The Wild West of IoT

Startup Focus Maps the opportunities for IoT startups at SAP

The world erupted with the advent of the internet. It was a momentous occasion signaling a complete revolution of communications and information like nothing else before. Bill Gates aptly described it as “the Internet becoming the town square for the global village of tomorrow”.

For the Silicon Valley and innovation hubs across the globe, the internet has only been the critical building block for subsequent technologies that disrupt our world. In recent years, mobile has been the focal point, with the acceleration of connectivity enabling the mobile devices we carry to provide GPS navigation, embedded web browser, SMS messaging, and gaming capabilities.

Wireless enabled mobile computing has brought us to the next phase of infrastructure technology where the next generation of mobile will become context-aware by leveraging embedded physical sensors and instant data exchange functions, forming the basis for the Internet of Things.

However much the imminent tsunami of IoT-generated data will impact individuals and companies no one can tell yet. In the interim, the Startup Focus team has begun to discern IoT opportunities by first defining the technological precedent, how far along in development it is, and what it means for startups in the SAP Startup Focus program and ultimately for SAP’s enterprise customers.

Pioneering IoT

“The ‘Internet of things’ will link tens of thousands of sensor mesh networks. [It] will monitor the cargo in shipping containers, the air ducts in hotels, the fish in refrigerated trucks, and the lighting and heating in homes and industrial plants. But the nascent sensor industry faces a number of obstacles, including the need for a networking standard that can encompass its diverse applications, competition from other wireless standards, security jitters over the transmitting of corporate data, and some of the same privacy concerns that have dogged other emerging technologies.”Robert Weisman, Boston Globe

Driving the IoT Opportunity West

Much of IoT requisite framework is already in place, like ethernet and Wi-Fi and information infrastructure including hardware (devices and sensors) and software (platform and advanced algorithms). Telecomm carriers have begun to offer machine friendly data plans which now offer lower price points for getting devices up and running. In addition, relatively economical software is being introduced in the market, allowing customers to experiment with IoT technology, gauge its performance and ROI, and scale it without incurring high cost.

Settling the West

What mobile technology was for SAP and other large firms three years ago, the Internet of Things is today. While mobile was a separate category in the past, it is now a characteristic of SAP’s complete software package and the company would like to see the same for IoT. The development of IoT technology will not only hinge on the proliferation of industry-wide infrastructure and standardization, but also key partnerships between large industry players like SAP and startups that together, will evaluate potential customers and use cases and create applicable solutions that form the building blocks of SAP’s new IoT end to end solution.

SAP has already set this precedent with the announcement of its partnerships with the global Internet of Things platform leader Jasper; the formation aimed at enabling companies of all sizes to “rapidly and cost-effectively launch, manage and monetize IoT services using its industry-leading software-as-a-service”. The Startup Focus Program’s own recent graduation of IoT startup SeeControl not only represents efforts to bring external IoT players with a deep understanding of the market into SAP’s conversation around IoT, but also highlight unique startup offerings that could prove valuable to SAP’s IoT extension on HCP. SeeControl, a San Francisco based startup entering its fifth year focusing on device provisioning and management and supporting multiple devices from multiple providers and harmonize the messages into a customer’s main data storage area, entered the program in mid-April.

Startup Focus Stakes a Claim

The Internet of Things market will undoubtedly usher in fundamental business transformation for SAP’s enterprise customers. Gaps in SAP’s current IoT end-to-end solution and providing insight and access to customers with viable use cases gets to the heart of the role Startup Focus will play going forward: as liaison between the two groups in bringing in the most current technology on the market into the company, and in return, translating the needs of SAP’s customers and use cases.

On the startup side, Startup Focus sees two large opportunities available to startups and SAP. The first, fleshing out platform opportunities, will be focus largely on bridging SAP’s HCP and Mobile divisions to external IoT platform companies. The benefits are clear for both sides: IoT platform and services startups exogenous to SAP stand to benefit from HANA Cloud Platform as the core or center, while the HANA Cloud Platform division can expose itself as a platform to IoT providers in the ecosystem at large.

The second opportunity the team has identified involves application development, and more specifically, finding advanced machine learning or algorithm companies that dig deep into the variety of sensor data and can glean insight from it. Companies like Startup Focus member Falkonry, whose platform enables encoding system know-how such as failure modes and system structure into machine learning, will be a relationship that stands to enrich the IoT platform & services offering.

The SAPPHIRENOW conference May 5-7 will be an inflection point for the Internet of Things, as customers’ perspectives on new IoT technology will be brought to light, and the nature of relationship of IoT startups to the larger SAP machinery will become clear. Stay up to speed with news from Sapphire @SAPStartups #SAPPHIRENOW and follow the story at Startup Focus on Storify.