SAP Industry Cloud – Need of The Hour?

⇨ SAP Industry Cloud is an offering that sits on SAP BTP.

⇨ It is a portfolio of cloud-based solutions designed specifically for specific industries, by SAP and SAP partners, on the SAP BTP platform.

⇨ It can help companies evolve and innovate rapidly without going through the painful exercise of building a plethora of solutions customized for their industry.

The genesis of this article can be attributed to a visit to the Walmart supercenter I made last month. As I was observing the monitors near the checkout lanes, I saw Green squares pop around the faces of individuals captured by the cameras. That Green square, as many readers would know, shows a deep learning algorithm analyzing the streaming video feed. With Walmart’s gigantic network, the data it can capture and leverage to train algorithms is also enormous. While there is this whole discussion on the treasure trove this video feed data is, this article focuses on the other aspect of this exercise. The IT network needed to support such massive scale innovation. And that is why Walmart has been building its private cloud network for a while. Upon pondering on this, while driving back home, I thought about how SAP Industry Cloud offering is akin to the capabilities Walmart is developing within the context of the retail industry.

A few weeks ago, I read a Bloomberg article on how Walmart is weaning away slowly from public cloud providers. And if I were a company with Walmart’s size, scale, and resources, I would have taken the same path. In 2019, I wrote an article that postulated that every company now needs to become a technology company. This is much more important for Walmart because its scale of access to the end consumer provides data access that no technology company may have (AWS may be ranked close, though, because of data from Amazon.com). Data security in the cloud is not as big a concern as it was during the initial years, so Walmart may not be worried about that. Its infrastructure can also probably take care of the data security and privacy its customers desire. The gradual foray into building its private cloud network is taking control of the innovation it will generate so that it can monetize it effectively. But this also means two things:

• Walmart is building this private cloud infrastructure to support a wide range of solutions and innovations. You should consider this private cloud not as infrastructure but as a solution portfolio that sits on a platform. Walmart is building a plug-and-play solution portfolio that continuously learns, applies, and delivers value on a massive scale.
• In the future, this private cloud may become public, with Walmart offering the solutions as Industry solutions.

And by now, you probably know why and how I ended up thinking about SAP Industry Cloud solutions after pondering about Walmart’s capabilities.

The Age of Plug and Play Solutions and SAP Industry Cloud

Scalability, agility, and flexibility….you hear these cloud marketing jargons a lot, probably. And the fact is, these are examples of attributes that made the public cloud so popular and have accelerated adoption. But the public cloud infrastructure, by itself, was a differentiator probably a decade ago. It is a mere infrastructure now. We keep emphasizing that the cloud can help companies across industries build innovative solutions. Figuring out how to make an end-to-end capability and then successfully building that is a massive exercise. It does not matter how big or resourceful an organization is -success in developing an end-to-end solution in the cloud requires many elements to fall in place. Therefore, there is a market for cloud-based industry solution portfolios that organizations can purchase and integrate without the painful exercise of building these capabilities from scratch themselves. And this is where SAP Industry Cloud comes into play.

What exactly is SAP Industry Cloud? It is a portfolio of cloud-based solutions designed specifically for specific industries by SAP and SAP partners on the SAP BTP platform. That is the simple explanation but should help you see how it comes into play after the narrative described in the last paragraph. Companies in specific industries can save a lot of time and effort and leverage decades of expertise of SAP and SAP partners by leveraging the Industry cloud:

• No need to evaluate what specific solutions need to be customized for your industry. The portfolio is designed specifically for your industry.
• Since a majority of companies are on SAP technology platforms, by leveraging SAP Industry Cloud, you do not need to worry about how or if these solutions will integrate with your SAP ecosystem.
• No painful exercise in building these solutions, planning and designing corresponding architectures, and managing the required infrastructure.

An Opportunity that SAP Will Need To Fine-Tune

But solutions like SAP Industry Cloud can sometimes be a double-edged sword. The key to success is immaculate execution, but in this case, execution is not implementation but designing the right solutions and portfolio for each industry. A continuous cycle of fine-tuning, through teachings and use cases from the real world, combined with continuous upgrades and additions to the portfolio, such that it is plug-and-play (almost) to a large extent, will be the key. Offering something like this involves more risks than standalone solution offerings. On the benefits side, the success of this offering can help propel the SAP BTP offering, along with the opportunity to develop and sell additional solutions. You can think about this as the “Gillette Model”.  Suppose you can establish value in that portfolio of cloud solutions and lock these customers on your platform. In that case, they will always prefer to add a solution from you in this portfolio, one that integrates and delivers seamlessly, vs. go with another provider. This “Gillette Model”, is what hyperscalers leverage when they build and offer solutions for their cloud infrastructure.

The risk side is that this needs immaculate execution. With the cloud-based solutions market exploding, new enterprise system models being developed and launched, and low barriers to entry allowing many organizations to do their development, the margin of error is very narrow. To build that “Gillette Model”, companies do not need technical expertise alone. They need what I like to call a polymath approach. It is more about understanding needs, wants, organizational strategy, unique industry nuances, and challenges vs. technology itself. With a comprehensive offering like this, there needs to be a careful framework, a polymath framework, in place to deliver a solution that not only delivers benefits but also opens doors to many other offering sales.