Gregory Wade, who helped lead BlackBerry’s push in emerging markets, now working to help South Korean tech giant Samsung thriveEdwin Koo/The Globe and Mail
In early October last year, just two months after he was hired by Samsung Electronics Co. Ltd., Gregory Wade found himself in the South Korean tech giant's Silicon Valley offices in San Jose, Calif., sitting across the bargaining table from some of his long-time former colleagues.
For 12 years, Mr. Wade had worked as a senior executive at BlackBerry Ltd., leading the company's fast-growing Asia-Pacific business unit – a division that included vast emerging markets such as Indonesia.
But at this meeting – which came as BlackBerry continued its pivot from a flagging hardware business to focus on software and services – Mr. Wade found himself on an unfamiliar side of the table. He was now helping Samsung hash out the final details of an unprecedented partnership with BlackBerry, his former employer, to deploy some of the Canadian company's renowned security software on the company's popular Galaxy smartphones.
"I joked, 'Hey, you guys are finally going to have an opportunity to sell some really cool tablets,'" Mr. Wade said, referring to BlackBerry's unpopular PlayBook tablet.
For years, Samsung has built smartphones that have proven enormously popular with consumers around the world – challenging Apple Inc.'s iPhone and propelling the company to the upper echelons of global technology. But as Samsung's red-hot growth has cooled – it recently lowered second-quarter profit forecasts after poor sales of new Galaxy S6 smartphones – the company has aggressively focused on winning over new business and government clients to boost its bottom line. The Suwon-based firm scoured the globe for talent that could help the company conquer this extremely lucrative "enterprise" market, which was previously dominated by BlackBerry, where customers take a whole suite of software in addition to buying devices – making them much more valuable clients than your average consumer.
Mr. Wade, now the vice-president of Samsung's enterprise business team, joined as part of the company's push to succeed in the enterprise space that was once thoroughly dominated by BlackBerry. Over the years, BlackBerry's software and devices became outdated, and corporate employees increasingly preferred to use Samsung phones, which ran Google Inc.'s Android software, and iPhones in the workplace – kickstarting the IT phenomenon known as BYOD, or bring your own device. But IT departments, which had long trusted BlackBerry's prowess with security and encryption, viewed Android's more open, vulnerable software with disdain – and worried that it would lead to security breaches. Samsung knew that was a problem, Mr. Wade said.
"They recognized there were certain hurdles and challenges to overcome with respect to Android from a security perspective," he said. "And that's where the company was able to tap into its talent to be able to build out that security platform."
Unlike BlackBerry, Mr. Wade notes, Samsung's 300,000-odd employees give it the scale and capacity to make dramatic, world-spanning strategic shifts – and part of his job was making sure that Samsung sales staff from Brazil to Russia were equipped with the information to sell Samsung devices to business people and IT departments.
"You take a look at that experience, and contrast that to 12 years at BlackBerry – you look at timeliness, time frames, the product development cycles," he says. "You just do recognize the powerhouse that Samsung is."
And because Samsung's business spans mobile phones, tablets, TVs, visual panel displays and health technology, there is a whole suite of devices the company can offer to businesses – unlike either BlackBerry or Apple.
And so far, the hirings of people such as Mr. Wade, the introduction of its Knox security platform, and its partnership with BlackBerry seem to be working. Back in 2009, Android phones accounted for just 2 per cent of the phones shipped to commercial clients ordering new devices, according to research firm IDC, compared to BlackBerrys – which accounted for 45.9 per cent of the market. But in 2014, corporate shipments of Android devices reached 49 million phones, versus just 2.5 million BlackBerrys and roughly 23 million iPhones. (Android devices shipped to corporate or government clients are almost exclusively Samsung, since most companies rarely deploy any other type of Android phone.)
The roughly 80 million so-called "enterprise" devices shipped last year comprise a relatively small slice of broader mobile phone sales. But for a company such as Samsung, the additional sales of device management software and security services can help boost profits.
J.P. Gownder, an analyst at Forrester Research, said Samsung has built a "world-class enterprise organization" and has built out a viable security platform that has eased companies' fears about deploying Android to their workers. Samsung, he said, entered the enterprise market through the sheer popularity of its smartphones to regular consumers. "They're consumer-friendly, therefore they're worker-friendly," he says, which led to employees requesting their Android phones be hooked up to work e-mail. But Samsung, he said, despite the fact that it has a suite of technology products to offer to businesses, is far from dominant in the corporate space the way BlackBerry once was – and is still outsold by Apple at many of the large American firms that he consults with as an adviser at Forrester.
"In North America, enterprises are not buying a whole lot of Android equipment at this point," Mr. Gownder said. "But if you look at emerging markets … you're seeing pretty vast scale."
In Tunisia, for example, Samsung accounts for roughly 40 per cent of the devices that wireless carrier Ooredoo Tunisia ships to corporate clients, said chief executive officer Ken Campbell, who was previously the CEO of Wind Mobile in Canada. He said the devices have become a solid contender for many regular employees, but are still not favoured by senior executives.
"When I go and visit a business customer, Samsung is definitely one of the handsets we're going to be talking about," he said. "But at the higher level, the executive directors and senior managers, they tend to take iPhones."
At the same time, he said, iPhones are limited to the elite because Apple's application store requires a credit card – which many in Tunisia, as well as other emerging markets, do not have. Android, on the other hand, has a very open ecosystem with a lot of free, localized apps, he said. Samsung also makes a much wider range of devices, including popular dual-SIM phones with two SIM cards, and models ranging from ultra-cheap, small devices to premium devices with large screens.
But in a similar fashion to how BlackBerry was once displaced in emerging markets such as Indonesia, Nigeria and Brazil by a variety of handset vendors running sleek Android software, Samsung now finds itself at risk of losing its lead in the developing world by a number of Android-using Chinese manufacturers – either new brands coming in at the low end, or more established Chinese brands such as Huawei and Lenovo.
"We just launched Lenovo here, and that will take market share away from Samsung, for sure," Mr. Campbell added.
But however Samsung's position in the enterprise market shifts, it is unlikely to fall as low as BlackBerry has in certain markets. "We keep some in stock for customers who want them," Mr. Campbell says of BlackBerrys. "They're kind of a collector's item. It's too bad."
Mr. Wade, who led BlackBerry's push in many emerging markets and is now helping Samsung cement a new lead with corporate customers around the world, said executives at BlackBerry's headquarters in Waterloo, Ont., never fully exploited the company's popularity in emerging markets – including cashing in on the company's hugely popular BlackBerry Messenger platform, which allowed users to send messages cheaply over data networks long before WhatsApp, Apple's iMessage and other services.
"The business itself was growing in vast developing economies, not just in Asia-Pacific but everywhere – in [Latin America], South Africa and other developing markets," Mr. Wade said. "Sure, they were lower-end, mid-range devices. But from what I observed, it was really difficult for the company to separate itself from its Western, developed markets and its [wireless] carrier roots. That's the challenge. It just didn't generally understand the markets in developing economies enough to say 'This is where we're willing to double down and invest further.'"