Samsung Mobile Channel Chief Mike Coleman On Unlocking 'Explosive Growth' In The Channel And Partner Recruitment For 2018

The Mobile Age

After a year of re-engineering its mobile efforts in the channel, Samsung's mobility business is positioned for huge growth in 2018 with partners, Samsung mobile channel chief Mike Coleman told CRN. The former HP executive believes the opportunity is on par with what he saw at HP when that company first began to embrace the channel decades ago. That will mean a lot more deals with Samsung partners and a lot of new partners coming aboard with the company in the next year, he said. "We have now laid the groundwork for what I consider to be explosive growth, in terms of partner recruitment, in 2018," Coleman told CRN during an interview at Samsung's retail and corporate outpost in New York. "We had significant growth in 2017 [in channel sales]. And we expect to have significant growth in 2018."

The optimism is based in part on Samsung's novel approach to bringing mobility solutions to market, which includes trailblazing moves such as selling unlocked Galaxy smartphones through channel partners and developing vertical-specific solutions for businesses, at a time when other smartphone vendors remain almost exclusively focused on consumers.

Coleman, who joined Samsung as vice president of mobile channels in January 2017, spoke with CRN about what Samsung has accomplished so far in re-engineering its mobile channel efforts, why mobility is such a large opportunity for partners, and what to expect in 2018. What follows is an excerpt of CRN's interview with Coleman.

Could you talk a bit about your background and how it informs what you're doing at Samsung?

I have 30 years in business, 25 years in the channel. I started out with Hewlett-Packard – I signed CDW, Insight, and PC Connection to the first contracts with HP. When I left in 2006, we were doing $2.6 billion through the channel organization … [Later] I was asked to join SAP, to run the channel organization at SAP. [And then] I was asked to rejoin HPE to build that cloud practice out. I joined Samsung on Jan. 3, 2017, to try and take my experience and build out that channel. The channel organization was split as of January. In 2016, there was essentially one channel organization, including digital signage, digital display, SSD memory, and all of the mobile products. There was tremendous growth, but not a whole lot of focus on mobile. So it was decided in January 2017 that we would divide it. So Greg Taylor stayed as channel chief [for display and SSD/memory], and I took on the role of channel chief for the mobile products. We started with a fairly small team, and we doubled the team in 2017. Next year we're going to extend it quite a bit more. We had wonderful growth in 2017 over 2016, and we're expecting more wonderful growth in 2018.

How would you describe the mobility opportunity you see for channel partners working with Samsung?

With the explosive growth in the public cloud, many channel partners are stuck in a paradigm where companies that used to buy servers, networking, and storage through the channel partners, can now easily access that via a URL with an untethered device. And so the channel partners are in a spot where they're not really sure how to hedge against that risk. So we bring a refreshing opportunity for them to hedge that risk, and embrace the movement to the mobile side, and embrace Samsung as a result, and build a practice around mobility. Or, in many cases, they already have a practice, and we kind of inject the Samsung component into that.

What will be the focus for the mobile channel program at Samsung in 2018?

Moving into 2018, our objective is to recruit a significant number of mobility-specific partners to the Samsung practice. We have a mobility solution partner program that we've built. And essentially, I call it the "give-get." So for a partner that wants to embrace us and invest in us, we, therefore, invest in them … The objective is to find partners that are willing to invest in us, become certified in our mobility solutions, invest in training, invest in marketing, invest in sales leads. And then we dedicate a rep to them. We provide a bucket of MDF. We allow them to use facilities for partner prospecting-type events. We have an inside sales force that we are growing significantly, that is building leads. And as part of that program, in exchange for their commitment to us, we commit to them a certain number of leads that will flow through them. We agree to joint pursuits. We engage our field sales force to work closely with those partners as well. And so as a result of that, we have had a second-half surge of partners that have signed up and committed to us on the [mobility solution provider] program. And we have now laid the groundwork for what I consider to be explosive growth, in terms of partner recruitment, in 2018.

How would you describe the types of partners you're targeting? And what are the strongest verticals?

We've worked with a couple of consulting firms to dissect the Tier 2 reseller community. And we've identified a significant number of those resellers, of all sizes, that have or are interested in building a mobility practice. And that's our focus. So we don't necessarily have a size requirement, but we want to invest in partners that have a mobility practice, or are willing to build a practice with us.

Health care is a big vertical. Transportation, with the Magellan electronic logbook, is another one. Financial services, like retail banking. Retail, with point-of-sale [solutions], is another opportunity. Government--the state/Fed/SLED component of it. Those are the major verticals at the moment. As we develop and tailor more and more solutions, hospitality is one that we're focusing on as well.

What are some of the ways you're bringing mobility solutions to market with partners?

We've built a really interesting sub-practice around mobility-as-a-service … So for example, unlocked phones--that was a really interesting launch this year. It's something that is fairly new to the U.S. We are growing that from a smaller base. And so the partners can take an unlocked device that doesn't come with any of the bloatware, doesn't have any carrier obligations – [and then] customize the user interface, the security parameters and protocol, and provide a customer with a device that can be WiFi-only. Or, it can be a device that can be essentially activated on multiple networks, depending on the coverage models. And it provides the customer with an option to now work through a channel partner, either in a procurement phase where they buy them outright, or in an as-a-service model. And we have a number of partners like Stratix, Mobility Consulting Group, and Hyperion, which have done a great job of embracing this technique and this business model. [They're] able to provide very valuable services, device-as-a-service and mobility-as-a-service, to their customers to build quite a significant pipeline of opportunity. Which is kind of a different way of thinking. And so we're introducing this concept to all of the partners for consideration. It provides choice and flexibility, and a good revenue stream that is different from what they may have experienced in the past.

How else are you tailoring mobility solutions to businesses?

Another thing that we're doing is taking the technology like the S8 Plus, and we're offering the Enterprise Edition. The idea is to sell the business customer a phone that is business-ready. A lot of the feedback we'd received from end-user customers was, can you guarantee that this phone will be available for a certain period? If I standardize on it, will I know that it's going to be there tomorrow? So we have guaranteed availability for two years post-launch, which was very well-received by our customers. For security patches, can you push security patches directly to the phone on a monthly basis? Yes, we can. That eliminated an obstacle for many business customers because they had to make sure the phone was secure. We do Knox Configure so that you can do mobile enrollment, and you can configure it, and customize it. It is a good example of taking a traditional device, enabling it in the Enterprise Edition, and then offering that through the channel to customers.

Other smartphone vendors aren't attempting to sell unlocked phones with the channel. What are some of the challenges of doing this? And have the efforts met expectations so far?

We have embarked on what I'll call an awareness campaign. Because I think in many cases, businesses and partners don't even know that it exists. Or, don't really understand what it is. So my team has had the responsibility of educating them, as in, "Did you know the unlocked phone exists? Here's what it is, here's what it isn't. Here's where we think it has a good fit." And so [partners] have really started to become interested in, aware of, and now embrace the unlocked phone. For example, in health care. In many cases, a hospital may not need a carrier for voice or data, because it's a WiFi-only device that works intra-hospital. So the unlocked phone is the perfect opportunity, because it doesn't come with a data plan or a voice plan. That's a unique opportunity to present a device that might be different and more cost-effective than what they were considering before. And so we're starting to see that partners have build practices around it, whether it be mobility-as-a-service, or in a verticalized application like health care. I would say it's been very successful, but it's brand new, so I'm not sure we knew what to expect in terms of targets, per se. But it's certainly done very well. And I think you'll see it grow significantly in 2018.

Are partners getting margin on the devices?

Absolutely. We have to make sure there's margin in it for the partners. I call it the circle of margin. The device itself has a certain margin threshold, which is moderate, I'll call it. But when you start to surround it with things like accidental damage for screen fixes, extended warranty, you put a case on it, you put EMM on it for mobility management. Then you can either sell it as a package, or as a service. The more stuff that you wrap around it, that circle of margin, obviously the richer the margin is. We've seen partners that do that well and succeed in that. And those that want to sell it as a service can do some really interesting things, because they incorporate the individual value into the price per month. So you're selling a device-as-a-service with a menu of options that they've selected, and all of a sudden they have a recurring revenue stream. And at the end of a two-year cycle, they refresh. And they've built themselves a recurring revenue stream with the phones, with the tablets, with the wearables. We also engineered programs from an MDF perspective--volume incentive rebates which we've put in place for many of our products. We have a [program that] allows them to look for opportunity for multiple unit volumes. So I'm very mindful of how they make money with us.

Do you see unlocked phones becoming a significant part of Samsung's B2B efforts?

I can tell you that Samsung is investing heavily in the B2B focus of our [smartphone] solutions. And one of our primary objectives is to take these solutions, business-ize them, and then deliver solutions that solve problems. So this is absolutely a strategic focus for Samsung. The growth is expected to be significant and sizable, and I think you'll continue to see that be a bigger contributor to the Samsung U.S. [business] year-over-year.

What new investments are you making into the channel in 2018?

We're significantly adding to the number of folks on the team. We are working more closely with our fielded sales force--key account managers and business account managers. We're working more closely with them, in terms of working more closely with the channel, to truly extend the reach. We're investing in some of the fundamentals of the channel, from an MDF perspective, from awareness campaigns, from channel programs on the back-end, the front-end. We're working more closely with certain partners like the mobility solution partners that want to team with us.

How does the opportunity you see right now for Samsung and partners compare to what you've seen at your previous companies?

I liken this to being similar to my experience at HP, when we were just starting to embrace the channel. And as you know, that's been explosive growth in the multi-billions through the channel. I liken it to the level of excitement and engagement, the support we have from Samsung corporate, the support we have from Samsung local and [Samsung Electronics America], the drive to build out our mobile channel practice, the support we're getting for that. And the excitement and energy we're feeling from the partners--both those that we've already engaged with and those that we are prospecting with. It's a very exciting time. You couple that with the products that we have, which are just amazing, and can solve business problems. We are on a recruitment campaign, we've tailored many of the products to the verticals we just talked about to solve real business problems. We've enterprise-enabled much of our technology, to make sure it solves business problems. And we've introduced new ways to go to market, like device- or mobility-as-a-service. So those are the tenets of our model. We've seen good traction, and I think we will see exponentially more traction and more significant growth in 2018 and beyond.