SAP is pushing hard with its Leonardo program this year at its annual Sapphire user conference. Think of Leonardo as a center of expertise which enables SAP’s customers to exploit emerging technologies like big data, machine learning, and IOT. In some cases, these technologies will be integrated into the core SAP offering, and in some cases, they might stand alone.
The company also offers customer’s design thinking services and expertise with their digital transformation programs via professional services.
The wins for the customer from emerging technologies are potentially significant. For instance, Adidas CIO Michael Voegele told Sapphire delegates how his company uses machine learning to spot consumer trends. It then adjusts its supply chain management to respond to those trends with greater agility. Although this collaboration with SAP predated Leonardo, its a good example of how SAP wants to work with its clients.
However bubbling away under the surface of the event, in panels and other sessions, is the question of why SAP is also pushing blockchain – a technology utterly unsuited for the scale at which the global enterprise businesses who SAP chases – operate.
The most mature implementation of blockchain in the world is bitcoin, which caps out at seven transactions a second and takes 10 minutes to create a new block. Compare that to the needs of a financial services business like Visa which typically processes close to 2000 transactions per second and can theoretically handle more than 10 times that amount. Or an advertising technology company like retargeter AdRoll which measures its performance in millions of transactions per second.
Blockchain is still years away from being able to meet such transactional requirements, assuming it ever will.
About the most robust defense of its inclusion in Leonardo is that there a few small and quite precise applications where the blockchain might add value.
Or maybe there is a hint of accidental honesty in CEO Bill McDermott’s reference to SAP as providing the world largest centralized general ledger when answering a blockchain question on the first morning of the show. Perhaps SAP is taking a defensive view that it needs to be able to respond if the world suddenly decides a distributed ledger is a much better idea – and those severe technical limitations can be overcome.
But it seems the answer is more prosaic as we discovered on the second afternoon of the show when we finally had to chance to ask SAP Chief Innovation Officer Jurgen Mueller (main picture, second left), “Blockchain, dude, what gives?”
Mueller told Which-50, “I agree with your assessment [about blockchain’s maturity]. In our Leonardo cluster, we have blockchain more in our horizon 3.”
In other words, way out on the cutting edge.
In SAP’s view Blockchain is in the same category as something like quantum computing. “So with quantum computing, hopefully in five to seven years we will see quantum computers that are as a capable as normal computers.”
“We treat it (blockchain) differently when it comes to KPIs and what we expect from the team working on that technology is very different from what we expect from for example the analytics team or the machine learning team.