When ERP giant SAP bets on a new technology, other software developers are impacted.
SAP is a dominant IT force among the world’s companies. The German ERP and PLM player’s software forms the backbone of an overwhelming proportion of global corporate IT processes. The numbers are staggering: 76 percent of the world’s transactions run on an SAP system, totalling about $39 trillion in global commerce. This is why even the largest players in the PLM space sometimes find it more fruitful to build bridges to SAP solutions, rather than compete with them.
SAP’s in-memory technology, HANA, is a relevant example. It’s a relatively new “database” management system that has proven to be very powerful when handling large amounts of data. Fast data processing on huge scales isn’t sexy, but it is critical to realizing the promise of big data. Together with new cloud technologies and business intelligence tools such as predictive analytics, HANA has grown from an “interesting technology” to being a preferred choice for installations of Industry 4.0 and IoT concepts.
ABOUT TO INVEST $2.2 BILLION IN IoT. The success of SAP’s in-memory database technology HANA, in the IoT context, has whet the appetite SAP CEO, Bill McDermott. This week the ERP and business IT giant announced a five year plan to bet $2.2 billion on Internet of Things (IoT) solutions. The company will launch a new product line, dubbed SAP IoT, which will combine large amounts of data from things connected to the Internet with machine learning and SAP's real-time database S/4 HANA.
“IT’S A COMPLEX WORLD and the secret to removing complications out of the equation is SAP HANA,” Bill McDermot said during a press conference. HANA is the main tenet in the German IT player’s arsenal. It’s designed to process high volumes of data in real-time, and it has proven very effective as it matured during the last couple of years. With new cloud technologies and BI solutions such as predictive analytics, it has become an attractive solution both for PLM developers and large enterprises such as Bosch betting on IoT and Industry 4.0 installations.
HANA can be connected to areas such as PLM, automation manufacturing systems, manufacturing execution systems (MES) and the like. So it is no coincidence that one PLM vendor after another is entering into partnership with SAP to benefit from HANA’s capabilities. But the interest in this technology goes beyound the PLM developers - large industrial enterprises with ongoing IoT initiatives and solutions are also betting on HANA.
SAP has recently announced two new partnerships pointing in this direction. The German industrial conglomerate Bosch declared that they will form an alliance with SAP as did PLM vendor PTC, deciding to run its IoT program, ThingWorx, on HANA. Siemens PLM already has a collaboration with SAP and HANA, While Dassault Systèmes bet on their 3DEXPERIENCE platform and their own version of IoT, which they call the Internet of Experiences.
The Internet of Things, in combination with the Industry 4.0 product realization and production concept, is steadily gaining ground. The idea of a seamless chain, including IT support for product development, manufacturing and aftermarket services is no longer just a theoretical model. Practical, functioning installations are already in place, an excellent example of which is Siemens’ electronics plant in Amberg, Germany.
From a PLM perspective, the point is that the developed products “themselves” can “tell” or advise on how they should be produced, assembled and what resources are required. This is done with the program code, which is attached to the 3D model for directly communicating specific production requirements to the machinery in this digital factory.
A CLOUD INFRASTRUCTURE BUILT ON SAP HANA. Siemens’ MindSphere is a new service concept to generate new business models for both end customers and OEMs. It is an essential element on the path to digital enterprise. MindSphere interlinks physical products and production facilities with digital data. It is a key element of the Digital Enterprise Software Suite, which is an important part of Siemens PLM’s solutions for IoT and Industry 4.0.
When Big Data Becomes Smart Data
Siemens has developed its Mindsphere platform, which is a Cloud infrastructure solution built on SAP HANA.
“We’re talking about enabling management of the large volumes of data generated during the production process,” said Dr. Ralf Michael Wagner, VP for Plant Data Services at Siemens AG. He continued: ”These data must be collected, saved and analyzed in real time, and turned into information which in turn allows for a whole new dimension of services that contribute to improved asset management and energy efficiency through data analysis and simulation.”
Mindsphere is an open IT ecosystem based on the SAP HANA cloud platform which customers and developers can use to develop, extend and operate applications in the cloud. OEMs and application developers can access the platform via open interfaces and use it for their own services and analyses – for instance, for the online monitoring of globally distributed machine tools, industrial robots or industrial equipment such as compressors and pumps.
Bottom line: a reliable cloud infrastructure is the foundation for when big data is converted to smart data, and Siemens claims that Mindsphere is such a solution.
JOINING FORCES WITH SAP AND HANA. In the Bosch IoT Cloud, the international supplier of technology services runs various applications for its connected mobility, connected industries, and connected buildings businesses.
SAP Brings HANA, Bosch Its IoT Cloud
The links with IoT and IIoT are important, not only from a control and regulation of factory production perspective, but also for the next step where the products are distributed to end users and are connected over the web to different types of services. Ideally, the lifecycle loop is closed when the data feeds back into the PLM system to inform future product innovation and potentially new services.
This is an attractive prospect, and as a result there are a number of strategic alliances formed for cooperation in the development of IT solutions to cover these needs.
One of the most interesting partnerships is the strategic alliance announced last week, between business software giant SAP and German industrial conglomerate Bosch. The idea is that together, the companies will expand their efforts related to cloud technologies and software solutions that support the IoT and Industry 4.0.
In a joint statement, the companies said that they aim to "develop solutions that can speed up manufacturing and logistics processes, and improve security, while helping to improve the product quality and services to end customers."
These are ambitious goals.
“They most definitely are. In order to make even better use of the major potential that connected industry holds, international companies must cooperate more closely than before,” asserted Bosch’s CEO, Volkmar Denner, adding that, "the cornerstone of such cooperation is solutions that are based on open standards."
A FINAL PIECE IN THE PUZZLE. “Today we offer all the ace cards for the connected world and we are a full service provider for connectivity and the IoT,” claimed Bosch’s CEO, Volkmar Denner. With SAP’s in-memory database technology HANA, they added a final piece of the puzzle to complete the Bosch IoT Cloud.
Denner further pointed out that cooperation between Bosch and SAP is based on sustainability and the provision of rational tools to achieve increased customer benefits. This is a declaration that may sound generic, but in this case there may be a lot of substance.
At a glance the partnership would mean that:
- SAP contributes their HANA database to Bosch’s IoT cloud.
- Bosch makes their micro services available to SAP on the HANA cloud platform.
- Both parties have complementary areas of expertise: Bosch has extensive expertise in the field of connected devices, while SAP is deeply invested in the development of IoT applications. Parenthetically, SAP made its first strategic takeover in the IoT field when they acquired the Norwegian company Fedem Technology Innovation in June. The company's technology is intended to become the basis for a global focus on physics-driven simulation platforms for the IoT.
- Finally, both companies are driving Industrial Internet Consortium (IIC)-related projects and participate very actively in the development of the joint German national “Industrie 4.0” initiative. The latter is a feature of German industrial activity -- companies working toward a common goal, with a level of collaboration that extends far beyond what is common in other countries. This is backed up by support from the very top levels of government. As politicans, such as Chancellor Angela Merkel believe, it is in the national interest to bring home the production which was previously lost to low-cost countries, by developing superior, advanced and economically efficient production systems.
The decision to run Bosch’s IoT cloud on SAP HANA is a good example of this direction because it makes it possible to process large quantities of IoT-related data in real time. In addition, Bosch’s and SAP’s complementary areas of expertise in terms of cloud services and other software will increase the overall functionality of the end solution exponentially.
According to SAP, this includes, “safer and more reliable connections to things like vehicles, manufacturing equipment and machines, while also providing an open platform. Overall, this is exactly what customers need for the development of new smart services.”
POLITICAL SUPPORT FOR INDUSTRY 4.0. Germany is Europe’s industrial center, and the driving force behind Industry 4.0. This is an effort of both the German government and industry, and chancellor Angela Merkel takes every opportunity to show her support for this concept, which is aimed at continuing Germany’s industrial dominance by replacing hierarchical structures with decentralized, self-organizing networks. This advanced system for industrial product realization can contribute to bringing home production that was previously lost to low-cost countries.
A Couple of Practical Examples of SAP and Bosch Collaboration
What might such a service look like in practical terms? One specific example is positional data for forklifts, which could increase transparency and efficiency in logistics. In an existing IIC-coordinated testbed known as Track and Trace, it is now possible to determine the location of forklifts in large warehouses, aircraft hangars or industrial sites in real time and to the nearest centimeter.
Zeno Track, a start-up founded by Bosch, pinpoints the forklifts using cameras, GPS, laser scanners, radio and connected motion sensors. The location data is transferred via the Bosch IoT Cloud to the SAP Vehicle Insights application, which is a fleet management system. As a result, vehicle fleets can be managed intelligently and in a way that best supports the planning and fulfillment of transport orders or maintenance schedules. This reduces costs and increases efficiency. This interplay of sensors and software will also enable the creation of new services that go beyond individual companies.
Another example is the idea of networked screwdrivers, which can report their location and what they are currently being used for with very high accuracy in real time. This, in turn, means that the production system system can pick out a set of relevant bits (the small hexagonal screw heads that are inserted into the screwdriver socket). The result, according to the alliance partners: more efficient production.
IoT Market Share Leader PTC Joins SAP’s PartnerEdge Program
Siemens is not alone among the PLM vendors in looking for closer ties to SAP HANA. PTC is another example.
Few companies in the PLM sphere have invested as heavily in IoT as PLM developer PTC. So far, the company has spent over $600M in strategic investments to align their existing enterprise software business with future IoT solutions; and not without success.
With an 18 percent share, PTC is the IoT platform market leader, according to IoT Analytics. In August this year, they were named the IoT Platform Market Leader in the “IoT Platforms Market Report 2015-2021,” published by IoT Analytics, and the “Industry 4.0/Internet of Things Vendor Benchmark 2016” report published by Experton Group.
However, this PLM player has some remaining challenges to address both technologically and financially. The integration of several acquired softwares into their existing Windchill PLM and ThingWorx portfolios is one example; turning the technology into a revenue stream is another.
It’s always hard to be a pioneer. As I noted in an earlier article, ”Timing is essential, instant success is rare, and it is far from certain whether the one who plows the soil will also reap its fruits.”
But PTC’s CEO, Jim Heppelmann, has been consistent and determined in his efforts, and he firmly claims that the IoT capabilities are a natural extension of the company’s PLM strategy.
I believe he is on the right track.
CONSISTENT AND DETERMINED. PTC’s CEO, Jim Heppelmann, has been focusing strongly on making PTC into the leading IoT company. It has been a tough journey surrounded by a great deal of scepticism, but the PTC chief remains a strong believer and seems to be on his way to proving that he was on the right track from the start. Today, PTC holds a position as IoT market leader, according to IoT Analytics’ research.
Heppelmann is Not Afraid to Act Fast When Necessary
Furthermore, Heppelmann is not afraid to act quickly.
It’s hard to change the world alone. If a partnership promises the opportunity of a shortcut to reach your business goals faster – or if your customer demands it – hesitation is not part of his business philosophy. PTC joined SAP’s PartnerEdge Program last week and announced the availability of its ThingWorx IoT Platform running on SAP HANA.
“Joining the SAP PartnerEdge program provides us with another highly regarded channel for distributing the ThingWorx platform,” Heppelmann commented, adding that, “By working with SAP, we are able to extend our leading IoT capabilities to a larger network of customers and partners, further enabling IoT innovation.”
He also said that PTC recently launched ThingWorx on the SAP App Center, where it will be marketed toward SAP customers and partners.
The Centerpiece of PTC’s IoT Technology
ThingWorx is the centerpiece of PTC’s IoT technology. It is a platform on which you can build and run IoT applications. ThingWorx is designed to quickly create or modify applications; for example, to adapt them to other data streams such as enterprise applications and unstructured data.
“It is, a rapid application development platform, providing connectivity, machine learning anomaly detection, industrial connectivity and augmented reality,” Heppelmann explained. “These capabilities combine to deliver a comprehensive IoT technology stack that enables companies to securely connect assets, quickly create applications and innovate new ways to capture and deliver value.”
So, what will the PartnerEdge program bring to PTC? Heppelmann said that it empowers PTC to build, market and sell software apps on top of market-leading technology platforms such as SAP HANA Cloud. The program provides the enablement tools, benefits and support to facilitate building high-quality, disruptive applications focused on specific business needs – quickly and cost-effectively. The program also provides access to all relevant SAP technologies in one simplified framework under a single, global contract.
3DEXPERIENCE IS THE ANSWER. Dassault Systèmes has chosen to call their IoT venture The Internet of Experiences, or IoE. “It’s because it aims higher than ’normal’ IoT ventures by concentrating on what becomes possible when smart devices piggyback off one another’s capabilities to create experiences,” asserts Dassault’s VP of High Tech Industry and Internet Of Things IoT, Olivier Ribet.
Dassault and the Internet of Experiences
So, two of the traditional ”big three” PLM players have joined forces with SAP to be able to offer HANA technology to their exsisting and potential customers. But what about about the third big player, Dassault Systèmes?
While Dassault does have some limited ventures together with SAP–for instance, in connection with an energy efficiency project in a German Bosch factory in Hamburg– when it comes to IoT, they generally have a lower profile than the competition.
However, earlier this year Dassault introduced an IoT platform partner strategy where they stated that they, "will partner with IIoT Platform providers and focus on the delivery of IoE applications.” IoE stands for Internet of Experiences.
The latter is a reflection of Dassault’s efforts to promote 3DEXPERIENCE, which they call their “beyond PLM platform.” According to a presentation that Olivier Ribet, Dassault’s VP of High Tech Industry and Internet Of Things IoT, gave to industry analyst LNS Research earlier this year, ”The Internet of Experiences aims higher than “normal” IoT ventures by ”concentrating on what becomes possible when smart devices piggyback off one another’s capabilities to create experiences.” The rhetoric is, as always in Dassault’s contexts, visionary but a bit unclear on a practical and detailed level.
However, the LNS analyst’s conclusion is that, “the IoE is well aligned to the Dassault Systèmes value proposition and strength in simulation. Previously, it was unclear how this vision would be delivered given existing IoT capabilities.”
Generally, Olivier Ribet doesn’t speak in terms of specific ready to use tools. Instead he points at the 3DEXPERIENCE platform as the solution to realize IoE.
”Working with our customers and partners, the 3DEXPERIENCE platform truly bridges the world of ‘digital/virtual’ and the world of ‘physical/real’. It allows continuous experience value creation, leveraging the power of the model-based systems engineering capabilities. It is also the only multi-scale, internet of things-aware environment that enables the system modeling and the simulation of connected experiences concurrently and seamlessly,” he writes in Dassault's 3D PERSPECTIVES blog.
My Take: A Good Start, But Dassault Still Has a Ways to Go
Stephen Chadwich, VP and head of Dassault’s Northern European operation offered another explanation of the IoE concept:
“In many cases, once the things in the IoT are connected and given a voice, they become more than just ’things.’ They become part of a living experience shaped by interactions between people, places and objects; among products, nature and life. They become contributors to what beckons just beyond the IoT: the Internet of Experiences.”
He added that Dassault has high ambitions with its IoE bet. They want to provide solutions containing, ”innovative services that simplify and enhance daily life and commerce in ways never previously possible. This will enable industrial equipment, transport, power and infrastructure facilities to report their status and autonomously prompt appropriate action.”
Big promises, but as LNS’ analysts concluded about Olivier Ribet’s presentation: “Although it clearly demonstrated Dassault Systèmes’ understanding of the problem and early success, there are still unanswered questions. Namely, why a product-centric PLM solution is better suited than either existing tools or purpose built next-gen solutions for managing engineering data specific to asset and process optimization.”
As it looks right now, Dassault is working on developing solutions for the Internet of Experiences rather than being able to deliver a ready to use IoE package or app on the 3DEXPERIENCE platform. It’s a good start, the intentions are spot on - but still there’s a way to go; definitely longer than PLM IoT leader PTC and some of the other competitors in the field.