I recently attended an event at which Bosch and SAP announced a major partnership to more closely align their respective cloud and software expertise around the industrial internet of things. This partnership underlines the fact that SAP and Bosch are prepared to significantly transform their respective business models to generate new value for their customers. The SAP and Bosch partnership focuses on two main items:

  • SAP will add SAP Hana database to Bosch IoT Cloud. Bosch customers will be able to access SAP Hana in the Bosch IoT Cloud with the goal of processing large quantities of data in near-real time. This makes it easier for Bosch’s customers to run analytics of IoT sensor data in the SAP Hana environment.
  • Bosch will make its IoT microservices available to SAP on SAP Hana Cloud Platform. This move will facilitate the safe connection of different devices and components, including vehicles, manufacturing machinery, and smart tools, with open platforms. Customers will benefit from a broad range of emerging services to support their business processes.

The revenue impact of the partnership on SAP and Bosch is not immediately obvious. But the partnership underlines the imperative of thinking in terms of broader ecosystems to win, serve, and retain customers as part of your digital transformation efforts. The goal of this partnership is to ensure that Bosch’s and SAP’s customers benefit from the combined business process expertise that the two firms can deliver. Bosch has expertise in device connectivity; SAP in IoT applications. For instance, SAP customers will benefit by getting easier access to sensor data generated by the connected smart IoT devices that are part of Bosch’s IoT ecosystem, including Bosch’s partners.

Open Standards And Open Source Software Are Prerequisites For Ecosystems

Given the important role that open standards and open source software will play in digital transformation, it is not surprising that, at the same event, Bosch announced the launch of the PPMP open standard for IoT solutions:

  • PPMP is free of charge and based on open source software. The goal is to facilitate the interplay between IoT devices and the businesses that use IoT assets as well as those that develop IoT services. Given the size of Bosch’s ecosystem, there’s a real chance that several of Bosch’s partners will adopt PPMP in the industrial IoT context.
  • PPMP will become one of many open IoT standards. PPMP is hardly the first attempt to create an IoT standard, and it won’t be the last. Several players like the Open Connectivity Foundation, Google, and the Infocomm Development Authority of Singapore are all working on open IoT standards. A speaker from the Industrial Internet Consortium made it very clear at the event that he believes that there will always be many IoT standards, given the complexity of the IoT segment.

Bosch seems to be recognize that setting up its own ecosystem based on its PPMP open standard is a good idea in theory; however, the reality of digital ecosystems is such that unless there is clear value for all ecosystem members, such ecosystems will not flourish.