SAP Earmarks $2.2 Billion to Expand IoT Efforts Worldwide

As part of the five-year plan, the company also is buying two companies to help expand the IoT capabilities of the software maker's SAP HANA platform.


Enterprise software maker SAP will spend $2.2 billion over the next five years to build out its internet of things capabilities, and kicked off the effort by buying two IoT-related companies whose products will be folded into SAP's HANA big data platform.

Company officials this week said the money will be used to bolster its portfolio of IoT offerings, scale its services and support capabilities, grow the number of partners it works with and support startups in an IoT market that is expected to hit more than $237 billion by 2020. At the center of the IoT push is the SAP HANA platform, according to officials.

"With billions of connected devices, we now have the potential to reshape society, the economy and the environment," SAP CEO Bill McDermott said in a statement. "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."

The software maker is no stranger to the IoT. SAP two years ago unveiled an array of IoT applications on the SAP HANA platform that are designed to help businesses take advantage of the massive amounts of data that are being collected by the devices, systems and sensors that make up the internet of things. Earlier this year, SAP launched its HANA Cloud Platform for the IoT, which essentially extended what the SAP HANA database can do in conjunction with the company's Vora software to address the diverse requirements of IoT applications. The HANA Cloud Platform includes everything from controls in edge computing and connectivity management to device management, mobile enablement, analytics, dashboarding and predictive computing.

SAP's new IoT initiative extends the push to help business collect, analyze and act on the data coming from the multitude of IoT devices, officials said. That includes enabling organizations to gain live intelligence to make better business decisions, become more efficient, create new business models, and develop new products and services.

A first step in the five-year push was the acquisitions of Plat.One and Fedem Technology that will expand the capabilities of SAP HANA in the IoT space. Plat.One offers technologies that make the creation, deployment and management of complex IoT offerings simpler, officials said. They will add such capabilities as advanced lifecycle management and broad connectivity of IoT devices, security, tools to speed development of IoT applications and edge-of-network features that can connect back to a cloud back end.

Fedem's technologies will enable SAP engineers to build an analytics solution that will feature a digital avatar that enables organizations to get a continuous and up-to-date view of their various operating assets through sensors, essentially replacing the need for physical inspections with digital inspections. The offering also will give businesses information on when maintenance of the assets are required and predictions about how much longer the assets will operate.

Another part of the IoT initiative is what SAP officials are calling Industry 4.0 packages that will make it easier for manufacturers and other industrial firms to increase IoT connectivity in their environments to help monitor equipment and shop floor operations. Both Industry 4.0 packages will be supported by SAP's Distributed Manufacturing application, which enables organizations to use additive manufacturing 3D printing services.

SAP will introduce a third Industry 4.0 package—which officials call the "advanced" package—at a later date. The third package will add such features as advanced manufacturing insight and controls, machine learning and predictive analysis. Other IoT packages will target digital operations for cities, agricultural operations and the energy industry.

SAP officials also are planning to create IoT labs around the world to give customers, partners and startups places to do everything from develop and incubate proof-of-concepts and collaborate to gain access to SAP experts around strategy, infrastructure and innovate. The labs, which also will feature interactive demos of such IoT technologies as drones, robots, security and 3D printing, will be located in such cities as Berlin; Munich; Palo Alto, Calif.; Shanghai; and Johannesburg, South Africa.