SAP’s $50 bn Bet on Digital Innovation

At Sapphire Now 2017, SAP introduces Leonardo, the one-stop-shop for digital innovation; announced availability of SAP PaaS on multiple clouds

Becoming a digital business requires a business model and business process changes that no single technology can deliver. And that’s why SAP is introducing the Leonardo platform, which brings together everything that CEOs require for introducing agility and innovation into their business processes. Many companies don’t know the steps to take to become digital. Companies don’t want to waste money on failed innovation projects. They are looking for enterprise-grade and well thought out platform systems that increase the odds of the success of the Innovation and Digital transformation projects.

Originally, Leonardo was conceived as a IoT platform by SAP but now SAP has expanded the portfolio of offering to include Big Data, Analytics, and Blockchain alongside IoT. This comprehensive digital innovation system will offer customers either an industry-focused approach called industry accelerators, aligned to specific use cases, with fixed prices and timelines, or a flexible approach that allows customers to build what they require for any industry or business need.

New developments across the SAP Leonardo innovation portfolio include the SAP Leonardo Machine Learning Foundation; a set of new machine learning–enabled applications for corporate functions ranging from invoicing to customer service and retention; and an SAP Cloud Platform Blockchain service for building application extensions and new solutions using distributed ledger technology.

Multi cloud support for SAP Cloud platform

SAP Cloud Platform is the enterprise platform-as-a-service from SAP with comprehensive application development services and capabilities. SAP customers can now choose an Infrastructure as a service of their choice to deploy the SAP cloud platform. This is significant given that SAP rival, Oracle does not provide such a choice to its PaaS customers. In fact, Oracle charges a premium for running their database on AWS. SAP is looking forward to deepening their partnership with Infrastructure as Service providers like Google, Microsoft and Amazon though they compete for similar services like databases. All infrastructure cloud service providers have a database: Amazon has Redshift by Amazon, Microsoft has SQL database and Google has PostgreSQL.

SAP also announced that the NetWeaver platform is now fully certified to run on the Google Cloud platform (GCP). S4 HANA customers can choose to have their ERP run on the Google cloud platform. S4 HANA is already certified to run on AWS, SAP cloud and Microsoft Azure. Microsoft is also extending their partnership with SAP by introducing M-Series virtual machines powered by Intel Xeon processor E7-8890 v3. This will allow SAP customers to quickly spin up a new virtual machine to test a new business process scenario and turn it off when the testing is done. This will help SAP customers avoid incurring additional costs in their business process management lifecycles.

Highlights from Hasso Plattner Keynote

SAP also announced that their own data centers now run 100 per cent on renewable energy and plan to be completely carbon neutral by 2025. SAP co-founder Hasso Plattner said during his keynote that some of the acquired assets like Concur, Ariba & Success factors “continue to depend on Oracle” and that is a “business decision” and not a “technical necessity” contributing to chutzpah between Oracle and SAP. He mentioned that the expanded Leonardo platform will automate well understood business processes like the Robotic revolution in the manufacturing industry.

Plattner described this by taking the example of car manufacturing wherein most of the modern car is assembled by Robots; even the most complex assemblies are 100 per cent manual but human aided.

He mentioned that artificial intelligence technologies are like a cross over between human aided and completely automated systems. He also accepted that Leonardo will take collaboration between SAP users to the next level, an area that did not get the required attention in the past. Hasso Plattner shed light on SAP’s approach to analytics, which involves taking analytics to data unlike data warehouses that make data leave the system of record for analytics.

Clearly SAP, like other technology vendors, is investing into digital technologies like IoT, big data, microservices, blockchain, Mmobile, AR, VR, machine learning and artificial intelligence.

It’s important for SAP to differentiate its offerings while still retaining its current installed base. SAP has already invested around $50 billion into the development of the Leonardo platform.

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