Every forward-thinking technology company has an innovation department, and SAP is no exception. Often presented as a “lab” environment, tech vendors like to call these fancy names like proof of concept (PoC) workshops, incubator zones, or foundry facilities.
SAP uses the SAP.iO brand to describe its initiatives designed to encourage early stage software innovations. In total, SAP.iO currently includes the Venture Studio initiative, a research and development fund, and a foundry. Initial investment in the whole project is US$35 million.
The Why, When, and Where of Innovations
What is important to remember here is not so much the what, why, and when of the new software streams in development. (Although those factors are undeniably important.) It’s the “where” that really counts.
SAP says SAP.iO is all about building new innovations both inside its own platform and tools stack. Yet it’s also about working with external enterprises to build products and find new customer channels in the broader technology world.
Three Paths Leading to Good Ideas
This duality and openness to early developments that could go in any direction is what SAP calls an “open innovation model.”
Within SAP.iO there are three paths the company is pursuing. The first of the three, the SAP.iO Venture Studio, launches new ventures that tap into SAP’s data, technologies, and customer relationships. The team provides hands-on design, development, and sales capabilities to build products that attack some of the biggest problems in enterprise software.
The SAP.iO Fund is exactly as it’s described—a fund for startups working on what SAP considers promising technologies. In addition to those all-important dollars, SAP also makes some of its data, technologies, and business content available to these fast-growing ventures.
The SAP.iO Foundries are workspaces designed to encourage people to share ideas, find mentors, and build their products in a friendly, collaborative environment. SAP Foundry locations currently exist in San Francisco, New York, Paris, Berlin, and Tel Aviv.
On the Tech Frontier
With use cases spanning from human capital management (HCM) applications all the way to finance, sales, field services, health care, and beyond, SAP.iO is designed to harness what SAP has called “frontier technologies.” This conjures an image of a new digital wild west populated by artificial intelligence, machine learning, blockchain, the Internet of Things (IoT), robotics, a digital supply chain, natural language processing (NLP), quantum computing, and more.
“Our open innovation model continues to deliver value to our customers,” said Deepak Krishnamurthy, chief strategy officer and executive vice president at SAP. “In addition to empowering our employee innovators, SAP.iO will use its fund and foundries to invest in entrepreneurs who develop industry-changing software.”
The first startup to receive funding from SAP.iO is Parable Sciences, Inc. (known as Paradata), a big data analytics company based in San Jose, California. Paradata’s use of machine learning to offer greater supply chain transparency complements the capabilities in SAP Ariba for direct material sourcing and supply chain visibility—a good example of the kind of symbiotic relationships that SAP.iO can cultivate.
Why Should SAP Customers Care About SAP.iO?
With these types of investments, sometimes it’s hard to see the road map for when they’ll pay off. But here are five reasons the work happening under SAP.iO could benefit ASUG members.
Reason 1: Applications built under this model are developed in a less corporate, often less structured environment where real paradigm-shifting innovations can occur.
Reason 2: SAP offers mentorship and customer introductions as part of SAP.iO. ASUG members could have access to emerging applications way ahead of the rest of the industry adoption curve.
Reason 3: This is an “open” innovation model. That means ASUG members could potentially get involved with prototyping and testing these technologies. The goal is to help shape them for specific use cases more quickly, and at an earlier stage in their development. This should help you solve specific, real-world cases in your business more quickly, instead of having to wait for the technology to become practical.
Reason 4: The SAP.iO Foundry programs offer tailored mentorship, plus access to SAP application programming interfaces (APIs). As these entrepreneurial companies tap into the same SAP data you’re using as a customer, there’s the potential for exponential development that could dovetail with ASUG members’ own transformation road maps.
Reason 5: The SAP.iO Fund already has an armful of use cases with startups (some of which are incubators inside larger organizations) working with what are undeniably frontier technologies including machine vision systems, cyber-deception technologies, and psychometric analysis. Additional financial support from SAP could mean that you’ll see these leading technologies in SAP products at some point in the future.
The idea of these types of research and development labs cooking up the next big innovation may sound far-fetched. But SAP’s three-pronged SAP.iO approach just might lead to the next big thing. And who doesn’t want to be right there on the frontier of the next digital revolution? We’ll continue to watch SAP.iO for a chance that we might all be there and ready to participate.