Connect the device data to the business processes
Munich, Mai 5, 2017
SAP is one of the world's leading software producers. In the first four decades since its founding in 1972, the focus was on software for the integrated planning and control of all business processes of a company. The Internet of Things (IoT) now changes business models and processes of the customers. And SAP answers with its own platform and a whole range of new solutions. In the coming years it will be a matter of fusing the new with the old.
The basis for this article was a detailed discussion with Thomas Ohnemus (all pictures SAP), VP Global Marketing for the Extended Supply Chain and IoT. The article was released by SAP and reflects the position and strategy of the company.
Created basis: Standardized business processes
45 years after foundation SAP is the world's leading software provider with 84,100 employees in 130 countries, 345,000 customers in more than 180 countries, and more than 15,000 partner companies. More than 22 billion euros in sales in 2016 show that one of the pioneers of digitization of the economy has so far done a lot correctly. And 110 million cloud subscribers are proof that the next stage of the use of software has long been ushered in.
SAP has helped the economy worldwide standardize the processes. The business with this enterprise software now to be transferred to the cloud is one of the urgent tasks. The other is a response to the challenges facing everyone: the Internet of Things is flooding enterprises with data from the use of end products, devices and machines, and only those who know how to combine this data flow with their processes and their business models, have a chance of success.
Support for business processes is no longer sufficient. It is primarily based on the generation of data that documents the individual process, its costs, its results and its processes, what experts also describe as transaction data. To control the processes with such data is today standard, of course also in the industry. Decisive competitive advantages are achieved in completely new fields.
With sensors, actuators and other digital devices, data can be gathered from the use of products via the Internet and cloud, which must now be converted into values. In the last few years, SAP has developed an IoT platform to condense this data to information and knowledge that can be used to provide innovative services. Over the next five years, the company plans to invest another two billion Euros in this area. The IoT market, and this is the base of numerous studies, should already have the volume of a three-digit bill of exchange in just a few years. SAP has seen this challenge and the opportunity it presents in it years ago and is in the middle of the realization of appropriate solutions.
SAP Cloud Platform
The SAP Cloud Platform is an important basis for the solution offer. It was first known under the name SAP HANA Cloud Platform. A central component of this Platform as a Service (PaaS) introduced in 2014 was the SAP HANA technology of in-memory data processing, ie the very fast calculation of large amounts of data almost directly in the working memory of a system in real-time. HANA is still an important component of the platform, but using this SAP technology as part of the name would not reflect the actual openness to other platforms and systems. For example, the SAP Cloud Platform Virtual Machines introduced in November 2016 allows to set up comprehensive solution landscapes, add workloads that are based on existing on-premise software, and now run directly on the SAP Cloud Platform.
The platform serves both large areas of the SAP portfolio and connects them via the cloud: the standard software for business processes and the new applications on the Internet of Things. At the end of February 2017, it was presented at the Mobile World Congress in Barcelona.
On the one hand, it allows the development of cloud applications for functional expansion and integration of the systems used by customers. On the other hand, it is also the basis for completely new applications that can result from the connecting of smart products with the Internet. From this perspective, the eye-catching acquisitions of the past few years were well-thought-out basic building blocks of a company strategy, which now determines a thoroughly changed market presence of SAP.
SuccessFactors added a pure cloud offering for talent management and other parts of human resources management for 3.4 billion Euros in 2011. In 2012, the platform Ariba for business handling in the cloud followed for 4.3 billion. For Concur, which provides travel planning and travel expense accounting in the cloud, SAP 2014 invested 6.5 billion. These acquisitions allow SAP to open up a company-specific path from traditional IT implementations to solutions in the cloud. The solutions can be interrelated with or without data matching, transformation of partial solutions into the cloud, or even complete migration.
A completely different takeover was that of the Swiss company Hybris. This is a technology that now as SAP Hybris as a Service, or YaaS, provides to its customers and partners the opportunity to develop cloud solutions in the form of microservices. This is the name of small apps that run at runtime with other apps from potentially different manufacturers, rather than treating them as the functions of a more comprehensive monolithic program. For example the processing of a basket of goods and sending it over the Internet.
So now the SAP Cloud Platform is here. It bundles a whole range of services with which customized solutions of almost any type can be built. The Software Developers' Kid (SDK) for iOS, for example, allows the development of enterprise applications for iPhone and iPad. The SAP API Business Hub, to name another example, provides a catalog with APIs for SAP applications. Ongoing additions are new APIs for SAP S/4HANA Cloud, Mobile Service and SAP Localization Hub or Tax Service.
The SAP Cloud Platform IoT service, in turn, is a kind of device management and supports over 40 device protocols. It enables companies to instantly recognize IoT devices. Together with SAP Cloud Big Data Services, tools are available that enable customers to tackle their new IoT business.
The transfer of computing work to the outermost edges of a network is what experts call edge computing. The Internet of Things, which tends to make all things of this world to endpoints of the network, cannot produce meaningful services, if all conceivable data would have to be transported constantly between the things and any computers over public networks. Apart from the fact that the calculation took too much time, the network itself would be permanently overloaded. Therefore it will be a big challenge for IoT providers to do as much data analysis as possible on the device itself. This is one of the key challenges for SAP to support its customers: to make edge computing easier for future products.
Artificial intelligence and machine learning are two concepts that have recently come to the forefront of industrial application in the width and are no longer exclusive topics of research and science fiction. Computing performance, storage capacity (not least via the cloud) and miniaturized digital components such as cameras, microphones and sensors are now the basis for teaching any kind of thing to see, hear and feel. And this means: learning. Simultaneously with the presentation of the SAP Cloud Platform the provider also presented SAP Clea. This is intended to make machine learning an integral part of the IoT offering.
Leonardo – the SAP IoT Portfolio
Over the last few years, SAP has laid the foundations for supporting the IoT activities of its customers. At the same time, a number of customers worked together on individual solutions, which are now standard software on the market, such as SAP Predictive Maintenance and Service. On January 10, 2017, SAP launched the SAP Leonardo brand. It stands for the SAP IoT strategy and the SAP IoT product portfolio. IoT solutions include three main components:
- The SAP Leonardo IoT platform for the connection of intelligent products and for the administration and analysis of large amounts of data
- A wide range of applications with business-specific solutions. This solution provides intelligent algorithms for the analysis of large amounts of data and for the use of the knowledge gained in business processes.
- The SAP Bridge as a roll-specific, cross-application user interface
The SAP Leonardo applications are divided into six categories, depending on the things involved in their networking, because the SAP Leonardo portfolio supports industry-specific IoT scenarios. The focus is always on what makes the Internet of things different from the current world of products: the connectivity.
Connected products: All sectors need a new approach for the design, manufacture and delivery of intelligent, connected consumer goods. The connecting of products stimulates the manufacturers' imagination. Red Bull, for example, distributes the beverages among other things through its own beverage machines, which are now connected. And suddenly causes of good or bad sales can be fixed on many things which have hitherto been perhaps not taken into account in the preparation, but mostly not at all. How does the use of the beverage machine depend on the temperature at the location in the building and outside, as with the weather and the seasons? What are the differences between the places of placement? Can the machine be switched off at certain times without decreasing the sales? The solutions developed with SAP will provide answers to such questions.
Connected plants: Through networked sensors on machines and production facilities, in factory halls and company buildings, companies will be able to retrieve, in real-time, all the essential information they need for optimum use, to conserve resources and save energy, to avoid downtimes and to reduce operating costs, to speed up production and improve logistics. The customer Kaeser has found the way to the new offer Sigma Air Utility via SAP Predictive Maintenance. The knowledge about the processes installed with their compressors at the customer allowed the manufacturer, as an alternative to the purchase of the compressors, to offer the purchase of guaranteed high-availability compressed air. The compressors are then sold to a leasing company and leased by Kaeser to operate them at the customer's premises.
Connected fleet: Whether a fleet management of a logistics company or the use of company vehicles by the employees, the networking of the vehicles and their drivers with the company allows a noticeable optimization of the affected processes. In the worldwide attention-grabbing project with the port of Hamburg, in which SAP was involved alongside T-Systems and others, this was impressively demonstrated. Waiting times and traffic jams were minimized, while at the same time the goods turnover could be accelerated considerably. The capacity utilization of the port capacities could be increased without an enlargement of the port area.
Similarly, SAP has identified three other areas of application in which solutions are being worked out with customers. Connected infrastructure: Through digital networking, for the physical infrastructure systems, from the energy supply to the urban car parks to the public transport system, are offered new possibilities. Connected markets: This is all about the support of regions, cities or rural areas, but also about defined markets such as shopping centers that enable new services to be networked. Information about the state of a city, a region or a farm site also allows optimized services. The aim is to create conditions for digital agriculture, intelligent ports and smart cities. Connected People: The employees of the company, people in the smart home and in their free time, cooperation and life in the community are experiencing perhaps the greatest change through IoT through networking, social networks and ubiquitous use of mobile devices.
The Role of SAP in the IoT Ecosystem
In the described parts of the build-up portfolio, it is clear that the boundaries therebetween are not rigid. The connected products of the automotive manufacturers also play an important role in networked transport infrastructure, as they play an important role even in the connected vehicle fleet. Just as here, the IoT so far often clear delimitations appear less and less meaningful, so the role of the players in the IoT changes on the side of the IT providers.
At the end of 2016, SAP signed a long-term strategic technology partnership with Bosch. SAP contributes SAP HANA to the Bosch IoT Cloud, and Bosch provides its IoT Microservices on the SAP Cloud Platform. In the summer of 2016 the closer cooperation with Microsoft was announced at the customer conference Sapphire in Orlando. Both manufacturers want to support HANA on Microsoft's Azure cloud infrastructure. Also last year, it was announced that SAP and IBM Watson IoT are working on a closer linking of SAP HANA with IBM's artificial, analytical intelligence at two joint development centers in Walldorf and Palo Alto in Silicon Valley. Already in 2015, SAP had announced a deepening cooperation with Google. This included the use of a wide range of mobile SAP applications on any Android device, by linking the SAP Cloud Platform to the Google Play services.
The collaboration with Apple for the availability of SAP applications on the devices of this manufacturer has already been mentioned. With Amazon Web Services (AWS), there is also a cooperation to provide SAP solutions in the AWS cloud. In short: the clear competitive conditions a few years ago have been given way to an almost continuous coopetition. SAP integrates its own platform and, conversely, uses the special offers of other providers for its own portfolio. The Internet of Things creates a new ecosystem. Important is what the customer gets offered. It is only secondarily that the provider has made an important contribution. This change in the market approach has already been implemented very successfully by SAP.
On March 25, 2016, the New York Times published an article entitled "The Race for the Control of Artificial Intelligence and the Future of Technology has begun." Relying on the technology analysts of the International Data Corporation (IDC), the market for applications with machine tools will grow to US $ 40 billion by 2020, with 60% of these applications being deployed on Amazon, Google, IBM platforms And Microsoft. SAP was not mentioned yet. But the way in which this vendor enters into this new business could soon change the ranking.