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January 2, 2015

SAP on the future of the Internet of Things

Dinesh Sharma, SAP’s VP of Marketing, Internet of Things, tells CBR about strategy, competition and the impact of the ‘Networked Economy’.

By Amy-Jo Crowley

CBR Q: What is the ‘Networked Economy’ and why does it matter?

The number of connections between people, applications and devices such as smartphones, wearables and appliances is expected to reach more than 70 billion by 2020. The rich flow of information between these connections will transform our society and boost the economy.

This represents the next economic revolution – the networked economy. It is already opening up new opportunities for businesses, driving innovation and growth across industries, and transforming society.

CBR Q: Is it not just another marketing term for financial growth coming from the IoT and other networking developments?

Economic revolutions are characterised by technological advances that have driven major shifts in both the way businesses operate and how people live. These shifts have occurred throughout history. Firstly with the industrial revolution; driven by the steam engine, mass production and broader distribution flourished. Secondly, we saw the impact of the IT economy, fuelled by advances in computing availability and leading to greater convenience and capability in the workplace. Most recently the Internet economy has not only changed the way people and businesses work, but enabled whole new business models to form.

The networked economy is certainly not just marketing jargon – it represents another fundamental shift in the way people and businesses operate. The Internet of Things (IoT) is not the same as the networked economy; rather, it is a key enabler of the networked economy.

CBR Q: What are the main drivers of the Networked Economy and what kind of businesses can thrive in it?

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The networked economy is underpinned by advances in big data analytics, network infrastructure, sensors and connectivity technologies. From retail and banking, to manufacturing and sport, organisations that are able to digitise and collect data from devices, equipment, employees and customers will be able to thrive in the networked economy.

The sports industry in particular is making great use of these technologies. FC Bayern Munich is integrating big data analytics across the organisation to capture more fan insights and react accordingly to grow customer loyalty. Data analytics technology is also boosting the team’s performance on the pitch, with sensors mapping players’ movements and instantly evaluating millions of sets of data points to help evaluate patterns of play. Even stadiums are becoming smarter. The MetLife stadium in New York encourages interaction with fans, allowing them to watch replays and check performance statistics, which ultimately improves the audience experience.

Retail is another sector that can thrive in the networked economy, and eBay is an excellent example. Using SAP HANA data analytics technology, eBay is able to monitor trading in its marketplaces and run analyses that confidence score trades, or detect unwelcome activities to provide a better customer service.

CBR Q: To what extent is SAP’s HANA cloud platform currently enabling the Networked Economy? What other tools are at the core of it and why?

The cloud is a key enabler of the networked economy. The vast and growing volume of data that the networked economy is built upon requires a platform that can adequately store and retrieve information in near-real time. Legacy databases simply do not have the required speed or ease of use to make the networked economy flow. SAP’s HANA cloud platform is capable of realising the true potential of collective insight, simplifying the complexity of such large caches of data and drilling down into what is business-critical.

CBR Q: How are you finding competing against Oracle’s, Microsoft’s and IBM’s in-memory products, which are becoming increasingly popular in the space?

Our competitors certainly all have their own versions of in-memory products but HANA is different. This opportunity to combine different types of data sets is where the real differentiation lies.

From a basic speed perspective, HANA remains a leader in the in-memory market, but even if the competitors do catch up, the HANA platform includes geospatial, predictive graph engines that are rooted into the database, and their usage is being embedded into the next generation of business applications that will power an array of predictive analytics tools.

CBR Q: Data protection authorities have agreed that data generated by Internet of Things (IoT) devices should be "regarded and treated as personal data". To what extent do you agree and is SAP addressing this?

The question of personal data and privacy is – and should – always be discussed at length in relation to data generation and collection. SAP is committed to delivering solutions that help businesses run smarter – our heritage is in delivering business critical systems and security has therefore always been at the forefront of our agenda. That said, businesses themselves must also consider the consequences of not handling personal data with sensitivity.

CBR Q: Some have argued that there are too many standards, players and ecosystems to connect the billions of devices and applications together. To what extent do you agree and how is SAP addressing these challenges?

At SAP we offer open platforms and true collaboration with our partners, our partnerships with the ecosystem of device and connectivity suppliers makes it easier for customers to adopt. Simplicity is at the heart of what we do and part of this is ensuring businesses have all the capabilities they need to succeed in the networked economy. The SAP Startup focus is a global programme helping promising start-ups in the big data, predictive and real-time analytics space. The programme aims to go give flexible access to HANA, providing businesses of all sizes with the knowledge they need to leverage SAP HANA in the ecosystem of connected devices.

CBR Q: Are there any other challenges and if so how can they be overcome?

For SAP to help businesses embrace the networked economy and benefit from the great opportunities it presents, businesses must first understand the reasoning for doing so. The reality is that many organisations remain split between analogue and digital technologies.

The Hamburg Port Authority is a great example of how an organisation can quickly embrace the networked economy – once they know the reasoning behind it. The Port Authority is responsible for overlooking the logistics at the second largest port in Europe. With a current turnover of 9 million containers per year – expected to rise to 25 million by 2025 – space is increasingly at a premium. The need to increase productivity without significant changes to the existing port infrastructure led the Port Authority to develop the Smart Port Logistics programme.

Built on the SAP HANA cloud platform, the programme has allowed the Port Authority to migrate data from logistics companies, parking terminals and traffic controllers to build a complete view of the port, which can be offered to truck drivers and carriers via mobile devices. The programme is helping to decrease idle time, increase productivity and reduce costs whilst allowing for increased container turnover without any physical change to the port infrastructure.

CBR Q: How else is SAP looking to develop in the Internet of Things space?

The Internet of Things space is an area that SAP is continually looking to invest in and develop. Just recently at SAP TechEd, we announced three new IoT solutions, including the SAP Predictive Maintenance and Service solution, SAP Connected Logistics software and the SAP Manufacturing Execution application. These HANA powered solutions are designed to bring smarter, quicker and more complex processing to IoT devices as the networked economy continues to gather pace.


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