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When it comes to the understanding the value of the Internet of Things (IoT), enterprises have two objectives: Create new revenue streams or improve efficiency.

/wp-content/uploads/2016/06/iot_970581.jpgA classic example of a manufacturing company that re-imagined their business to drive growth with IoT technology is Kaeser, which no longer sells compressors, but compressed air along with service packages. But as manufacturing processes become more intelligent and more automated, end-to-end connection from the top floor to the shop floor is increasingly important.

Connecting information and operations


“Machines are now connected into their own ‘social networks’ like Facebook,” says Tanja Rueckert, EVP IoT and Digital Assets at SAP. “We collect formatted data from those networks and use machine learning and pattern based insights to help change processes and business models. These autonomous systems enable smart decisions and free up time for innovation.”

A smart industrial Internet of Things (IoT) requires the convergence of Operation Technology (OT) and Information Technology (IT). According to Greg Gorbach, vice president of the analyst firm, ARC, there is a shocking lack of connectivity between the two realms. This gap greatly reduces the potential to implement analytics and other uses of data.

The digital factory at Siemens


One trailblazer in this area is Siemens, one of the largest engineering companies in the world. “IoT is all about data,” says Dr. Ralf Wagner, vice president, Siemens Digital Factory. “In the manufacturing world, getting data out of the plant is crucial. But connecting IT and OT is challenging because they have different requirements and speak different languages.”   

People in IT have generally gone through multiple skills upgrades over the past decades. By contrast, someone trained to program and operate a Programmable Logic Controller (PLC) can get by with essentially the same skills required for the first generation of products. For IT departments, business transformation and new technology is a never-ending quest. For OT, information tech is almost a distraction, because their focus is on producing things.


“Connecting IT and OT requires an open platform because of the complexity,” says Ralf Wagner. “At Siemens we’ve solved this with MindSphere, the open Siemens Cloud Platform for Industry customers. Manufacturing data is collected on the platform, and we provide an open application interface for our customers and partners to develop their own MindApps. That’s how they can quickly optimize their own plants and machines as well as energy and resources. All this is based on the SAP HANA Cloud Platform.”

Like SAP, Siemens can’t do it alone. Last year the two companies embarked on a partnership to simplify the IoT path for industrial customers. The business benefits are undeniable.

For example, industrial manufacturers sell machines to companies that produce consumer goods, such as a bottling company. After selling the machine, the manufacturer loses contact with the equipment and only hears from the customer if there is a problem. Then the manufacturer sends a technician who will probably encounter a number of issues such as lack of spare parts or expiration of warranty.


“With our platforms and apps, we make it incredibly easy for manufacturers to stay connected to their machines before and after shipping. After all no one knows the machine better than the manufacturer. They need to stay connected so they can eliminate hurdles and be more proactive when it comes to maintenance,” says Ralf.

Partnerships between pioneers like SAP and Siemens and advances in technology are changing the face of industrial manufacturing forever. Check out other stories about the incredible impact of the SAP HANA Cloud Platform and the Internet of Things.

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