SAP has announced a new program to help companies jump start their Internet of Things (IoT) projects. IoT is one of the many trends that analysts believe will see growth in customer solutions. Mike Krell, an analyst at Moor Insights & Startegy wrote in Forbes recently that 2017 will see a growth in the use of IoT. He also added that the number of vendors may contract. SAP wants to get a lead on its competitors. It is also looking to ensure its plans to invest €2 billion in IoT over five years is not wasted. The intent is to get customers working with the SAP IoT portfolio, codenamed Leonardo.
Addressing the challenge of IoT
For many companies the sheer scale of IoT is daunting. There are multiple challenges to implementing a solution and many falter at the first hurdle. This announcement sees SAP list several of its products customers can use as to enable the adoption of IoT. SAP has named Leonardo as the vehicle customers will use to go on their IoT journey. It has announced new initiatives aimed at starting it up.
Dr. Tanja Rueckert, executive vice president, Digital Assets and IoT, SAP commented: “Moving from things to outcomes is about new business processes such as Industry 4.0, new business models and new ways for people to live and work.
“With SAP Leonardo, we connect ‘things’ with business processes that are instantaneous and proactive, and with people who can manage more effectively with augmented intelligence and autonomous systems. Our SAP Leonardo IoT portfolio delivers on SAP’s commitment to produce superior business value through enterprise IoT innovation.”
The announcement by SAP consists of three components to the program.
SAP announced the introduction of a consulting service manned by line-of-business and industry experts. This service identifies IoT projects that align with business strategies. It helps customers develop a business case for an initial pilot project. This will then lead to a full scale IoT strategy and deployment. SAP already has initiatives for IoT in several industries including manufacturing, automobile, predictive maintenance and asset management. This consulting process has three phases each lasting approximately three months.
Phase one is an exploratory workshop in which SAP experts seek greater understanding of the strategy and identify areas of the business where IoT is applicable. This is followed by phase two which creates a prototype which helps to develop a business case and supporting business process changes. Finally, phase three expands the prototype into a pilot project from which the full IoT roadmap for the future is developed.
In condensing this down to a three month project, SAP recognizes that companies today need flexibility at speed. Pilots do not always work. It is likely that some of the companies using the consulting service will already have tried a pilot project. This new pilot will be developed using insights from the first that delivers the true business value. This is why the introductory pricing that SAP are offering is interesting
SAP is introducing a fixed price service for software and services. It covers the pilot and the first year of software and services usage. This will enable customers in some industries to properly evaluate the cost and benefits of an IoT project without the risk of cost escalation. Cost savings achieved in the first year can then be measured against the flexible cost basis that will hit them in subsequent years. Usage costs are fixed for four of the SAP Leonardo IoT solutions: SAP Connected Goods, SAP Vehicle Insights, SAP Predictive Maintenance and Service and SAP Asset Intelligence Network.
Whether this includes all the SAP costs though is not clear. Costs for data storage do not appear to be included. What is sensible is that this pricing is fixed for a year. Companies will have the ability to experiment with more than one pilot during this time (though additional costs are likely).
The Leonardo portfolio includes six solution streams. These are:
- Connected products
- Connected assets
- Connected fleet
- Connected infrastructure
- Connected markets
- Connected people
IoT user conference
SAP will also host its first global SAP Leonardo event. The event takes place in Frankfurt from July 11-12, 2017 at KAP EUROPA. SAP expects customers, partners and IoT experts to attend. It will be an opportunity to see, discuss and share IoT experiences with peers and SAP consultants. Full details are not yet available.
This is a smart initiative by SAP as it looks to grow its share of the IoT market. Companies do not have the expertise to create and initiate IoT projects themselves. SAP are focusing on the business rather than technical benefits to the company. In doing this they should attract the interest from board members rather than IT executives.
For companies looking to invest in IoT, SAP is providing a low risk, low cost option that could prove attractive. It will hope to capture the longer term business from those companies as they invest in SAP technology.