Internet of Services. Universität Karlsruhe (TH) 18. Juni Dr. York Sure CEC Karlsruhe SAP Research

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1 Internet of Services Universität Karlsruhe (TH) 18. Juni 2008 SYSTEMATIC THOUGHT LEADERSHIP FOR INNOVATIVE BUSINESS Dr. York Sure CEC Karlsruhe SAP Research

2 Agenda Internet of Services 1. The Rise of Services 2. Internet Trading 3. Internet of Services SAP 2008 / Page 2

3 Demo: EU services sirective Towards an open plattform for constituent-centric services SAP 2008 / Page 3

4 Introduction What is a service, anyway? Easy to define what a service is not excludes harvesting the land and manufacturing automobiles Economist: anything sold in trade that cannot be dropped on your foot SAP 2008 / Page 4

5 Trend: Tertiarisation Growth through services Building Sector 6% Commerce, Hotel and Restaurant Industry and Transport Sector 17,9% Gross Value Added in Germany Finance, Leasing and Business Service Provider 23,3% Commerce, Hotel and Restaurant Industry and Transport Sector 18,0% 62,0% Building Sector 69,4% 3,9% Finance, Leasing and Business Service Provider 29,1% Industry (without Building Sector) 30,6% Agriculture and Forestry, Fishery 1,4% Public and Private Service Provider 20,8% Industry (without Building Sector) 25,8% Agriculture and Forestry, Fishery 0,9% Public and Private Service Provider 22,3% Source: Statistisches Bundesamt, 2006 SAP 2008 / Page 5

6 Trend: Tertiarisation Employment through services Employees in Germany 30 m 25 m 20 m 59,5% (23,0 m) +4,9 m Services 71,9% (27,9 m) 15 m 10 m 5 m 29,3% (11,3 m) 7,3% 3,9% -3,4 m Industry without Building Sector Building Sector Agriculture and Forestry, Fishery 20,3% (7,9 m) 5,5% 2,2% 1991 (Total: 38,6 m) (Total: 38,8 m) SAP 2008 / Page 6

7 Trend: Focusing on Core Competencies Consolidation & Reducing the Value Chain Number of independent OEMs Percentage of value addition "Most likely survivors" GM DaimlerChrysler Ford VW Renault/Nissan Toyota 100% OEM Supplier SAP 2008 / Page 7

8 Consequence: Agility Flexible Business Processes of the Future HARD-WIRED VALUE CHAIN SPECIALIZATION & CONSOLIDATION BUSINESS WEB SAP 2008 / Page 8

9 Convergence Physical products and services From product to solutions Drilling machine Drilling holes Mobile Navigation Software- CD Software as a Service SAP 2007 / Page 9 SAP 2008 / Page 9

10 Agenda 1. The Rise of Services 2. Internet Trading 3. Internet of Services SAP 2008 / Page 10

11 Amazon Major company to sell goods over the Internet Started with books, diversified product lines largely ( and counting) Long tail business model Revenue in 2006: US$10.7 billion Partner Program Every partner can set links to Amazon products on own webpage and is rewarded for created revenues by visitors of the links Every partner can create own stores to offer own and Amazon products Over registered partners world-wide Self-enforcing process: Links are ranked highly in search engines which makes Amazon more attractive Services Marketplace, Web Services, S3, EC2, Mechanical Turk, Flexible Payment Service, Unbox, MP3 Downloads (and counting) SAP 2008 / Page 11

12 itunes Internet Store + Application + Hardware itunes Store Sold more than 3 billion songs in first 4 years (July 2007) Market share of more than 80% of worldwide online digital music sales Single-price business model Connects easily with itunes application itunes application Buying, playing and organizing digital media Bundled with Macs and some HPs and Dells, available for major OSs Connects easily with ipod ipod Digital music player Sold over 110 million times (September 2007) SAP 2008 / Page 12

13 Software as a Service (SaaS) Software application delivery model Vendor develops, hosts and operates web-native applications Customers pay per use, not for owning Targets business users (in contrast: Web2.0 is for consumers) Price per-user business model Characteristics (IDC) Network-based access to and management of commercially available software Services offered from central location, but accessible via Web One-to-many model (single instance, multi-tenant architecture) Typical applications and vendors , CRM, HR, Accounting, Video Conferencing, Salesforce, SAP BusinessBy Design SAP 2008 / Page 13

14 Introducing... SAP Business ByDesign The Most Complete, Adaptable On-Demand Business Solution IT IT IT IT IT IT IT IT IT IT IT 360 Degree Solution Easy-to-Use and Adapt Predictable, Affordable, Manageable IT SAP 2008 / Page 14

15 Agenda 1. The Rise of Services 2. Internet Trading 3. Internet of Services SAP 2008 / Page 15

16 The Big Picture: Vision of a web-based Service Economy NETWORK PARTICIPANTS GOVERNMENT & INFRASTRUCTURE egovernment, eenergy, ehealth, Public Security BUSINESS & SCIENCE Cluster/SME, new Service and Business Models CITIZEN/CONSUMER/ EMPLOYEE Digital Lifestyle, New Media, Communities, Collaboration OPEN SERVICE DELIVERY PLATFORM SECURE BROADBAND INFRASTRUCTURE INTERNET of SERVICES SERVICE-/USER- FRIENDLY IT NETWORK ENABLER AND FOUNDATION MULTIMEDIA CONTENT INTERNET of THINGS SERVICE-ORIENTED SOFTWARE APPLICATIONS SAP 2008 / Page 16

17 Internet of Services the Gathering Clouds Rearden Commerce Salesforce StrikeIron USA.gov directgov.uk applicationmarketplace.com.au TradeExchange.com Alibaba.com Microsoft CSF HP (SDP 2.0) nttdocomo.com jnetx 22.verizon.com SAP SAP / Page / Page 17 17

18 Process for exporting goods in foreign trade - a simple process? Order request Confirmation of the order Assure financing by home bank Declare products to ship at customs Logistics provider transports products to the harbor Overseas Forwarding takes care of loading of the goods onto ship Confirmation of the handover to the ocean carrier is sent to Shipper for sales tax and insurance Bank to initiate bank transfer Receipt of the payment SAP 2008 / Page 18

19 The service aspects of exporting goods in foreign trade are non-trivial Foreign trade processing is a complex service For SMEs, foreign trade processing is NOT a core competence A reliable value-added service provider coordinates the process on behalf of the seller Order Order Shipment Shipment Seller Payment Buyer Seller Payment Buyer Foreign Trade: value-added service Logistics Provider Customs Insurance Logistics Provider Customs Insurance Ocean Carrier Carrier Bank AKA Hermes Ocean Carrier Carrier Bank AKA Hermes Execution of export via seller Execution of export via value-added service provider SAP 2008 / Page 19

20 Diversified Partnerships for Service Supply: from the Cloud to the Sky Service Gateway Service Aggregator Service Broker Service Channel Service provider community B2B standards QoS management - security, reliability, etc. Systems management Third party aggregators New service offers: bundles and variants Service re-factoring Marketplaces: service publication, discovery, ordering, rewards etc Managed service delivery Cost subsidising partners (e.g. advertisers, marketers) Services at the edge Widgets, mash-ups Integrated Web authoring Mobility and multimodal interactions Personalization, context awareness, service contacts you SAP SAP / Page / Page 20 20

21 Demo: Service consumption SAP 2008 / Page 21

22 New service provisioning trends Partner ecosystems Single clouds Web, content and widgets services Structured classifications and search Open marketplace ecosystems Sky grids Convergent digital/transaction services, business, human, multi-step, multi-stakeholder Structured and unstructured sources for search natural language search Conventional composition of services mashups, service orchestration Basic interactions: order-request-response Formalization of service variants and service bundles Negotiations and tendering as part of ordering, pay-as-you-go SAP / Page 22

23 Thank you! Dr. York Sure CEC Karlsruhe SAP Research SAP 2008 / Page 23

24 Copyright 2007 SAP AG All rights reserved No part of this publication may be reproduced or transmitted in any form or for any purpose without the express permission of SAP AG. The information contained herein may be changed without prior notice. Some software products marketed by SAP AG and its distributors contain proprietary software components of other software vendors. SAP, R/3, mysap, mysap.com, xapps, xapp, SAP NetWeaver, Duet, Business ByDesign, ByDesign, PartnerEdge and other SAP products and services mentioned herein as well as their respective logos are trademarks or registered trademarks of SAP AG in Germany and in several other countries all over the world. All other product and service names mentioned and associated logos displayed are the trademarks of their respective companies. Data contained in this document serves informational purposes only. National product specifications may vary. The information in this document is proprietary to SAP. This document is a preliminary version and not subject to your license agreement or any other agreement with SAP. This document contains only intended strategies, developments, and functionalities of the SAP product and is not intended to be binding upon SAP to any particular course of business, product strategy, and/or development. SAP assumes no responsibility for errors or omissions in this document. SAP does not warrant the accuracy or completeness of the information, text, graphics, links, or other items contained within this material. This document is provided without a warranty of any kind, either express or implied, including but not limited to the implied warranties of merchantability, fitness for a particular purpose, or non-infringement. SAP shall have no liability for damages of any kind including without limitation direct, special, indirect, or consequential damages that may result from the use of these materials. This limitation shall not apply in cases of intent or gross negligence. The statutory liability for personal injury and defective products is not affected. SAP has no control over the information that you may access through the use of hot links contained in these materials and does not endorse your use of third-party Web pages nor provide any warranty whatsoever relating to third-party Web pages Weitergabe und Vervielfältigung dieser Publikation oder von Teilen daraus sind, zu welchem Zweck und in welcher Form auch immer, ohne die ausdrückliche schriftliche Genehmigung durch SAP AG nicht gestattet. In dieser Publikation enthaltene Informationen können ohne vorherige Ankündigung geändert werden. Einige von der SAP AG und deren Vertriebspartnern vertriebene Softwareprodukte können Softwarekomponenten umfassen, die Eigentum anderer Softwarehersteller sind. SAP, R/3, mysap, mysap.com, xapps, xapp, SAP NetWeaver, Duet, Business ByDesign, ByDesign, PartnerEdge und andere in diesem Dokument erwähnte SAP-Produkte und Services sowie die dazugehörigen Logos sind Marken oder eingetragene Marken der SAP AG in Deutschland und in mehreren anderen Ländern weltweit. Alle anderen in diesem Dokument erwähnten Namen von Produkten und Services sowie die damit verbundenen Firmenlogos sind Marken der jeweiligen Unternehmen. Die Angaben im Text sind unverbindlich und dienen lediglich zu Informationszwecken. Produkte können länderspezifische Unterschiede aufweisen. Die in diesem Dokument enthaltenen Informationen sind Eigentum von SAP. Dieses Dokument ist eine Vorabversion und unterliegt nicht Ihrer Lizenzvereinbarung oder einer anderen Vereinbarung mit SAP. Dieses Dokument enthält nur vorgesehene Strategien, Entwicklungen und Funktionen des SAP -Produkts und ist für SAP nicht bindend, einen bestimmten Geschäftsweg, eine Produktstrategie bzw. -entwicklung einzuschlagen. SAP übernimmt keine Verantwortung für Fehler oder Auslassungen in diesen Materialien. SAP garantiert nicht die Richtigkeit oder Vollständigkeit der Informationen, Texte, Grafiken, Links oder anderer in diesen Materialien enthaltenen Elemente. Diese Publikation wird ohne jegliche Gewähr, weder ausdrücklich noch stillschweigend, bereitgestellt. Dies gilt u. a., aber nicht ausschließlich, hinsichtlich der Gewährleistung der Marktgängigkeit und der Eignung für einen bestimmten Zweck sowie für die Gewährleistung der Nichtverletzung geltenden Rechts. SAP übernimmt keine Haftung für Schäden jeglicher Art, einschließlich und ohne Einschränkung für direkte, spezielle, indirekte oder Folgeschäden im Zusammenhang mit der Verwendung dieser Unterlagen. Diese Einschränkung gilt nicht bei Vorsatz oder grober Fahrlässigkeit. Die gesetzliche Haftung bei Personenschäden oder die Produkthaftung bleibt unberührt. Die Informationen, auf die Sie möglicherweise über die in diesem Material enthaltenen Hotlinks zugreifen, unterliegen nicht dem Einfluss von SAP, und SAP unterstützt nicht die Nutzung von Internetseiten Dritter durch Sie und gibt keinerlei Gewährleistungen oder Zusagen über Internetseiten Dritter ab. Alle Rechte vorbehalten. SAP 2008 / Page 24

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