SAP Leonardo: lots of potential but still a work in progress

For us, SAP Leonardo is SAP’s approach to a platform that allows for the development and deployment of data-driven applications leveraging technology components such as analytics, IoT, blockchain and machine learning. The promise is for companies to be able to create solutions ranging from edge devices to back end without the need to leave the SAP universe.

For SAP, Leonardo is a top priority, as it is in fact a must for software giants to provide a platform for innovative applications in the digital era. So far, most of SAP’s revenues results from solutions in the context of business operations (on the basis of ERP). However, this business segment does not suffice for SAP to remain a relevant and strategic provider in the future due to the competitive landscape.

We believe that SAP Leonardo offers a lot of potential to develop new applications as well as deploy Leonardo-based applications from SAP or one of its partners. New applications include SAP’s approach to a digital supply chain, comprising Ariba (SRM), SAP Integrated Business Planning, SAP Leonardo and SAP S/4HANA.

We also think that the Leonardo Industry Accelerators, which encompass industry-specific content, subscription licenses, and services including design thinking workshops at a fixed price, allow for a vertical integration of SAP’s assets for use cases in certain industries and may prove to be a good starting point for projects.

SAP wants to push its project approach based on design thinking, delivered by SAP Digital Business Services. We do however think that the SAP partners might struggle with this approach, them being less experienced in the area of design thinking. Nevertheless, we believe that carrying out digital innovation projects on the basis of an innovative project approach is absolutely right.

It is hard to tell which technology building blocks are the most important. However, the IoT and the analytics part in combination with machine learning are certainly key elements. Especially in the IoT area, SAP has created a strong offering. Machine learning is an important building block to bring a business to a new level, e.g. in manufacturing, where it would allow for surprising insights in the manufacturing process itself.

What is compelling about SAP Leonardo is the tool’s coverage from end to end. It must however be said that SAP Leonardo is still a work in progress and not all technology building blocks – e.g. blockchain – have been released so far. What’s more, the building blocks need to be better connected to each other, e.g. the analytics capabilities and the IoT features. We believe it will take a while for SAP to get to this point.

Besides, customers and partners will have to be educated about the fact that SAP Leonardo is not yet another ERP module or add-on solution for ERP, but rather a platform to create data-driven applications that connect IoT devices with back-end processes. And the ecosystem needs to understand how SAP Leonardo complements other IoT platforms from the likes of GE, Siemens, Bosch, and others. SAP has pointed out that it does not see these players as competitors, but rather as complementary. However, frankly speaking, we clearly see some overlapping, so we expect this fact to trigger some discussions and questions within companies about to design the architecture for their digital initiatives. For instance, manfucturing companies will have to decide whether to choose a platform from e.g. Bosch, Siemens or GE, or just SAP Leonardo, or whether to follow a multi-platform strategy instead.

An even bigger challenge than convincing its own customer base is for SAP to position SAP Leonardo as a strong platform that resonates with companies not currently using SAP-based back-end solutions. And although the technology it is building can theoretically support such scenarios, SAP will have to prove it can truly be a force in the platform business. Surely, one of the main advantages of Leonardo is the seamless integration with business data from other products of SAP. This helps to connect data from IoT with business information in a relatively easy manner.

Talking about partners: as SAP is investing heavily in building the platform on its own, it is down to the large number of partners to bring in industry expertise. And while SAP has built up impressive consulting capabilities with regard to SAP Leonardo, it is also down to its partners to implement solutions. However, the high variety of SIs makes it possible for clients to find the right partner for any enterprise or project.

As part of the entire SAP Leonardo Innovation solution, SAP launched the Leonardo IoT Bridge as kind of a “command” center. Tanja Rückert, President Business Unit IoT & Digital Supply Chain, likened it to the captain’s bridge of an ocean liner or Captain Kirks’s command bridge on the “U.S.S. Enterprise” – and although the tool looks like a nice, little dashboard at first glance, it is much more and truly powerful: not only does it show the impact of unplanned incidents, it also proposes a solution, and last but not least has been combined with machine learning functionality.

In a nutshell, SAP clearly did its homework over the last 12-18 months and is developing a profound platform-based IoT portfolio. It can be used as a stand-alone solution to develop innovative IoT solutions, can act as a development platform for partners and can be combined with IoT applications from SAP. Another benefit for the broad SAP customer base is, of course, the tool’s full integration with the entire SAP product portfolio.

Not every integration has so far been realized on one SAP cloud platform, however it is SAP’s clear intent to make the entire SAP Leonardo IoT Solution available on one multi-cloud platform (SAP Data Center, AWS, MS Azure, Google Cloud Platform).

By the way: PAC will soon publish its new PAC Radar “PAC Innovation Radar – IoT platforms in Europe 2017”, which will cover a large number of IoT platforms, including SAP Leonardo. PAC also recently conducted a webinar on the topic of IoT platforms, available here