German business software giant SAP missed out on the first three industrial revolutions through the simple fact that it didn’t even exist. But it wants to make sure it doesn’t miss out on what is seen as the fourth – the Internet of Things (IoT) – with the launch of Leonardo, a new SAP platform that will connect an array of machines and services.
Leonardo is on show at the IAA Frankfurt auto show and the Walldorf, Germany-based software company is highlighting its automotive capabilities, such as an ability to automatically pay a car’s tolls and fees. Such payments are a typical example of the machine-to-machine communication behind the so-called fourth industrial revolution, a transformation on the scale of the three previous revolutions of steam power, assembly lines and the computer.
Even in its infancy, expectations for the new technology are huge. Technology companies like SAP have to keep up or face being relegated to the victims of progress. “We regard the Internet of Things as very important strategically, if not the most important strategic area,” said Tanja Rückert, responsible for SAP’s Internet of Things & Digital Supply Chain division.
Boston Consulting Group (BCG) estimates that Internet of Things revenue will grow by 20 percent annually to almost €250 billion by 2020 and market research company Gartner sees the number of connected machines growing to 20.4 billion by that same year. BCG expects the biggest markets to be predictive maintenance, self-optimizing production and intelligent warehousing, aspects that are already addressed by SAP’s enterprise software.