’Tech industry to recover in 2012’

Samsung SDS sees post-crisis opportunities

By Kim Yoo-chul

Steady industry advancements are making it possible for technology-driven companies, suffering from a decline in profits in the struggling global economy, to see opportunities next year.

Leading information technology (IT) firms have been hit disproportionately hard by the economic turmoil in developing and developed markets with households expected to spend less on consumer electronics than a year ago.

``We believe the current market uncertainties are creating further business opportunities for firms because technology advancements are awakening idling demand for devices,’’ said Koh Soon-dong, chief executive of Samsung SDS, Monday.

``The recovery of the technology industry significantly helped businesses overcome difficulties during the `oil shock’ in the 1980s, the currency crisis in the 1990s and the dot-com bubble in the early-2000s,’’ Koh told The Korea Times.

Breakthroughs in technology development are being made with companies bracing for uncertainties as they spend more on cost-cutting to produce ``wow’’ items by applying finer manufacturing or servicing technologies, according to the CEO.

``Amid the oil-crisis decades ago, firms began using big computers for better supply and demand systems, resulting in IT-based systems taking off. After the Gulf War, office automation topped the industry. And we saw an outsourcing trend in the wake of the dot-com bubble,’’ Koh said.

``It seems ironic that there was evidence that the entire technology industry went one-step farther after experiencing economic uncertainties.’’

Samsung SDS is the IT services arm of the Samsung Group and the non-listed affiliate handles logistics and computing-related systems for the conglomerate.

Smart products and convergence

The chief executive identified ``smart’’ and ``convergence’’ as the two key words for next year’s technology sector.

``IT is not just a tool anymore. It is taking an active role to lead changes, not just taking a passive role that it did decades ago,’’ said Koh.

``Companies are experiencing big changes due to the rapid expansion of social networking services and mobilization and I think that’s why more attention should be paid to smart products and convergence.’’

According to Koh, SDS has been investing more for solutions- and platform-related business models specifically in cloud computing, and mobile and smart devices.

In today’s electronics market, software is more important than hardware because the era of design-focused consumer products has gone with the emergence of ``all-in-one’’ devices such as smartphones and tablets.

This has seen software giants Google and Apple receive more attention and hardware leaders like Samsung strengthen strategic alliances with such firms and hire more staff to work on software.

But the executive declined to unveil further financial details and business road-maps citing the sensitivity of the issue.

With help from Samsung SDS, Samsung Electronics has been using its own cloud computing system, S-Cloud, for its digital devices.

SDS is developing cloud systems for Samsung Group’s internal use. But the fundamental strategy behind S-Cloud is to connect every device a user owns, even appliances, to the cloud.

According to Samsung officials, they will initially provide the service for smartphones, tablets, PCs, and TVs but will gradually expand it to integrate products including printers, cameras, and appliances.

``Existing Samsung content services such as its “Readers Hub” (ebooks), “Media Hub” (TV shows and movies) and “Game Hub” (games) are being integrated into the cloud service and the trend is the Samsung Group-wide strategy to actively ride the new industry wave,’’ said a Samsung spokesman.

``Big companies are hesitant to proceed using cloud-computing as it’s totally new. But the one clear thing is that no one can stop the wave of the new computing system,’’ said Koh, adding the company is seeing more chances to export its system-based products in government-led projects such as the construction of e-government and toll systems.

``When we talk about cloud computing, there is good and bad. It’s a radical step toward acceptance that information stored on server computers at an unidentified location is not a bad thing. But as with any new technology, companies have to acknowledge possible advantages and disadvantages. Cloud computing is in that sense no exception.’’

SDS aims to get 30 percent of its projected 5 trillion won in revenue from overseas.

Koh joined Samsung SDS in 2003 after heavy involvement in IBM of the United States. He is fluent in English and was hired by Samsung in line with the group’s strategy to lift SDS to a global IT solutions firm.