TOPTECHNOLOGYTRENDS

Top 5 technology trends that are enablingthe digital economy and changing thebusiness landscape

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EXECUTIVE SUMMARY

We are witnessing an unmatched era of true business innovation. Breakthrough technologies havematured and hit scale together, enabling 5 defining trends:

Perfect Storm: 5 Technology Trends Changing Everything

Every consumer and every machine is connected, disrupting all theestablished rules around business channels. Connectivity drives themovement of goods, services, people, knowledge and wealth.

HYPERCONNECTIVITY

The limits of 20th century computing power are gone. Networking andin-memory computing allow for the creation of infinite new businessopportunities.

SUPER COMPUTING

Technology adoption and business innovation now move at lightningspeed. Technology infrastructure is now rented to eliminate barriersto entry. B2B transaction are moving to new cloud basedcollaboration platforms, where millions of businesses and users areconnected in a matter of days.

CLOUD COMPUTING

Sensors, robotics, 3D printing and artificial intelligence are the newnormal. The new Outcome-Based Economy replaces products andservices with outcomes. Business will manage products they are

8.

SMARTER WORLD

Bad actors have expansive new capabilities to attack, undermine anddisrupt businesses. Trust remains the ultimate currency, givingsecurity-focused businesses a significant advantage in brandreputation.

CYBER SECURITY

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Deliver higher value by engaging with the hyperconnected world to reach newcustomers, create new products and services, and ultimately enter new markets

Connecting the world with roads, shipping routes,railways and airports was a key enabler to themovement of goods and knowledge during theindustrial age. These connections are directly relatedto wealth creation.

In a digital economy, we are witnessing an explosion inconnections at the individual and machine level. Thisexponential hyper connectivity is driving newchannels to reach customers and new ways tooptimize assets to make the world a better place.

We believe that hyperconnectivity will makean impact across four dimensions:

1. PeopleWith an unprecedented 3.1B people 9 connectedto the Internet, companies have an amazingmarket opportunity. This is opening the door toa new world of personalization.

2. BusinessFor years, industry standards have allowed B2Bcommerce at an industry segment level. We arewitnessing the emergence of the network ofnetworks. This is enabling digitization byconnecting businesses with suppliers across allservice categories at new levels of efficiency andin real-time.

3. CommunitiesMillions of people are leveraging specializedcommunities to provide services, shareknowledge and engage in commerce.Businesses need to leverage these communitiesto enhance customer engagement, drivepersonalized experiences and align effortsacross the value chain to maximize valuepotential.

4. SensorsSensors are more reliable, last longer, and costa lot less. This technology breakthrough isdriving what is known as the Internet of Thingsand big data and will drive value creationthrough a real-time and predictive world.

Sensor prices havedropped to an average60 cents from $1.30in the past 10 yearsSource: Goldman Sachs 11

3.1B InternetUsers WorldwideSource: Miniwatts MarketingGroup 9

1.9M companiesconnected to the ARIBANetwork.Source: SAP

1.3B people on socialnetworksSource: Nielsen 10

Hyperconnectivity2 3 4 51

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Super Computing3 4 51 2

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PredictiveColumnar OLTP+OLAP

GraphDynamic Tiering

SpatialSearch

SAPHANA

Data ModelingTextPlanningMultitenant ContainersFunctionsSmart Data Quality

On-Premise | Cloud | Hybrid

REALITYOnly 20 30% of IT budgets arededicated to InnovationCompanies have on average 36applications/$1B in revenue

Source: SAP Benchmarking

SOLUTION7X faster throughput and 10X smallerdata footprint1800X faster analytics and reporting65% reduction in resource consumption

Source: SAP, Deloitte 12

MAKING IT REALIncrease in processing speed isequivalent to reducing a London-NY flight from 8.25 hours to 8.42secondsSource: Deloitte 13

Since the inception of business applications,companies lived with a major limitation. Transactionand analytic systems required separate landscapesresulting in complexities (data redundancy, batchjobs, complex systems, high costs)

After 8 years of innovation and development, SAP,under the direction of Hasso Plattner and strategicpartners, has cracked the code on a completely newplatform that eliminates keeping transactions andanalytics separate. This technology, SAP HANA,brings this massive breakthrough to the businessworld.

SAP HANA is more than just a database, it is aplatform to manage digital business. Although thetechnology is new, we are witnessing 7,200companies leveraging it to re-imagine business.

The value that this technology bringsincludes:

1. Real-time BusinessSupply chain, finance, and other processes canrun in minutes not hours or days, changing howpeople work, how business is optimized and canfocus on predicting and optimizing the future.

2. Business AgilityChange such as reorganizations, productlaunches, etc. can be made in 1/10th the time.This provides business with the agility to be fastand nimble.

3. Step-Change in ProductivityBusiness users have the sophistication they getas consumers in the workplace. With smartapps, transactions are run on any device, data ismined at any level of granularity, andsimulations and predictive analytics are used toderive the perfect decision.

4. Reduce Total Cost of OwnershipTCO has dramatically reduced due to thecollapse of architecture, less customizations,ability to run large volumes of data in a singlecomputer, and cloud deployment options.Architecture simplification will also enable lesspoints of failure. Companies can shift their ITspend to innovation and value creation.

Large scale in-memory computing is a breakthrough that collapses transactionaland analytical processing into a single platform dramatically reducing cost andenabling massive business simplification and value creation.

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Projected spending on cloudcomputing infrastructure and platformswill grow at a 30% CAGR from 2013through 2018 compared with 5%growth for overall enterprise ITSource: Goldman Sachs 15

$800B+ in businesscommerce through theAriba networkSource: SAP, Ariba

Global SaaS software revenues areforecasted to reach $106B in 2016,increasing 21% over projected 2015spending levelsSource: Forrester 14

Most companies will be living in a hybrid world wherecloud technologies will be interacting with on-premiseapps. Most innovations are delivered as cloud appsand the value is proven. With faster time to value,capabilities available in the network and the rise inadoption, cloud is a force that must be reckoned with.

We believe that there are four cloud deliverymodels which must be evaluated:

1. Software as a Service (SaaS)Saas is a mature trend with companies likeAriba providing solutions via the cloud. SAP isthe #1 company with 80M+ users leveragingSaaS. With SaaS growing 20+%, we see moreapps moving into the cloud. While this isdominated by CRM, procurement, and HR,other apps like ERP are also moving into thecloud.

2. Platform as a Service (PaaS)PaaS provides an entire computing platform inthe cloud including hardware, software andopen APIs to build new businesses and createnew solutions. Apple is a great example and

disruptive platform for business.

3. Infrastructure as a Service (IaaS)Businesses are leveraging IaaS to get up andrunning in a matter of hours without spendingsignificant capital expense. This is possiblethrough IaaS like Amazon Web Services. EvenFacebook and others are opening their platformand architecture to develop solutions via IaaS.

4. Business NetworksCompanies are connecting and sharinginformation and transactions within the cloud.This collaboration will change how commerce isdone. SAP Ariba is leading this with ~ 1.9M+companies connected and $800B+ in businesscommerce. We believe there will be trillions ofdollars of business commerce creatingefficiencies in the way business is conducted.

Cloud computing will accelerate time to value, drive higher adoption of newtechnologies and connect value chains in real-time. Organizations will need toevaluate exactly which delivery models will help them continue to innovate faster.

Cloud Computing

SaaS Business Network

B2B Payment

Supplier

Apple iTunes

LogisticsCustomer

Employee

Supply ChainManagement

SAP HANA

PaaS

FacebookPlatform

Google Store

Amazon

IBM

Oracle

HP

IaaSkey

Smarter World4 51 2 3

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The economic implications of3-D printing are significant withup to $550 billion a year by 2025Source: McKinsey Global Institute 18

The global industrial robotpopulation to double toabout four million by 2020.Source: HBR 16

The fastest growing segments through2020 include Home Energy Conservationwith a CAGR of 49.4% and IoT in UtilityMonitoring with a CAGR of 59.8%.Source: Mind Commerce17

The world is becoming smarter with the digitaleconomy and this is influencing companies indramatic ways. Companies can leverage big data andnew technologies to change everything from productdesign to how customers are served. Industry linesare blurred and companies need to innovate or willlose market share.

In order to compete, every company must be atechnology company. Companies are creating newbusiness models, embedding software in productsand focusing on business outcomes.

There are four innovations enabling theworld to become smarter:

1. Smarter RobotsRobotics has re-defined manufacturing as theyhave become more humanized with soft skills,can take on tasks without human interventionand are available at a low cost.

2. Smarter PrintingWith 3D printing, companies can enable tightvalue chain integration. This goes beyondproviding products faster to customers.Consumers can print their own products.Companies can make spare parts on demand.The value includes faster time to market,reduced cycle times and supply chain cost andnew revenue sources.

3. Artificial IntelligenceThe explosive growth of structured andunstructured data can be analyzed via AI.Computers can answer questions faster thanhumans through machine-based algorithms.Software can self learn and companies likeFacebook and Google are demonstrating this.

4. Smart ProductsSmart products will change how businesses andconsumers interact and ultimately change theworld. Examples like self-driving cars and usageand/or performance-based contracts areexamples of this.

Smarter robots, smarter printing, artificial intelligence, and smarter productswill completely re-shape value chains, industries, and ultimately the world.

Cyber-security51 2 3 4

Securing Identities

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1010Securing Data

SecuringInteractions

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In 2014, 47% of American Adultshad their personal informationexposed by hackersSource: Ponemon Institute 19

Five out of six large companieswere targeted by cybercriminals, a40% rise on the previous yearSource: Symantec, 2015 20

Globally, cyber crime costsbusinesses $375-$575B billionannually and a net loss of up to200,000 jobs in the U.S. aloneSource: McAfee 21

Corporate spying and digital theft are on the rise andorganizations need to address cyber-security at thecorporate level. Employees and customers alsoexpect a consumer-grade experience leading toadditional security risks.

Managing security across your digital business mustbe accomplished through proper governance. Thisreduces TCO, business risk and compliance breachesand solidifies the trust of your customers.

The following four cyber-securityelements should be addressed:

With ever-increasing risk of corporate spying and digital theft, cyber-securitymust be addressed as organizations set and execute their digital strategy.

1. Securing DataSecuring data in hybrid environments requirescompanies and their partners to stay compliantwith data privacy and compliance regulations,understand local data controls and establishencryption and classification criteria.

2. Securing InteractionsValue chain interactions must be secured. JointSLAs should be in place with partners, checksshould be at the application level to preventwide-spread impact and connectivity should besafeguarded.

3. Securing IdentitiesAccess to digital information should berestricted to authorized users. There should becentral authentication regardless of device anddevices must be maintained to prevent hackersfrom gaining access to your digital IP.

4. Partner with Trusted SuppliersSupplier relationships are key in establishingtrust as more non-core processes areoutsourced. Companies should buildrelationships with a few partners who will meetthe highest security standards. This will alsoresult in a more simple and nimble architecture.