Two of Germany’s largest companies in their respective industries — enterprise software powerhouse SAP (NYSE: SAP) and auto parts stalwart Bosch — have announced that they have inked a “memorandum of understanding” to advance cloud-based Internet of Things solutions to improve manufacturing and logistics processes.
Bosch is a longtime customer of SAP, and that arrangement has now been extended to include the development of “new, smart solutions.” Bosch is an early adopter of IoT-related manufacturing solutions, and will now add SAP’s HANA cloud database platform to its IoT cloud. According to SAP, the partnership will enable “secure and more efficient connectivity for vehicles, manufacturing machinery, or tools with various, and preferably, open platforms.”
As an example of how SAP and Bosch envision the alliance benefiting the manufacturing process, connected screwdrivers will be able to contact an intelligent computing system, instantly identifying their locations, and determining the torque needed to complete their particular tasks. Similarly, smart forklifts will be systematically positioned to enhance logistics and productivity.
In conjunction with its existing IoT processes, Bosch expects this expansion of its cloud-based IoT solutions will help it realize approximately $1.1 billion in savings by 2020, and that may prove to be a conservative forecast. According to a recent study, IoT will become an estimated $14.4 trillion market by 2022. Of that sum, the manufacturing industry is expected to garner a whopping 27%, easily making it the largest benefactor of the skyrocketing technology.
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Tim Brugger has no position in any stocks mentioned.
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