SAP is not going to be left behind when it comes to the Internet of Things. The next big thing in the tech world is about to explode in the next decade. Right now there are very few that are taking advantage of the tech. Examples that come to mind include the various smart speakers and smartwatches that have been released by Apple and Google. Other examples include the DeepMind AI that has been released by Google to make its factories more efficient. However, for smaller companies that shift to IoT is going to be much harder. Luckily, SAP is here to do away with all that and make the shift easier.

The basic view of the IoT that we have right now is something like the Jetsons. It’s going to be a huge world of interconnected devices with everything speaking to everything else. This will include cars and traffic lights, computers and cell phones and a myriad of other devices. All that power and connectivity are going to be included in the IoT universe. However, the slog to that is going to be arduous. SAP is one of the few ERPs that can facilitate the shift to it.

Reasons for Investing in SAP for IoT

The first is that companies that invest in IoT are worried about disruption. Right now there are so many service-oriented business models already in place that are taking over. For instance, Uber is dominant around the world round because of its technology and acquisition strategy. Airbnb doesn’t have a competitor, and no matter what anyone says, Tesla has the best electric cars. Hence, the disruption is not something that the companies are willing to risk. It’s the same fear that people have about going into something risky without a 100% rate of return. With SAP, that risk is reduced considerably. There is always a risk involved with trying something new. However, with SAP’s platform for shifting to IoT, it’s made all the more reasonable.

The second reason that investing in SAP for IoT is crucial is that companies need to stave off obsolescence. There are myriad examples of companies losing out on the next big trend and playing second banana to smaller players. For example, Intel lost out on the biggest microprocessor market on the planet by not investing in the mobile game. Microsoft also lost out on the tablet game by not focusing on a tablet-based system. Finally, Nokia lost out on the biggest smartphone market in the world by not focusing on their software experience. Hence, IoT isn’t something that the world can sleep on. SAP’s software suite is the best way to not fall behind and generate solutions for IoT transitions.

SAP has been in the middle of the manufacturing and automation revolution for the past 4 decades. In effect, it has put its employees and customers in the middle of the shift to Industrial manufacturing and automation.

Furthermore, it has the largest share of ERP in the world. A third of the discrete and process manufacturers use their software for operations to go smoothly. SAP also has its fingers in all the industries of the world. There isn’t an industry type that it hasn’t touched. Hence, it’s designed and optimized to capture early product opportunities.

What’s more, SAP announced a 2 Billion Euro fund for IoT investment in 2016. Hence, the shift to IoT through SAP is not just a possibility, but an inevitability. The money which is said to be invested through five years for IoT acceleration has many touchpoints. It could beat the investment odds.

New Business Models

Industrial automation has brought forward many gains in sales and production. Hence, the processes, inventory, and equipment have all evolved to keep up with and improve the overall throughput. Through IoT that will undergo an even bigger optimization. Here are just a few new business models that SAP can make possible through IoT adoption.

Mass Customization

This is a new type of manufacturing that will combine the facets of flexibility and personalization. Hence, this will produce products that will be tuned to the specifications of more and more individuals. What this will make sure of is the reduction of unit costs. This will make this business model more and more feasible.

Customers will be able to buy customized clothing and smartphones. They will also be able to configure software directly to their machines so that it is optimized for efficiency and speed. This will not only be a specific advantage in product manufacturing but marketing. The companies that will take advantage of this the earliest will see a huge rise in their sales.

This will be a direct consequence as SAP makes the shift to IoT easier.

Service-Oriented Businesses

Over time, there has been a gradual shift to the service-based business model. Microsoft has now become a services company. Netflix and Spotify among others have made streaming the new norm. Uber and Airbnb have foregone the concept of ownership and shifted to using instead of buying. Hence, service-oriented business models are on the rise.

What this will require in the form of a massive overhaul is a connection to assets. Hence, the nearest car or home or the required file will have to be made available to customers post haste. This will only be possible through a 24-hour connection being established between the consumer and the asset.

IoT is going to be right smack dab in the middle of that. SAP can provide the kind of scaling of communications and connections that this will require. This isn’t just a necessity anymore, it’s an inevitability.

The world of IoT is going to revolutionize business and technology. SAP is one of the few players that is large enough and experienced enough to fully realize that shift. Hence, it’s going to be a valuable player.