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SAP Bets Big On IoT Platform Expansion, Takes Aim At Digital Transformation Applications

"This is the biggest move our company has made since SAP HANA," said SAP CEO Bill McDermott as he unveiled Leonardo to partners and customers in Orlando.

SAP unveiled an expanded version of its Leonard Internet of Things (IoT) system on Tuesday, pulling additional machine learning, artificial intelligence, big data analytics and blockchain technologies into the product.

As the new SAP Leonardo: Digital Innovation System was unveiled before some 30,000 attendees at the Sapphire Now conference in Orlando, SAP executives said the vendor is integrating the IoT system's capabilities with other SAP applications.

The company also took steps toward building an ecosystem around Leonardo by announcing new services for partners and developers to build custom applications that run on the Leonardo platform.

[Related: SAP Eyes Accelerated Cloud ERP Software Sales Through The Channel]

"This is the biggest move our company has made since SAP HANA," CEO Bill McDermott said Tuesday morning in his Sapphire keynote speech, referring to the in-memory database that has become the core of the company's product strategy.

When asked in a later press conference about Leonardo's potential, McDermott said: "I believe in the next 10 years this can be bigger than the SAP you're talking to today."

With the announcement, SAP elevated the Leonardo system beyond an IoT platform to become the linchpin of the software company's digital business innovation strategy.

"Your companies are actually now in the midst of re-inventing their business models," McDermott said during his keynote of the need for a system like Leonardo. During the press conference, he said SAP Leonardo would be the vendor's "overarching theme for digital business."

A key element of the expanded Leonardo portfolio is SAP Leonardo Machine Learning, a new toolset for embedding machine learning capabilities into applications, and a new set of machine learning enabled applications for corporate functions such as invoicing and customer service.

Also new is the SAP Cloud Platform Blockchain service for building applications and application extensions using distributed ledger technology. New big data, analytics and data intelligence capabilities round out the enhancements.

During the press conference Bernd Leukert, the member of SAP's executive board who oversees products and innovations, acknowledged that "there are a ton of [IoT] platforms on the market." But he said those platforms operate in silos whereas Leonardo has connections to SAP applications, giving it the ability to draw on application data and execute through operational applications.


SAP said it is committed to building a partner ecosystem around Leonardo and announced a strategic alliance with Deloitte Consulting, which will develop and deliver new services around Leonardo software. The systems integrator and consulting company already have several IoT practices in specific vertical industries.

"We really want to become a digital transformation thought leader," said Eric Monti, a Deloitte principal, in an interview with CRN at Sapphire, about the motivation behind the Leonardo alliance with SAP.

Deloitte will work with SAP to develop use cases for Leonardo and create microservices extensions to the platform, especially in such industries as finance and manufacturing.

In an interview with CRN, Rodolpho Cardenuto, SAP President, Global Channels & General Business, said he sees IoT opportunities for both new and existing SAP partners. Current partners with expertise with the companies ERP applications – and the business processes they automate – will find IoT opportunities, he said. Another set of partners could be the device makers, everything from mobile phones to industrial turbines and aircraft engines, which generate IoT data.

Several other SAP partners interviewed by CRN at Sapphire said they are starting to see interest in IoT from their customers. Navigator Business Solutions, a Salt Lake City-based SAP partner, has taken on a couple of pilot projects, said Ralph Hess, vice president of sales and marketing.

Itelligence, the NTT Data Group unit in Downers Grove, Ill., is starting to develop use cases for IoT for customers, including industrial manufacturers. "It's a great opportunity to talk to the business folks," itelligence North America's President and CEO Steve Niesman said, referring to line-of-business managers.

Another close SAP partner in the IoT ecosystem is OSIsoft, which develops the OSIsoft PI System, software for connecting sensor-based data and operations for real-time intelligence. OSIsoft is an SAP Select partner – meaning SAP resells its product under the SAP HANA IoT Integrator name.

In other Sapphire Now news, SAP unveiled two new initiatives: The SAP Cloud Trust Center, a public website that provides real-time information on the current operations and security of SAP cloud systems; and the SAP Transformation Navigator, a self-service tool that customers can use to align their business and IT strategies and provides guidance for utilizing SAP software in light of those strategies.

SAP also said it is expanding the co-innovation partnership with Google the two companies announced in March, to include certification of additional SAP products and applications, including the NetWeaver technology platform, on the Google Cloud Platform. The two also announced the global availability of the SAP Cloud Platform on GCP.

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