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How does the SAP IoT marketing hype compare to the reality?

SAP IoT offerings range from a 'foundation bundle' and cobranded gateways to applications for verticals including energy and logistics. Are they ready for prime time?

SAP is busy trying to make sense of internet of things strategies for its customers while also figuring out where it can do its best, most valuable work. The resulting SAP IoT offerings run the gamut from the tangible -- cobranded gateway hardware, industry-specific applications and HANA-based data architectures -- to less-tangible "frameworks" for tying sensors to business needs, and partnerships for piecing together connectivity around the world.

"Because IoT is such a deep and wide topic, we have created a framework we call 'things to outcomes,'" said Nayaki Nayyar, general manager and global head of IoT and innovation go-to-market at SAP.

Things are sensors, devices and IoT architectures while outcomes are the business benefits. Not surprisingly, SAP's primary effort is to help its customers with their business applications so they can deliver use cases that actually provide immediate value beyond collecting data.

"This year we are primarily focused on manufacturing, transportation and logistics, energy and natural resources, and consumer products. Those are the four industry verticals we have with outcome-based IoT applications," she explained. "All of our IoT applications are powered by our IoT platform, which is an extension to our core HANA platform, which can run in the cloud or on-prem."

Next year, the vendor says it expects to offer SAP IoT outcome-based applications for healthcare, insurance, cities and agriculture. These applications are designed to provide analytics that can make sense of IoT data as well as help companies act on it.

More than outcomes: SAP IoT foundational elements

While the business case is critical to IoT success, SAP says its customers are also looking for help with their IoT connectivity and middleware layers.

Earlier this year, SAP released a new IoT foundation bundle for HANA, designed to assist organizations with IoT data management. The bundle helps organizations filter, aggregate and correlate data; store it cost effectively; and use SAP HANA Vora for big-data analysis. The vendor also includes its SAP IoT SIM management connector for HANA, which is for managing the connectivity of cellular IoT devices.

The SAP IoT foundation bundle works closely with SAP's new IoT intelligent edge processing bundle for HANA. The edge processing bundle consists of an edge database and sync client as well as SAP Plant Connectivity software.

Why IoT is so hard

Compared to recent disruptive tech movements such as mobility and the cloud, the scope of the internet of things is arguably much broader and deeper than cloud and mobile combined.

First, the sheer numbers of potentially connected sensors. Pick any of the latest estimates from any analyst firm and you'll see a number that is "tens of billions of sensors" followed by a guess at a year. Billions of IoT sensors are getting placed in everyday consumer devices, such as clothing, vehicles and tools.

Much of the data will travel over some form of mobile network. To make sense of it, the IoT will also use a heavy dose of cloud computing to connect and scale. The architecture is further complicated by gateways designed to sit far away from an organization's servers -- but which start the analytics process where bits of data are collected from devices at the "edges," which they then crunch before passing a subset onto the heavy-duty analytics applications that are supposed to turn sensor chatter into something usable.

"Because none of this stuff is standardized yet, big companies are going slowly on adoption," said Roger Kay, principal analyst of Endpoint Technologies Associates, adding that IoT presents "a nontrivial problem to connect the stream of data from remote devices to larger corporate systems of record."

Meanwhile, beyond SAP's analytics and connectivity software, SAP users still need sensors, devices and hardware to build out their IoT architectures.

Enter SAP IoT partnerships

Nayyar said SAP has been actively partnering with sensor and device manufacturers to get connectivity, while also partnering with gateway providers to make sure SAP's "intelligent edge" software is embedded into gateways to filter and only deliver useful data into SAP's applications.

SAP and Dell are combining Dell's intelligent Edge Gateway 5000 with SAP software for IoT, which will let some IoT data processing occur before it ever reaches HANA. SAP is also working closely with Hitachi, OSIsoft, Cisco, Intel, and Siemens. "We're having discussions with GE now," Nayyar noted.

There is more, though: SAP is also partnering with telcos around the world to ensure that IoT connectivity is enabled in key regions. This is especially important for "track-and-trace" IoT efforts for companies trying to keep track of assets or shipments in the field.

Still, a big challenge for SAP's customers is figuring out which sensors, devices, and IoT solution providers to commit to.

"The market is fragmented, especially at the bottom of the stack -- there are so many players, sensor technologies and connective technologies," she explained. "There is a lot of noise."

Consequently, part of SAP's IoT mission is to help its customers choose, which is much easier once SAP has a strategic partnership in place that can help smooth IoT implementations. "We approach it very much by industry by looking at standard use cases to get benefits before exploring others," Nayyar said. "We start with the outcome layer ... and then we bring in partners to help with the connectivity layer to create an almost one-stop shop."

In addition, SAP has created an Internet of Things Consulting Services team that can help enterprises in any stage of their digital transformation. Services range from helping build roadmaps to proof of concept or even rapid deployment services. Most of SAP's IoT engagements so far are custom efforts, taking into account variations in sensor type, connectivity layers and differing business goals.

Overall, the journey to large-scale IoT adoption is far from an overnight flip, said Frank Gillett, vice president and principal analyst at Forrester Research.

"I think the hype around internet of things is correctly helping us understand this will be a big deal in the long run. However, it's going to be a lot slower and more complex than we're used to," Gillett said. "There is no single technology, no single standard -- and there never will be. There are many different use cases that will involve fundamental organizational changes, including new business models with customers that will evolve over time."

Next Steps

Read more on the IoT and SAP

Learn about SAP SQL Anywhere IoT features

Understand HANA deployment

This was last published in July 2016

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How complete are the SAP IoT products and services?
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Good information summarizing the challenges and broad road-map for IoT.
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