SAP IoT Executive Talks About SAP Leonardo, Its $2.2 Billion Investment In IoT And Partner Opportunities

SAP Doubling Down On IoT

Over the past few months, SAP has quickened its charge into the Internet of Things market, in September pledging to invest $2.2 billion in the next five years to accelerate development of its IoT solution portfolio, increase sales and marketing, and grow its ecosystem of partners and startups in the IoT market.

More recently, the company followed up on that promise with the announcement of SAP Leonardo, a new product portfolio that combines adaptive applications, big data management and connectivity in packaged solutions for various lines of business.

CRN talked with SAP senior vice president of IoT and Extended Supply Chain Hans Thalbauer about the company's efforts around the IoT market – and how the channel fits in.

Talk about SAP's September announcement surrounding the company's $2.2 billion investment in the Internet of Things.

In September we announced SAP's deeper investment in the Internet of Things. We are investing in three areas – building solutions and IoT platforms; making smaller acquisitions in areas where we need additional innovations; and then building out the IoT labs. These labs are focused on working very closely with the customers. We're focusing on core innovations while working with partners and building out technical solutions for IoT.

Tell us about SAP's newly announced Leonardo portfolio, which was unveiled Jan. 10.

The IoT portfolio is called Leonardo – the name actually relates to Leonardo Di Vinci – standing for innovation and changing the way people are thinking. We think IoT has the potential to change the way business processes are set up and business models are being executed. It's a very strategic topic for us.

With Leonardo, we have introduced a portfolio that is structured to cover the Internet of Everything. There are three categories in this portfolio focused on industrial IoT – connected products, connected assets and connected fleets.

But then we go beyond to really cover the Internet of Everything with connected infrastructures, connected cities and markets, and also connected people. It's very important to include people as the center of IoT solutions.

How does SAP Leonardo Bridge help your customers jump start their IoT investments?

SAP Leonardo connects the things with the processes and the people. But we also announced a jump start program, SAP Leonardo Bridge, which helps companies to adopt these solutions very fast and rapidly. These changes are happening now, not in the future. All companies are going through digital transformation, so we have a very specific offer for companies to adopt IoT capabilities as part of their digital transformation strategies very fast.

Talk about your partnership ecosystem around IoT with other vendors, like GE and PTC, for example.

We are convinced we need to have a very broad ecosystem, so we are completely open to work with everyone – not only the software or technology partners, but also the business partners. We are looking into completely new partnerships – for example, we have a partnership with UPS about 3D printing as part of our distributed manufacturing early adopter program [which connects the manufacturers to the global network of industrial 3D printing service providers with on-demand production capabilities and global logistics networks].

Then we have partnerships with GE, Siemens, Bosch [and] PTC. And these partnerships help provide solutions for customers. In some cases, we're connecting with other platforms to get the data [and] generate the business processes for customers.

What's the role of ERP and application development in SAP's IoT strategy?

If you look at SAP's solutions. which I mentioned, like connected goods or predictive maintenance, these are combining adaptive applications. But then, we also introduced SAP Leonardo Bridge, which connects these adaptive processes with the business processes on the ERP side. So when there is an issue, machines are tied into your ERP file – so not only can machines predict something is wrong, but they also can tell you what kind of alternative options you have, and what costs more versus less.

What role do SAP channel partners have in IoT?

Every single partner we are working with and talking with is interested in IoT. Everybody knows it's not just hype, it is having a significant impact in the market and has huge value for the partners. There is not a single partner who is not looking into IoT – and many of them have already invested heavily and have practices built.

What skills sets should SAP partners hone to build out their IoT practices?

What is very much in demand is the people who have an understanding of the business processes and a combination of the technology. It's not good enough to only understand how you manage your data, or the platforms, or how to connect to the data – you need to bring that into the context of the business process to make the highest possible business impact.