Proving the Business Case for the Internet of Things

SAP to invest $2.2 bn in IoT

William Payne
October 12, 2016

German enterprise software maker SAP plans to invest $2.2 billion over the next five years to develop new enterprise IoT technologies and services, scale up its services and support, and ramp up sales and marketing aimed at enterprise, logistics, transportation and industrial IoT. SAP has also announced that it is increasing its efforts in its distributed manufacturing initiative, a programme designed to develop and innovate new industrial 3D printing technologies and methods. The company is aiming to extend its relationship with logistics firm UPS, and attract new partners into the joint SAP-UPS programme.

The company also plans to increase its ecosystem of partners and start-ups for IoT related services, and increase its co-innovation activities, developing new products and services together with partner companies.

SAP has also acquired an IoT specialist developer, and is planning a global network of IoT research and development labs in Europe, the US, China and South Africa.

Commenting on plans to invest $2.2 billion in IoT market efforts over the next five years, SAP chief executive Bill McDermott said "With billions of connected devices, we now have the potential to reshape society, the economy and the environment. SAP HANA is the data platform we knew would unlock the Internet of Things. Today SAP is making another bold investment to help our customers seize the benefits of live business."

SAP's IoT investment plans will be aimed at developing business specifically in logistics, infrastructure, manufacturing and transportation industries.

To further its efforts in distributed manufacturing and 3D printing, SAP and its distributed manufacturing programme partner, logistics firm UPS, have launched a website with the aim of attracting more partners into the programme.

The SAP-UPS distributed manufacturing programme aims to integrate SAP solutions for the extended supply chain and Internet of Things with the UPS additive manufacturing and logistics network.

Customers co-innovating in the early-stage production environment to streamline supply chains and get products to market faster and more cost-effectively as part of their digital strategies include Airbus APWorks, Fast Radius, HP Inc., Krones, Linear AMS, Moog Inc., Sealed Air Corporation and Stratasys.

"The successful transition of 3D printing from prototyping to manufacturing requires integration with business IT systems. HP understands the importance of end-to-end integration to maximise efficiency and technology adoption and is joining the SAP co-innovation program to help bring this to life," said Scott Schiller, vice president, 3D market development, HP. "Powered by HP Multi Jet Fusion technology, HP delivers a manufacturing-ready solution for end-part production as well as an open software platform to connect to business IT systems. With leadership from SAP and collaboration with other innovators in the industry, 3D printing will more quickly move into mainstream manufacturing and streamline supply chains."

SAP has acquired PLAT.ONE, an enterprise-grade IoT provider that develops products to simplify the process of creating, deploying and managing complex IoT solutions.

Founded in northern Italy, PLAT.ONE provides expertise and technology to accelerate the availability of key IoT capabilities in SAP HANA Cloud Platform, such as advanced lifecycle management for IoT devices, broad device connectivity, strong IoT edge capabilities that work seamlessly with a cloud back end, end-to-end role-based security and rapid development tools for IoT applications.

SAP has also recently acquired Fedem Technology, a Norwegian company specialising in advanced engineering analysis. With the acquisition of Fedem, SAP plans to build an end-to-end IoT solution in which a digital avatar continuously represents the state of operating assets through feeds from sensors, replacing the need for physical inspection with a "digital inspection." Additionally, the solution is intended to consider complex forces in play and detect both instantaneous consequences of one-off events and long-term health effects of cyclic loads, making possible accurate monitoring of maintenance requirements and remaining-life prediction for assets.

SAP also plans to establish a global network of IoT labs to collaborate on research and IoT product development with customers, partners and startups.

SAP IoT labs are intended as lighthouse locations and primary access points for IoT research, development, proof-of-concept modelling and incubation, with IoT showcases, thought leadership, expertise and infrastructure for strategy and product co-innovation. SAP plans to increase investment in consulting and knowledge transfers with dedicated innovation adoption consulting and IoT universities at the sites.

Planned IoT lab locations include Berlin, Johannesburg, Munich, Palo Alto, São Leopoldo and Shanghai, with SAP and partner experts in areas of specific IoT focus native to each region, such as Industry 4.0, logistics, cities and digital farming.

The labs are intended to provide customers with access to co-innovation resources including design thinking experts and workshops, and interactive demos of IoT-related technology including autonomous systems (such as drones and robotics), IoT security, machine learning and 3D printing.