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SAP acquires enterprise architecture vendor LeanIX

LeanIX recently launched a generative AI assistant to help companies map application portfolios, technology that may have helped make this SAP partner attractive to buy.

SAP is getting more fully into enterprise architecture management with the acquisition of LeanIX.

Based in Bonn, Germany, LeanIX is an EAM SaaS provider that gives a visual representation of a customer's IT application architecture, which can be used to identify unused or obsolete applications, according to the company. It can also help with the design of new application landscapes.

LeanIX previously partnered with SAP and SAP Signavio, the process mining vendor that SAP acquired in 2021 and is a constituent part of Rise with SAP and Grow with SAP. Terms of the LeanIX deal, which is set to close later this year, were not disclosed.

The acquisition allows SAP to add its EAM technology alongside SAP Signavio's process-centric technology to help speed customer business technology initiatives, like S/4HANA migrations, said Sebastian Steinhaeuser, chief strategy officer at SAP, in a briefing.

"We are taking the logical next step on that journey with our intent to acquire LeanIX to better support our Rise and Grow customers on their transformation journeys, to build a unique transformation suite with SAP Signavio, and to lay the foundation for AI-enabled process optimization," Steinhaeuser said.

LeanIX and SAP have more than 500 joint customers, and many are already using LeanIX as part of Rise projects, he said.

"Many of our customers have highly complex and interconnected IT landscapes that make it difficult to execute business process changes quickly," Steinhaeuser said. "On the flip side of that, it's almost impossible to make any process changes without making changes to the IT landscape underneath."

LeanIX's generative AI capabilities will help these customers discover and prepare IT architectures and processes for the transformations, he said. The company unveiled a new LeanIX AI Assistant in August to increase automation and recommend future IT architecture designs. The LeanIX AI Assistant was built with Microsoft on the Azure OpenAI Service.

"The goal with SAP's AI is to help our customers get to self-learning, self-automating and self-optimizing processes," Steinhaeuser said. "We're planning that with SAP Signavio to generate process improvements, and now with this combination, we can create a comprehensive foundation for AI-enabled process and IT optimization."

LeanIX technology helps organizations uncover the complexities of the IT environment, which lie under the surface like an iceberg, said Andre Christ, co-founder and CEO at LeanIX. The LeanIX generative AI Assistant is critical to making this happen.

"In the IT architecture, you sometimes know the number of applications, but if you want to know where all the complexity is underneath, you need better tooling," Christ said. "We believe generative AI is the next step for automating processes. We can also help customers make IT and software landscapes AI ready, helping them understand where they can put in AI use cases."

LeanIX EAM software has been available as an SAP Endorsed App on the SAP Store since 2022 and has been integrated with SAP Signavio Process Manager for several years.

LeanIX also has many non-SAP customers who will continue to be supported after the acquisition.

"SAP over the last years has significantly pivoted toward an open ecosystem strategy, so we will fully support all," Steinhaeuser said.

Integration details need to be worked out

The acquisition appears to be a solid move, but details about integration need to be worked out, analysts said.

Understanding systems' IT landscapes is a major challenge for SAP customers as they plan S/4HANA upgrades, and LeanIX can help with this, said Holger Mueller, vice president and principal analyst at Constellation Research.

"But how well this will work in practice needs to be seen, as the details to be considered and the degree of automation expected as an SAP company are significantly higher than as an independent vendor," Mueller said. "The future will tell."

Signavio is a business process mining tool and LeanIX is a portfolio and asset management tool. The integration path is not completely clear, though I can imagine how it might work.
Predrag JakovljevicAnalyst, Technology Evaluation Centers

LeanIX can integrate with SAP Signavio, but it's unclear exactly how this will work, said Predrag Jakovljevic, principal industry analyst at Technology Evaluation Centers.

"LeanIX might integrate with Signavio, but I'm not sure how," Jakovljevic said. "Signavio is a business process mining tool and LeanIX is a portfolio and asset management tool. The integration path is not completely clear, though I can imagine how it might work."

However, the real goal of the acquisition might be LeanIX's generative AI capabilities, said Jon Reed, co-founder of Diginomica, an enterprise industry analysis firm.

"Part of it is that they can add it to their generative AI narrative, because LeanIX is heavily in pursuit of generative AI around things like IT landscape management," Reed said. "The problem is that we're still trying to understand exactly how generative AI will play out in different areas and how useful it's going to be. But this does add to SAPs overall narrative around the scope of their generative AI offerings."

Data is an important part of the generative AI narrative, and it might be more advantageous to have LeanIX's customer AI data around IT landscapes in-house rather than sharing it as a partner, he said.

"The more you have control over customer data in these AI games, the better off you are," Reed said. "That would be a reason why you might want to acquire a partner instead of instead of trying to work out how to pass important data back and forth."

Jim O'Donnell is a senior news writer who covers ERP and other enterprise applications for TechTarget Editorial.

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