24 March 2008
by Paul Kunert
Senior management at Samsung Electronics are preparing to expand the company’s horizons beyond commercial IT markets into the ultra price-sensitive public sector and the plan is to do it with partners.
The Korean giant has forecast ambitious growth for UK business units this year, including trebling notebook sales, doubling printer volumes and growing displays by 48 per cent (MicroScope, 25 February).
David Smith, director of the IT division at Samsung, said the vendor had reviewed the market to identify the areas it did not operate in and had highlighted local and central government frameworks including Catalist.
"We are investing in resources to recognise tender opportunities, big tenders for notebook PCs, printers and displays where we have largely not been recognised before," he said.
This is a cut-throat sector typified by reverse auctions that drive prices to the bone, and with vendors reported to have won deals at cost minus 20 per cent there is rarely much room for a fulfilment partner.
But Smith insisted any activity in that space would be with resellers: "In terms of tender business, we will work with partners to provide aggressive pricing to win business," he said.
Ex-Canon veteran David Bromley has recently joined Samsung at a European level to identify tender bids and three heads are joining the UK outfit to work on public sector and corporate tenders.
The build quality and breadth of portfolio from Samsung were strong but price was the primary driver in the public sector, said Gary Price, product and category manager at Catalist accredited supplier Probrand.
"Samsung is looking to hit the price points the public sector is looking for, but it will face a challenge in breaking the grip of other suppliers," he said.
The public sector was already crowded with suppliers, margins could not always accommodate end-to-end fulfilment partners and buyers were incredibly conservative, said Ranjit Atwal, principal analyst at Gartner.
