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Author's profile photo Pradeep Amladi

The business end of the Internet of Things

Modern manufacturing is a fast-moving, fascinating environment, full of innovation. As we discussed in the last blog, “The Rise of the Machines”, the latest advances aren’t just confined to the assembly line but can be found in the products themselves. Now let’s look more specifically at what this means for the ways smart machines can work and how this can help customers to be successful.


The big buzz at CES this year was all about the internet of things: passive objects and devices communicating to make your life better, whether in wearable technology, your car or your kitchen. The key point is that with sensors coming down in price, they can now be built into all sorts of things.

Pirelli, one of the world’s biggest tyre manufacturers, is the exclusive tire supplier for the Formula One racing championship. It is a hub of constant innovation, and with SAP’s partnership, gets meaningful insights in near-real time directly from sensors embedded in the tires, harnessing the power of big data to collect real-time information on performance and then use these insights to improve the car, mid-race. This can mean the difference between winning and losing – big business in a sport that’s worth $4bn globally.

These sensors pave the way for a host of other uses, in time trickling down to the cars we drive. As well as understanding how a product is used and helping customers be more efficient, they could be used to improve safety, record mileage, to work out wear by recording mileage, discover and share traffic information, road conditions, remote diagnostics – even automated toll payments.

In this sort of scenario the tool is the same, irrespective of the product, whether car, tire, toothbrush or storage system. The manufacturer uses the added
‘smarts’ of its products to extract real time data, analyze it, make sense of it and gain insights that will help them. According to the Gartner Top Ten Tech Trends for 2014 report, the value of smart machines works in four layers:

  1. Manage – they optimize the utilization of a product
  2. Monetize – for example enabling pay-per-use or pay-per-mile, so consumers don’t have to buy the whole machine or product
  3. Operate – remotely operate a device or product on behalf of customer
  4. Extend – they provide more digital services and content  (education, training and so on) on top of the original product

So how do we deal with all this opportunity? The real bottleneck is the flood of data. And the winners will be the ones who can sift through it, make sense of it and purpose it for applications in which others see value. The point is, you’re selling and creating new products which can tell you how they are used and under what conditions. Add that to a customer profile and you can create a whole new field of business opportunities or services that would be relevant to your customer.

We can offer the tools for these insights and understanding the data, but in a field of endless possibilities, how do you harvest the right ones? It’s both a blessing and a curse. But that’s when your business sense snaps in – picking and using the right tools. You don’t just put a sensor in something because you can. You need to know what it’s for, how the customer will use it, what the opportunity is and whether there is value in it.

There’s a time lag between new tech and the product that grows with it on the one side, and it being picked up by mass market as it digests technology on the other. If you’re able to gain a competitive advantage by understanding these insights, there could be some low hanging fruit.

Continue the conversation in the comments below and on Twitter @SAPhightech. To learn more about we can help you with your business challenges please have a look at SAP’s Solution Explorer for the High Tech Industry and the Automotive Industry

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      Author's profile photo Former Member
      Former Member

      Excellent Blog, Pradeep! Here´s another blog that the audience might be interested in. The Internet Of Things: Enabler Of The Fourth Industrial Revolution