Samsung Seeks to Gain Global IT Appeal
LAS VEGASAlready the biggest high-tech company in South Korea, Samsung SDS Co. Ltd. is pushing to become a larger player in the global IT world, building on the strengths of its packaged software and services businesses.
During an interview with eWEEK here at Comdex, Hong Ki Kim, president and CEO of Seoul-based Samsung SDS, said the company also will take advantage of partnerships with other companiesincluding Hewlett-Packard Co., Microsoft Corp. and Computer Associates International Inc.to move into global markets, including the United States.
"We have accomplished much as the biggest and most powerful IT corporation in Korea," Kim said through an interpreter. "However, we have decided our goal is to become the first-rated IT corporation in global terms."
Samsung SDS, part of the larger Samsung Group, is a $1 billion company with more than 7,000 employees and a portfolio that includes software development, consulting and business integration services, and data centers. According to the company, it is the 10th largest IT company in the world.
The company, which opened a U.S. office in 1996, is using Comdex as a chance to show off its technology at one of the biggest IT shows. At the convention, Samsung SDS Americathe companys U.S. subsidiaryis showcasing the newest version of its Acube Enterprise Knowledge Portal, as well as an updated Reqube database reporting tool.
Samsung SDS also announced a licensing agreement with HP that gives it control of HPs fading OpenMail e-mail technology. Samsung will use the Unix- and Linux-based system as the base for its Java-based unified communications initiativecalled Samsung Contactwhich the company plans to roll out incrementally over the next three years.
However, Kim said the top priority for the companys aggressive push into global markets will be its packaged softwareparticularly its ERP (enterprise resource planning) offeringsand the first step in that will be establishing research and development centers around the world. Already Samsung has centers in Korea and China, and has plans to expand into Japan and the United States.
Others steps will include taking advantage of its partnerships and increasing the marketing of its products.
"The superior performance of the product is important, but marketing is as much a factor of success," said Kim, who has been Samsung SDS top executive since 1998.
Samsung SDS has set an aggressive timetable. Software revenues in the U.S. market this year are expected to top off at about $30 million, said Jiyoung Chang, vice president of Samsung SDS America, headquartered in San Jose, Calif. Next year the company expects to grow it to $70 million, followed by $120 million in revenues for 2003.
Kim said he is optimistic about the global software market, which he expects to grow 17 percent a year into 2010. ERP software growth should be around 23 percent, he said, and the business recovery software market should grow about 42 percent.
"This is why I want to focus on packaged software and data centers," he said.
This year the company, which already had two data centers in Korea, opened one in New Jersey and another in Tijuana, Mexico.
"Through data center infrastructures, we want to provide services to manufacturers and business recovery systems," Kim said. "We also want to be extended service providers."
Currently, software accounts for about 3 percent of Samsungs worldwide business, but the companys goal is to increase that to 37 percent by 2010. Data centers account for about 7 percent. About 82 percent of its revenue is in services and an IT outsourcing business. The remaining 8 percent includes such services as professional consulting and e-education.