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Samsung VXT: The Road to Platform Economy

The digital signage value chain is being reorganized. The platform concept, which Samsung is the first to implement consistently, could be the solution of the future – with consequences for the entire market structure.

The digital signage industry has come a long way. While the focus was initially on selling hardware, the industry is now heavily involved in the solution business. Sophisticated in-store experiences can no longer be realized by thinking in silos – they require a holistic approach. Planning customer journeys across all channels brings completely new demands for integrators, architects, and brand managers.

Value creation is now shifting towards software and service providers, with hardware – once dominant – becoming less crucial or more interchangeable. To help mitigate falling prices, many hardware manufacturers now offer extensions, refurbishments, and financing.

The start of a new path

Amidst these market shifts, the launch of Samsung VXT took center stage during ISE in early 2024. After extensive preparation, the global display market leader introduced a new digital signage platform, the Visual Experience Platform (VXT), developed from scratch.

This platform isn’t just a modern successor to Magicinfo CMS; it marks Samsung’s first venture into software provision alongside its hardware business.

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VXT is by no means a successor to Magicinfo; it represents a new direction for Samsung. This global platform is not primarily a CMS but an open technology and sales platform with an app store.

By taking the platform path, Samsung is opening up the digital signage market to new end customers, on the one hand, and to all providers, on the other. Whether independent software developers (ISVs), integrators with their own CMS platforms, or (retail) technology providers, all can now easily offer their solutions and services worldwide.

The aim is nothing less than the democratization of digital signage, transforming it into a mass market.

Platform economy and digital signage

The basic idea behind software platforms is simple: an open environment allows third-party providers to join and expand the system through standardized interfaces. Digital platforms, operated by trusted companies, offer reliability and foster loyalty. The more users a platform has, the more all market participants benefit – known as the network effect. Successful platform examples include Amazon, Uber, and Booking, which provide access to a large number of customers for many providers.

According to a 2019 study by Harvard Business School, MIT, and the University of Surrey, the top 43 listed platform providers achieved nearly twice the growth rate, profit, and valuation over 20 years compared to the 100 largest companies in the same sectors, but with only half the number of employees.

To offer digital signage to numerous companies, global platform providers are essential, not just from Samsung’s viewpoint. Display manufacturers are ideally positioned to establish such sales and technology platforms. Contrary to industry concerns, VXT isn’t meant to replace other CMS but to efficiently make them available to a global clientele. The VXT content management system and remote device management solutions are just one app among hundreds.

Large installed base required

Independent software providers know the challenges – software development and support are costly and require sufficient scaling. A new development costs between one and two million euros and is needed every ten years. This development effort should be spread over a broad base of users or subscriptions. With less than 100,000 active standard licenses costing between 10 and 15 euros, software platforms can hardly succeed in the long term.

However, large companies building global platforms are able to leverage their existing business to reach the required user numbers and generate new leads simultaneously.

Limitations of platforms

Platforms are most effective for highly standardized offerings that are easy to compare, which contrasts with the current state of digital signage – complex, less standardized and an unusual mix of technology and content. Therefore, platforms are not the right distribution model for complex, global enterprise tenders. In the entry-level segment, however, easily accessible solutions have an advantage. Intuiface, for instance, has demonstrated for years how a low entry barrier using a no-code CMS can lead to large projects. Similarly, Telelogos, available in the SAP Appstore, benefits from easy access and certification by the ERP giant.

Platforms like Samsung VXT or PPDS’s Prostore automate the sales process and generate new leads. While platform fees are due upon contract signing, they are considerably lower than other sales channels.

Promoting technology standards

In addition to the business model, platform models also bring standardization of interfaces. Not only Samsung’s own SoC platform – it’s likely that only partners with native Tizen support will be released for the platform – but also other industry interfaces for remote device management, analytics, payment service providers, as well as service and support, could be standardized.

For the industry, it would be a progression if well-documented and well-maintained open APIs were increasingly used. It would mean that fewer special solutions need to be developed and maintained.

Apart from Samsung Tizen, LG WebOS, ChromeOS, and Windows, there’s hope for a standardized Android and Linux interface instead of the numerous ones used today. Having fewer interfaces, compared to the current well over one hundred, would be beneficial. The rapidly increasing IT security requirements alone demand a small number of secure and certified protocols and interfaces.
Major service cloud providers like Amazon (AWS), Microsoft (Azure), and Google (Cloud Platform) are already ensuring increased standardization on the provider side and could also act as a sales platform. Digital signage providers already achieve significantly higher conversion rates when customers use the same service cloud platforms.

Who are future competitors?

Samsung is currently the first digital signage provider to actively offer its platform worldwide. Other visual solutions providers, such as PPDS (Philips) and LG, have similar concepts in development. Almost all relevant display and LED providers are working on remote device management solutions, and some are also developing often rudimentary CMS solutions. However, only a handful of providers will be able to establish large platform businesses, and not all of them will succeed.

Outside the digital signage sector, companies like Adobe with the Experience Cloud, Salesforce, SAP, Oracle as ERP providers, or IT providers such as Microsoft and Google could enter the market.

However, it’s probably too early for them to do so – for now, the industry is observing how Samsung VXT performs in the market.