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SAP Leonardo IoT bridges gap between IoT and transactional data

SAP wants to stake a claim in IoT with SAP Leonardo IoT and integration with Microsoft Azure IoT Hub, but observers call the announcement more marketing exercise than anything.

SAP is prepared to bridge the worlds of IoT device data and business systems data and processes with SAP Leonardo IoT, a toolkit the company talked up at Mobile World Congress in Barcelona, Spain.

"IoT is all about physical objects and how they interact with each other and business systems," said Elvira Wallis, senior vice president and global head of IoT at SAP.

But analysts see the announcement more as a branding exercise than an unveiling of exciting functionality. SAP is battling confusion around its IoT technology, which the company branded SAP Leonardo in 2017 as part of a "digital innovation system" that includes not just IoT, but other emerging technology, such as machine learning and blockchain.

SAP's pitch to customers

SAP Leonardo IoT consists of three main focus areas, Wallis explained:

  • The first is embedding IoT technology directly into line-of-business applications.
  • The second is extending existing business applications with IoT technology.
  • And the third is unlocking potential innovation for companies to develop new business models based on data generated by IoT technology.

Wallis also described SAP Leonardo IoT as evidence of SAP's commitment to the industrial IoT (IIoT), adding that it's intended to help organizations develop applications that use cutting-edge technology, such as machine learning.

Elvira Wallis, SAP senior vice president and global head of IoTElvira Wallis

About 77% of the world's business transactions go through SAP systems, according to Wallis, so it makes sense to marry this data with IoT data.

Wallis characterized SAP Leonardo IoT as an IIoT platform, but she maintained that it has broader application than other major IIoT platforms, such as GE Predix, Siemens MindSphere, or PTC ThingWorx, that are tied to specific industrial products and come from a manufacturing point of view. SAP Leonardo IoT can be used by a range of industries, from retail to oil and gas production. It also acts as a platform for independent software vendors, partners and customers to build or extend IoT applications.

"We don't produce tools and machinery," Wallis said. "We produce customer experiences, so our applicability is not tied to our industrial production."

Nothing new in SAP Leonardo IoT

Holger Mueller, vice president and principal analyst at Constellation ResearchHolger Mueller

There's nothing new in the announcement of SAP Leonardo IoT, as it doesn't amount to much more than the repackaging of an existing brand, according to Holger Mueller, vice president and principal analyst at Constellation Research.

SAP Leonardo was originally the brand for SAP's IoT platform when it was launched in 2016. SAP rebranded the platform as a digital innovation system in 2017 for all of its next-generation technology, like AI, machine learning and advanced analytics -- a move Mueller called a mistake.

"You should never reuse a smaller brand -- that was just for IoT-- for something bigger, like all of SAP's next-generation technology, other than SAP Cloud Platform," he said. "Now, they have not much to announce, so they bring IoT back to Leonardo, and it's just more confusion for customers. In essence, they announce something that was always the key value proposition for SAP, that is better [integration of] IoT with business data. The product is real and just gets discredited with shenanigans like this."

There is a case to be made for SAP Leonardo IoT as business use for IoT sensor-based data grows. But there are questions as to whether companies will turn to SAP or other players for an IoT platform, according to Jon Reed, co-founder and principal analyst of the technology news and analysis site Diginomica.

"SAP still has an uphill battle to establish authority as an IoT player," he said. "They have established quite a few customer use cases in this area, so I'd say they are in the game, but they have a lot to prove and to earn. If they can establish their value as an overall data platform -- ERP and beyond -- then IoT fits into that."

However, Reed said he also believes there's not much new in SAP Leonardo IoT, calling the display at the Mobile World Congress a "branding exercise."

"It's another shuffling of Leonardo and next-generation components," he said. "Since no one understood Leonardo, they must sharpen the positioning. But there is some meat on this bone -- much more than, say, blockchain in my opinion."

SAP Leonardo integration with Microsoft Azure IoT

While analysts found little in SAP Leonardo IoT to talk about, SAP's Wallis did highlight new functionality. The toolkit can now be integrated with Microsoft Azure IoT Hub, according to SAP. SAP customers can use Microsoft Azure IoT Hub to manage IoT device data, and they can use SAP Leonardo IoT to integrate this with business data. Telemetry data from Azure IoT Hub is relayed to SAP Leonardo IoT, where it is combined with data from SAP business applications, according to Wallis.

"This intelligently combines the telemetry data [from Azure IoT Hub] with SAP business applications or with SAP experience data from Qualtrics to drive new business models or change customer and product experience," Wallis said.

In addition, SAP Leonardo IoT's edge feature enables customers to deploy data where it makes the most sense for them -- locally on top of Microsoft Azure IoT Edge runtime or fully in the cloud, according to Wallis.

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