubleshoot security problems.

Shara Tibken Former managing editor
Shara Tibken was a managing editor at CNET News, overseeing a team covering tech policy, EU tech, mobile and the digital divide. She previously covered mobile as a senior reporter at CNET and also wrote for Dow Jones Newswires and The Wall Street Journal. Shara is a native Midwesterner who still prefers "pop" over "soda."
Shara Tibken
6 min read

Samsung's new services business will help enterprise customers with their tech problems. Samsung

Instead of partnering with a big services company to help business users, Samsung has decided to go it alone.

The South Korean electronics giant on Tuesday unveiled its first entrée into services, called Samsung 360 Services for Business. The operations will allow it to support enterprise customers using everything from smartphones to printers -- and the devices don't even have to be made by Samsung. It will be a one-stop-shop for enterprise customers who need tech help as more of their employees bring their own devices to work and as the company supports more technology vendors.

Businesses are "looking for somebody who can come to the table and bring expertise in different areas and [be] that one partner they can work with," Robin Bienfait, chief enterprise innovation officer for Samsung Electronics, said in an interview. But they're not looking for "one partner that's just going to come in there and say, 'hey, for this to work, you need all of my stuff.'"

With its move, Samsung is taking on some of the biggest companies in tech, namely Apple and IBM. The two giants in July unveiled plans to work together to push Apple's products with business users. IBM operates a sizable consulting and services business, and it also will optimize its cloud computing services, such as device management, security and analytics, for Apples iOS mobile operating system.

Samsung is taking a slightly different track. It plans to utilize more than 10,000 of its worldwide employees -- including many new hires, though it's not revealing details -- to help deploy devices, migrate companies to new software, integrate systems, troubleshoot problems and provide an end-to-end security assessment of all of a company's technology.

"We want to own the strategy and have a direct relationship with our enterprise customers in such a way where they see us as a true business partner as opposed to someone who manufactures the most desirable glass on the planet," Tim Wagner, senior vice president of Samsung Telecommunications America's enterprise business unit, told CNET.

The services move comes as Samsung struggles in its core mobile business. The company on Monday revealed its operating profit likely fell 60 percent year-over-year in the third quarter amid higher market costs and lower device selling prices. It's being pressured by Apple on the high end and vendors such as China-based Xiaomi on the low. As growth slows in Samsung's core mobile operations, the company has looked to new markets to boost its profits. In particular, business users have become a big focus for Samsung over the past several years.

The company first launched its enterprise business in 2010 and since that time, the operations have grown exponentially. Samsung doesn't provide sales figures, but Wagner said the company's business operations "went from a several hundred million [dollar] organization to a multibillion [dollar] organization over four years." And that's just in the US. That has allowed Samsung to rank No. 2 in enterprise market share, Wagner said. He expects Samsung to be the top vendor in 2015 or early 2016.

"We're on a hockey stick, up and to the right from a revenue perspective," he said.

Still, success isn't guaranteed. Providing support for a wide variety of devices and software can be tricky, which is why few other companies have attempted it. By supporting items Samsung doesn't build on its own, it could run into troubles with other vendors and finger pointing over who's responsible for problems. It also could get expensive for Samsung to hire the employees needed to provide support, as well as carry out the various fixes needed.

Samsung's big business push

Samsung in 2011 launched Samsung for Enterprise, or SAFE, in an effort to make Android more secure for employees to bring their own devices to work (known as BYOD). At the time, businesses weren't providing Android devices to employees but instead opted for BlackBerrys and Apple devices, which they viewed as more secure. Samsung counted on BYOD as its entrée to the enterprise, and SAFE's many features included encryption, VPN connectivity, and mobile device management capabilities such as remote wipe.

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Samsung then followed that up in 2013 with the launch of its Knox security platform to make its devices secure enough for the US Defense Department and other organizations. The software debuted on Samsung's flagship Galaxy S4 smartphone, and as of May, Knox had 1.8 million active users out of more than 87 million Knox-enabled devices in the world.

Currently, Samsung is one of only two companies whose devices have been approved by the US National Security Agency for use with classified documents. The other is the Boeing Black smartphone, a device that can erase all data and deactivate when it recognizes attempted disassembly or hacking.

Samsung a year ago also introduced the "Samsung Solutions Exchange," a sort of app store for business programs. And in June at Google's developer conference, the Internet giant announced that Knox would be integrated into the next version of Android, codenamed "Android L."

"Samsung continues to be challenged by Apple, yet appears to have a solid enterprise or [business-to-business] team that has grown tremendously over the past year," said Stephanie Atkinson, CEO of tech consultancy Compass Intelligence. "The device itself is no longer going to be the primary product to differentiate, so the services approach is exactly what Samsung needs to do to push further into the B2B market."

One-stop shop

With the Samsung 360 Services for Business, companies will be able to call Samsung for help even when they have issues with technology from other providers, such as printers from Hewlett-Packard or software from Microsoft. The company will serve as a single point of contact, which will then coordinate with other providers to fix the problems.

Robin Bienfait became Samsung's chief enterprise innvation officer in January after long tenures at BlackBerry and AT&T. Samsung

"IT organizations have had to fend for themselves when coordinating across multiple vendors and offerings," IDC analyst Elaina Stergiades said. "It gets really messy really fast."

The partnership between Apple and IBM was "a first step forward" to provide business-wide mobility services, she said, but it's still exclusively focused on supporting Apple's products. Samsung takes it a step further, she said.

"The fact they're going to serve as a single point of contact at least removes some of the complexity," Stergiades said. "When something goes wrong, companies can start with Samsung."

It's unclear, however, whether Samsung also will provide support for Apple's devices or whether those products will be excluded from its list of covered items.

Samsung kicked off the services project when Bienfait joined the company in January. Previously, she worked as chief information officer at BlackBerry from January 2007 to the end of 2012 and also worked at AT&T's global services business for about 22 years.

The company currently is performing pilots with 25 companies. It will officially launch the service program in the first quarter in the US and then expand to Europe, the Middle East, Africa, and Asia Pacific later on. While Samsung will provide the services on its own, it also will work with partners when needed. Samsung declined to name any companies in the pilot program or make them available for comment.

But the company said it plans to expand its services offering quickly.

"The way to continue the level of success we're having today is by providing truly differentiated software and services and by leading the strategy discussions," Wagner said. "We can't just do that at the Fortune 1500. ... We also have to own the midmarket and have to get into small business as well. You're going to see substantial evolutions of the Samsung brand and Samsung offerings."

Samsung services include:

-Technical support and service desk

-Application support

-Security support

-Deployment support

-Samsung MobileCare for Enterprise

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