Software AG's IoT plan: Networked Coke machines are just the beginning

The German software company may be late to the IoT party, but it's targeting four key areas where it hopes it can make its presence felt.

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Coca-Cola vending machines are one use case for Software AG's Internet of Things vision. Image: iStock
When even a staid German company like Software AG begins a headlong charge into Internet of Things technology, you know it's a trend that's here to stay.

According to Software AG's director of intellient business operations solutions, Dr Bart Schouw, there's room for a company that has long been identified as a supplier of databases and analytics to traditional Fortune 500 firms in an industry more closely identified with startups - as well as the big tech brands like Apple, Intel, and others.

"One of my jobs in the company is to talk to customers about the technology of tomorrow, and all signs indicate that IoT is that technology," Schouw said on a visit to Israel this month. "But even with all the talk of IoT, a lot of it is still just talk. According to Gartner, only seven percent of companies have done any IoT work at all, while only 15 percent are thinking about it."

If you look at IoT as devices such as Apple Watches and Google's self-driving cars, then even 15 percent sounds like a high number; those devices, as popular as they are (or might be one day), are niche consumer hardware, and have nothing to do with the enterprise firms Software AG serves.

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Dr Bart Schouw. Image: Software AG
But IoT is coming to them, too, said Schouw.

"Old products will be re-invented and whole new ventures will emerge overnight to focus on the analysis part, and define service on top of it. Innovators and market leaders that are in the midst of this digital transformation will come out as the winners."

The sensor and networking technologies that IoT is built upon - with devices acting in response to specific conditions - are too widespread and too economical to ignore. Even companies with long-proven business models are going to find themselves adapting to use technologies developed for their specific line of business.

Software AG is aiming to become a significant player in IoT - even if it was late to the party. "It's true that there is substantial competition from other companies that have been working in IoT technology for several years already, but we are carving out our own specialties and niches that we believe we will be able to do better than others," said Schouw.

Specifically, there are four areas of IoT that Software AG is targeting. "Smart manufacturing, where sensors and software increase quality control, improve operations, decrease energy consumption, and so on is a natural for us, given our extensive experience in these areas and our German heritage of manufacturing," said Schouw.

A related area is predictive maintenance - the ability to know in advance where production problems due to machine and other types of failure are going to pop up.

"The 'smart' part of this is being able to do it automatically and with fewer staff," said Schouw. "For example, we've been working with Coca-Cola to analyze vending machines remotely, checking to see the status of the cooling systems in the machines and if they are likely to break down. If anything appears problematic, they can send a repair team out to fix the machine before it breaks down, ensuring that it remains active." With nearly three million vending machines around the world, the potential savings for Coca-Cola are significant, said Schouw.

In addition to smart manufacturing and predictive maintenance, Schouw sees opportunities for Software AG in collecting data on users via GPS, beacon technology, and so on, as well as in logistics - both heavily networked and big data-dependent. "We're well-equipped for challenges in both those areas," said Schouw. "We've recently acquired a number of companies that we have integrated into our business platform for both fast networking and mobile tech, as well as advanced data analysis."

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Indeed Software AG has been on a buying spree of late; since 2009, it's acquired nine data, networking, and mobile firms, integrating tech created by firms like Terracotta and Apama (big data), and Longjump (cloud) into the family.

And the company is diving even deeper into the tech. "We see machine learning as another important leg of IoT," said Schouw. "A good example of this is a smart washing machine that I could program to purchase to buy detergent on the internet by itself. I would have to have a way for the machine to figure out which of a range of products to 'buy,' teach it how to announce itself as a customer and enable to present its buying credentials. Then you would want to teach it to 'shop around' and get the best deal on its preferred brand. That is where communications, big data, and machine learning merge." Then you could throw bitcoin technology into the mix as well, said Schouw, an area that Software AG is also seeking to develop.

Software AG is seeking components of all the IoT tech in Israel, said Schouw.

The company already has a strong relationship with the Israeli tech ecosystem. Software AG has been active in Israel since 2005, when it acquired Sabratec , a privately held legacy integration vendor. In 2007, the company acquired two other companies, SPL and Jacada.

All three make up the Software AG R&D center in Israel, but all the companies had been in business for years before the acquisition - especially SPL, which was established in the 1980s and had many of the largest organizations in Israel as customers. "We are really looking very hard to find the tech to fulfill this vision fully," said Schouw. "IoT is a lot more complicated than most people realize. It still is hard to connect a 'thing'."

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