SAP and Bosch team up on Internet of Things

September 21, 2016 6:11 AM EDT

The logo of German software group SAP is pictured at its headquarters in Walldorf, Germany, May 12, 2016. REUTERS/Ralph Orlowski/File Photo

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WALLDORF, Germany (Reuters) - Europe's biggest software firm SAP and German car parts maker Robert Bosch [ROBG.UL] have signed an agreement to partner to connect everything from screwdrivers to cars to the internet.

The companies said on Wednesday they will combine Bosch's platform and SAP's back-end software to connect vehicles, manufacturing machinery and tools of Bosch customers.

By 2020, some 21 billion Internet of Things (IoT) devices will be in use worldwide, up from fewer than 5 billion last year, research firm Gartner has estimated.

The companies said they planned to make SAP's real-time database HANA available to Bosch customers to monitor production processes.

The technology, for example, allows a production system to select the torque for each screwdriver's task, increasing efficiency.

A long-time SAP customer, Bosch expects its own "connected industry" activities to deliver 1 billion euros ($1.12 billion) in cost savings by 2020 and to generate an additional 1 billion euros in sales.

(Reporting by Harro ten Wolde; editing by Jason Neely)

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