October 3, 2016

SAP spends $2.2 billion to expand Internet of Things platforms

German company acquires two software firms and plans to open Palo Alto, Calif., innovation lab.

By Ben Ames

Germany software giant SAP SE said Friday it will invest $2.2 billion over five years in an effort to build its capabilities to provide Internet of Things (IOT) products to supply chain and other users.

By adding sensors, smart devices, and "big data" analytics to everyday business objects, companies in the supply chain, logistics, and manufacturing sectors will be able to predict problems and deploy solutions automatically, Hans Thalbauer, SAP's senior vice president of Extended Supply Chain and Internet of Things, said in a phone interview.

"You can go from a networked supply chain to a live supply chain, and this environment allows you to anticipate issues before they happen," Thalbauer said.

SAP began its new investment by announcing Sept. 28 that it had acquired PLAT.ONE, an Italy-based firm that deploys and manages IoT systems, following its June 21 acquisition of Fedem Technology AS, a Norwegian firm that specialized in predictive maintenance and other IoT capabilities. SAP did not announce the terms of either move.

Next, SAP plans to open IoT Labs, where its engineers can work alongside customers to create tailored solutions and offer interactive demos of IoT-related technology such as IoT security, machine learning, 3-D printing, and autonomous systems like drones and robotics. These labs are planned for Palo Alto, Calif., as well as international cities including Berlin, Johannesburg, Munich, São Leopoldo, and Shanghai.

As the third part of its IoT push, SAP will add to the number of software applications based on the company's HANA data platform. The new systems will join existing SAP options such as predictive maintenance, an asset intelligence network, and a range of "Industry 4.0" packages that connect new customers' business software systems with IoT capabilities, said Thalbauer.

"An asset intelligence network is like Facebook for machines," Thalbauer said. "It allows companies to go to the next level and deploy predictive maintenance."

About the Author

Ben Ames
Senior Editor
Ben Ames has spent 20 years as a journalist since starting out as a daily newspaper reporter in Pennsylvania in 1995. From 1999 forward, he has focused on business and technology reporting for a number of trade journals, beginning when he joined Design News and Modern Materials Handling magazines. Ames is author of the trail guide "Hiking Massachusetts" and is a graduate of the Columbia School of Journalism.

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