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One of my favorite sessions at the recent Sapphire in Orlando was a meeting with Pirelli where the bloggers could ask detailed questions about a HANA-based Internet of Things (IoT) solution that Pirelli had built.

I thought the solution represented the innovative potential of combining HANA and sensors.

The public session that Pirelli gave to the conference attendees is also online and those that are interested in this area should definitely take a look.

As I listened to Pirelli representatives talk about their solution, I recalled that a month ago General Electric invested $105 million in Pivotal (a new PaaS started recently by EMC and VMware) to boost their IoT activities. 

Besides working with customers like Pirelli,  SAP is also beginning to market its IoT activities more aggressively and at the recent Mobile World Congress in Barcelona, SAP joined in a partnership with Ericsson to promote machine-to-machine technology.

I thought it would be interesting compare the SAP and Pivotal approaches to better understand the role of such activities in the broader SAP Cloud strategy.

Background: GE Investment

Let’s take a quick look at a few quotes to get a better understanding of GE’s move.

Motivation

“Machine-to-machine communications over the Internet will change the way we do business,” said William Ruh, the vice president of GE’s software and analytics division. With the Pivotal investment, he said, “we’re going to learn a lot about infrastructure and software.” He added, “Industrial data is very different from consumer data too, and we’ll help Pivotal understand the requirements.” [SOURCE]

You see, GE makes lots of things that are already instrumented with sensors that collect massive amounts of data as they operate.  A surprising amount of today’s Pivotal launch event was devoted to discussing use cases involving GE-made products such as airplane engines and wind turbines.  The main point seemed to be that doing useful things with the massive amounts of data gathered by these things (or at least the sensors attached to these things) requires a radically different software and application architecture.  Pivotal and its upcoming PivotalOne offering will attempt to provide an application development platform that can not only ingest these massive data quantities (using GemFire) but can also wring meaning and useful business intelligence from them in order to enable realtime responses. [SOURCE]

Use cases

GE, of course, is huge in industrial manufacturing and services, as well as sensor systems. Imagine how much easier the job would be for its jet engine repair division, for example, if the engines were feeding constant data back to a real-time, massively parallel, cloud-based data analysis system. It could, in theory, cut down on testing costs and decrease turnover time, making the whole division more efficient and profitable. [SOURCE]


POV

Focus on applications

One blogger suggested that “GE May Have Shown Pivotal’s Target: SAP Hana” :

Yes, this seems to be a shot across the bow of SAP AG (NYSE/Frankfurt: SAP) and its in-memory Hana One platform. It seems EMC and VMware aren’t content to let SAP own the data analysis space for what SiliconAngle calls the Industrial Internet — the swarm of connected sensors and devices used in manufacturing, oil, transportation, and other vital industries. [SOURCE]

I think that HANA isn’t the real target behind GE’s investment. 

I think the real target lies somewhere else. In order to better understand this assumption, why don’t we start with a more detailed comparison between SAP / Ericsson and Pivotal / GE.

Note: I created the following table for my blog about the Ericsson-SAP partnership – I’d like to adapt it for this blog.

Puzzle Piece

SAP / Ericsson

Provided by

Pivotal / GE

Provided by

Connected end points (sensors, devices, machines) for transmitting and consuming data

Customer

Customer based on products created by GE

A device connectivity platform such as Ericsson’s Device Connectivity Platform (EDCP) enabling machines to communicate over cellular networks

Ericsson

GE????

A mobile network operator providing the backbone and value added services making wireless connectivity possible

Mobile network operator

Mobile network operator

A device management platform to provide the infrastructure, agents and tools required to securely connect and control the end points

Not sure here…

Not sure here…

A data management platform such as SAP HANA that provides the big data infrastructure to handle large volumes of data that are rapidly streamed from the end points and allows intelligent decision making through the use of analytics

SAP

Pivotal

Industry specific applications such as smart services for connected cars. While the applications themselves are stars in their own right, it’s their analytical capabilities that are critical to drive true business value for a company. What’s the point of collecting data if you can’t use the information to help gain competitive advantage and be a better run business?

SAP

GE

The Ericsson-SAP partnership is focused for on creating the infrastructure necessary in IoT environments. The focus of the GE/Pivotal partnership is on applications.

So, 113-year old GE appears to be making a bet on the upstart Pivotal in part to focus on building a series of product offerings to help its customers leverage the massive data quantities that GE’s things generate.  GE not only wants to make money from selling the things and the sensors monitoring the things, but also on the intelligence that can be derived using Pivotal’s software architectures from the data that the things generate. [SOURCE]

As a PaaS provider, having a partner such as GE that creates the demand – in form of devices – and creates the applications that use the data from the devices is perfect. 

With this background, let’s bring Pirelli back into the discussion.  Pirelli’s solution is one example of a partner using SAP technology to provide IoT solutions for their customers.   Thus, Pirelli is an excellent example of a creator of those industry-specific IoT applications similar to those being created by GE.

Comparing Pirelli and GE is useful. Both companies bring their experience in sensor to create applications that provide new services to their customers. One important difference is that the GE involvement is to create an IoT  framework in a PaaS whereas the Pirelli solution is currently only available for Pirelli itself and its direct customers.  The Pirelli solution is also currently not cloud-based whereas the framework created by GE will be based on the Pivotal cloud offering.

Exploiting the existing customer base

The two companies – GE and Pirelli – are different in terms of size. 

GE has the vision, the customer base, the technological know-how and the acquisition prowess to pull this off. GE has nearly as much cash on the balance sheet as Microsoft and Intel, combined. [SOURCE]

By leveraging the Pivotal platform, GE gives the company instant differentiation from all the other platforms out there. Sure Cloudera and Hortonworks and IBM and Intel and Fujitsu and all the other platform companies have plays with the industrial internet – but if you had to pick one single partner in this space it would be General Electric – a $140+B monster that powers industries like energy, health care, consumer, transportation and finance. [SOURCE]

Yet, just because Pirelli isn’t a $140+B monster doesn’t lessen its value to SAP as partner. Indeed, Pirelli is an excellent example of one major advantage that SAP has in the IoT area – its existing customer base.  As I listened to the presentation by Pirelli at the Sapphire, I realized that there are probably many other SAP customers who could provide innovative IoT solutions if provided with the correct technology. 

Providing the business context

GE might provide the sensors themselves and also might create associated IoT applications.  SAP, however, with its ERP roots could provide the critical business context that provides real value to such IoT-related analysis. Your vending machines might provide information about their status (how many candy bars do I have left, etc) but this information becomes much more valuable when associated with other enterprise data (global inventory, marketing, etc) where SAP excels.

Well rounded offerings

Although the GE investment is important, the Pivotal platform does have some flaws. As Gartner analyst Yefim Natis suggests

When IT leaders talk about a platform for the next-generation applications, the discussion often circles around the Nexus of Forces: cloud, mobile, social and information derived from big data analytics. Pivotal has put stakes in the ground for the cloud and information initiatives, but social and mobile are still to be integrated into the vision and the product.

Without the social and mobile technologies, Pivotal will not only be unable to support some of the most active areas of recent innovation, but also will not discover the capabilities that arise in the nexus, from the relationship among the four forces. An application infrastructure company in 2013 can hardly claim the mantle of an innovator without an investment in all four components of the Nexus of Forces.

Pivotal might have GE writing applications for its platform but SAP does have some advantages up its sleeve – including the use of Afaria + HANA to manage all those devices.

Associated PaaS offering is missing

One of the most important things to remember is that GE is focusing on an IoT framework within Pivotal rather than developing isolated applications that use the data provided by its sensors.  Once this framework is in place in the PaaS, other Pivotal partners will be able to more rapidly create IoT – this ability increases the attractiveness of the Pivotal platform for such endeavors.

SAP might be able to attract more partners building HANA based IoT applications but without a common framework, such partners will probably be recreating similar fundamental IoT-related functionality rather than focusing primarily on their specific domain features.  Although the Ericsson partnership may help create a common framework, its focus is on the necessary infrastructure rather than software.  If SAP wants to do well in this space, it must also work on creating a reusable IoT framework on the HANA Cloud Platform.

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