Samsung B2B Chief On Ramping Mobility Solutions, Wearables In The Enterprise And Recruiting Channel Partners

Samsung's B2B Push

Channel veteran Kevin Gilroy took over the business-to-business division at Samsung Electronics in August 2015, and since then has been overseeing a major evolution of the company's channel initiatives. Along with adding new members to the channel team, Samsung has also focused in on building new types of mobility solutions with partners and on bringing devices into the channel -- such as Galaxy smartphones and the Gear S3 smartwatch -- that previously were thought of just as consumer devices. We spoke with Gilroy about what's happened so far with Samsung's big moves in the B2B space, and what to expect next as the company looks to work more closely with the channel.

How have you been changing Samsung's approach to the channel?

A number of us joined Samsung about 18 months ago, with the goal of taking an already pretty big B2B business, in the billions, and scaling it up into a very, very high number. We put a plan together, and we've been executing on that plan ever since. We kind of finished Phase 1 this December 31, and that Phase 1 was re-engineering our direct sales team – and when I say 'direct,' 99.9 percent of our business goes through the channel, one form or the other. And we had a really solid team that was here before I got here, and we augmented that team with a lot of channel and alliance expertise -- [such as vice president of sales operations] Carrie Maslen. We just recently had Mike Coleman join us, who also has been in the channel for a long time at HP and SAP, along with a host of other people. So we had a really solid team here, people like [vice president of strategic alliances] Jim [Heesacker], who know their way around Samsung, both within Korea and around the world, and certainly within the U.S. And we combined that in Phase 1 [by adding] 100 people in 2016 with deep channel, indirect selling skills.

How have you approached ramping up the channel initiative at Samsung?

When we looked at the growth numbers that we think the market affords us, with the product sets we have, we knew we'd need on-payroll assets to do that, but to cover the market we need a powerful off-payroll set of assets, being the channel. I think you know from my background, I'm pretty passionate about the channel. Our existing alliance program was a pretty good program, but it was more focused on ISVs, application development, more that traditional stuff. Our channel programs [were] really around speeds, feeds and device selling. This evolution of our off-payroll assets, our alliance program, our channel program, etc., is really [us] pivoting Samsung B2B from a device selling organization to a solution selling organization. We're really pivoting to solving customer problems.

How has the approach to solving customer problems changed?

So when we used to go into an account, and say, "How many employees do you have? We want every one of them to have a Samsung phone, and we have the best phone in the world, and a really cool curved screen, and great pixels, and great cameras." And we did reasonably well selling that way. But now we've pivoted to saying, "What's your business problem? How do our mobile devices tie into your cloud architecture, as endpoint devices? How do our mobile devices tie even back into your backend, potentially even artificial intelligence?"

So we're at companies around the U.S., enterprise, Fortune 500, Fortune 1,000, mid-market, and small-medium businesses, really understanding the workflows of these businesses, and building up an alliance program that is going to map the needs of those customers. So we're really excited about this program – our vertical strategy, our horizontal strategy, product strategy, solutions strategy, all coming together, and this is one of the major tenets.

When you're selling smartphones to businesses now, the focus is on business solutions?

That's exactly right. Just a few years ago, people sold smartphones primarily through carriers, and the economic model was the margin on the hardware, plus the economics of the lines and recurring revenue streams of the line fees. And we still do a great business there, and we're really happy with it, and we're still growing it at a nice clip. But we also have carrier partners do this, as well as alliance partners, [where] again, the smartphone becomes much more than just a handheld device, it becomes an endpoint data collection device, in some instances it's driving solutions.

What would be some examples of this solutions-first approach?

We have a very large customer that builds aircraft, and the way it used to work was that all the schematics, parts, were on a computer down on the shop floor.

Somebody working in the cockpit on a new plane climbs the stairs, goes in the cockpit, does some work, needs to find a part, or needs to look at a schematic, goes down the stairs, over to a terminal that's on a little cart on wheels.

Now we have tablets and PCs tied into their whole digital infrastructure of an aircraft manufacturer. In the cockpit, that engineer is looking at a Samsung tablet or a Samsung phone and can find parts, can look at schematics, can tie back into artificial intelligence, or troubleshooting.

The economic model for the alliance partner, the solution partner, becomes the device plus the software plus the deployment plus the support maintenance, plus all sorts of other things.

We have a saying here: "We don't sell naked phones." We sell phones with solutions and support wrapped all around it.

Where else might channel partners find big mobility solutions opportunities?

If you've studied our Knox software – Gartner rated No. 1 as the most secure mobile software in the world – alliance partners love that. Because it opens opportunities in government, in finance, in health care, in anything that's regulated. Even any commercial customer that has customer data or customer credit card data wants Knox.

The other thing is that Millennials are adopting technology faster than you can imagine, and they're demanding a different work experience than the Boomers or the Xers. In order to attract the best and the brightest talent in the workforce, they must have a next-generation technology, because otherwise the best and the brightest don't show up. There are going to be channel partners -- alliance partners, ISV partners, VARs, carriers -- that capture this dynamic. And there are going to be some who miss it. Because this is a curve – and Jim, he's going to make sure that the alliance partners he's working with catch this curve – because we think this curve is huge.

How does providing unlocked phones to distributors fit into this model?

We listened to our customers -- some customers loved locked phones, they love their relationships with carriers. They want the lines and hardware to be interlocked into one package, and we deliver that. But there are customers that are telling us they want to separate the hardware purchase from the line purchase, and they want unlocked phones, so they can shop around to different carriers. I think VARs can benefit locked or unlocked -- either way works for a VAR, because again the device has its own economics that are attractive, but the drag factors on what the hardware device drags along with it -- software, support solutions, etc. -- is profound economics.

At CES, Samsung was demonstrating the value of the Gear S3 in the enterprise -- is there an inherent channel opportunity to that?

We think the channel is absolutely key to wearable devices, IoT devices. So you think about a trucking company, or any sort of transportation company, that wants to make sure their drivers are alert and have enough sleep. Our wearable devices can notify them when they've potentially not had enough sleep. There are many jobs inside the wings of aircraft, where these customers are saying they can't have anything in their hands but tools -- so they can't have a smartphone or tablet, they need it on their watch. Some of the use cases for the elderly with wearables are amazing. Post-operative use and post-hospital use of wearables. This is not going to be sold directly by Samsung -- we go, one way or the other, through channel partners.

These are going to be huge opportunities. I was a tiny bit of a skeptic on wearables in the B2B space, just 18 months ago. And now I am all-in on wearables. In fact, I think the use cases on wearables [in enterprise] will be 10x what they are on consumer. There are just so many use cases.

What made you skeptical initially about wearables in the enterprise?

The first evolution of wearables was more around fitness stuff. Now I see the use cases around the globe, but particularly here in the U.S., where every conversation we're in, some part of the conversation with the customer revolves around the use case for wearables. There's a pent-up demand for it from some customers. And we believe there's a latent demand, as we start building out referenceable sites and use cases, demand will be unlocked. So the net-net is alliance partners, channel partners, people writing on our platform, ISV partners – they're going to get rich.

What else are you planning to do with the channel?

As I mentioned, we just brought on Mike Coleman on the channel side. So Jim runs alliances, Mike runs traditional channel. We've asked Mike to go on a major recruiting campaign. So we have a lot of channel partners now, we've asked him to reactivate many of them who are on board with Samsung, but we want to super-charge them. And we also want to look at white space and areas like health care, government, financial segment, mid-market, retail, transportation -- where we're not going to be able to cover on payroll. We need a channel that's going to be able to knock on doors, and make a lot of money selling our products. So Mike's going to be building out that major recruitment, and we hope there's a lot of channel partners that come join us, and make some money, and make some history as we continue our march.