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This is part three in a four-part series. You can read part one here and part two here.

In a recent piece about our rapidly growing data footprints, I wrote about a jet engine that has been made cleaner, quieter, and more powerful thanks to the addition of sensors that track its every move, generating approximately 1 terabyte of data every day of operation. So was that story about big data or the Internet of Things (IoT)?

It seems that the two have become inextricably linked. Lately it has become difficult to have a conversation about big data without also talking about machine data, sensors, and the accelerating digitalization of the physical world. To say that IoT is a hot topic within the larger big data community is an understatement.

What’s driving the hype around the IoT?

The first driver is the pace at which the IoT is growing. Big data research by EMA / 9sight Consulting shows that 38% of the stakeholders surveyed identified machine-generated data as a contributor to their overall data sets (more than any other category), up from 24% the previous year. With the number of connected devices in the world now exceeding the number of human beings, and with these devices increasing at a rate 5X that of human population growth, machine data will certainly continue to grow.

The second driver comes from businesses recognizing the tremendous opportunity that the IoT represents. IDC, for example, predicts that the IoT market will be greater than $7 trillion by 2020. GE projects a $10-15 trillion market, and Cisco predicts a $19 trillion IOT market by 2020.  SAP’s Michael Lynch projects the total opportunity at $14 trillion in increased revenues and lowered costs. For Michael the value proposition for IoT is about achieving business outcomes in new, unexpected ways as companies transform their businesses in a new application environment, powered by a real-time platform, and enabled by business networks.

Numbers talk!

The Hamburg Port Authority (HPA) manages 10,000 ships and more than 9 million containers each year. With 550 trucks entering the port every day, there is substantial economic value to be derived from even small efficiency gains when it comes to traffic. HPA is an early adopter of SAP Connected  logistics, which enables logistics hub operators to monitor incoming and outgoing traffic and to manage communication between ships, trucks, container gates, dockworkers, and HPA facilities management.


Via unified smart-device data, HPA now has real-time visibility across more than 400 entities in its logistics business network. Truckers know whether and when a ship has arrived, the optimal route to their gate, and where they can find a parking space. The new solution is improving traffic flow and, and more importantly, increasing the rate of container turnover – improving HPA’s bottom line via greater efficiency.

Like the jet engine that became more powerful and efficient through data analysis, HPA is demonstrating how a massive logistics operation can become a well-tuned engine in its own right.  But the story doesn’t end with logistics.

The fourth V is key

In defining big data it is conventional to talk about the three V’s: volume, velocity, and variety. There is no question that data from the Internet of Things contributes all of these qualities to a big data environment, with the greatest impact probably in the area of volume. However, as we’ve seen from the examples above, the IoT is bringing another V into play: value. We can expect to hear much more in the weeks and months to come about the IoT and the unprecedented value that businesses are deriving from the data it provides.