SAP (NYSE: SAP) has joined the Linux Foundations Hyperledger project as a Premier member. Hyperledger, who's news of late has been primarily surrounded IBM's Clouware based ledger, is an organization who is currently focused on distributed ledgers and may have some plans for blockchain based applications in the future, however, to date they haven't focused on blockchain based applications and have aimed their resources at distributed ledgers, also known as DLT.

In fact Hyperledger has stated publicly that they currently have no plans for tokenized or incentive based networks which limits their scope to only DLT's. 

The Giant Awakens

Unless you've been living under a rock your entire life, you likely know SAP, they are the oldest software company on the planet and the 2nd largest (next to Microsoft) overall. Their flagship ERP system, SAP, has been around for nearly 50 years. 

It's morphed over the years as SAP R/2, SAP R/3, mySAP (that's what we get for allowing the 90's), and in its current form SAP ECC (ERP Central Component).

In many ways SAP is the grandfather of distributed technology. Most of the DLT's available now aren't even necessary if you operate SAP since SAP can do all of this stuff. It's robust Workflow system allows for cross-organization approvals and almost everything we've seen from the DLT and blockchain efforts can already be done within SAP including consensus. However, consensus would require modifications so there is no current offering from SAP for this functionality. 

There's two things it cannot do however. It cannot

  1. Provide the level of security that something like bitcoins blockchain can; or,
  2. Ensure immutable transaction recording.

On that same note, neither can anything Hyperledger or IBM currently offers so it seems apparent that SAP is interested in the consensus. Quite possibly to incorporate this functionality into its workflow system for cross-company and cross-organization transactions.

Putting consensus into SAP is rather simple if all organization are running SAP. SAP's IDOC's (Intermediate Documents) and come basic ABAP customization's could be easily implemented for that. 

The hat trick is when other organizations are not running SAP. Currently that requires EDI, Middleware, or VAN's (value added networks) along side paper contracts to govern the transactions. 

DLT would help alleviate some of that between parties that trust each other or are forced to trust each other because of signed paperwork and armies of attorneys.

In SAP customary blanket and vague form, they state they are planning to use blockchain technology in existing and new business scenarios.

“We believe blockchain is a transformative technology for enterprise businesses. We are committed to advancing its adoption via the creation of new standards, use cases, platforms and open applications,” said Juergen Mueller, Chief Innovation Officer, SAP. “In joining Hyperledger, we plan to share our expertise and knowledge to help bring open distributed ledger technology to all businesses.”

Hyperledger is not working on blockchain technology, despite what their marketing material might state, but the open distributed ledger part is accurate. Someone else likely wrote that statement anyway, so we'll just leave it at that.

“Having support from an enterprise software and cloud leader like SAP is an important step in the right direction,” said Brian Behlendorf, Executive Director, Hyperledger. “The diversity of our members is a real strength, as we look to advance open blockchain technology POCs, pilots and production deployments across many industries this year. I couldn’t be happier to see the level of collaboration and progress that is happening among our community right now.”

They'll have gained some educational value from SAP who's code base is primed for DLT. The difference is however that SAP requires a central server and some SAP databases are 50 terabytes or more with multiple application servers required for operation. 

That leads to some interesting challenges, for SAP to realistically use DLT, it would need to integrated a limited amount of transactional data with the larger central system and likely the direction they will head. 

As part of SAP’s Premier membership, Dominik Heere, Vice President, Innovation Engineering, SAP Innovation Center Network, will represent the company on the Hyperledger Governing Board.

Article by John Leonard 
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