*NEWS: Upcoming OC Innovation Center Targets Horizon 3 Innovation

A new innovation center is under construction in Newport Beach, with the intention of also being a community center for co-working, coffee and events.

SAP — with worldwide HQ in Germany, an East Coast presence outside Philadelphia, and a Silicon Valley presence in Palo Alto — is building an innovation center on Lido Isle. The international conglomerate is a leader in the development of enterprise resource planning software.

It’s had a facility in Irvine for the past 25 years, but this new building will focus exclusively on innovation, especially the forward-looking realm known as Horizon 3.

While Horizon 1 pertains to maintaining and defending a company’s core business and Horizon 2 is nurturing an emerging business, i.e. taking what’s already there and extending it into new areas of revenue-driving activity, Horizon 3 is the next leap – creating genuinely new business, i.e. introducing entirely new elements that don’t exist today.

SAP was looking for a SoCal beachhead, and found a geographically desirable location in OC, Daniel Zimmer, general manager of the SAP Innovation Center SoCal, told the audience at OCTANe’s recent medtech forum.

This center is under construction and expected to open in Q1 next year. It’s expected to focus first on healthcare innovation, running the gamut from AI to robotics.

The fact that SAP chose OC for its SoCal location underscores the significance of OC’s startup/innovation ecosystem and its importance to the entire region, said Bill Carpou, OCTANe’s CEO.

“It’s not traditional for an East coast company to establish a presence in OC,” he said, especially since SAP already has an innovation center in Silicon Valley.

In fact, Zimmer ran that innovation center, known as HanaHaus, prior to moving to SoCal and spearheading the construction of the new one. SAP employs about 4,000 people in the San Francisco Bay Area.

He said he has not seen a slow down in the innovation mindset of Silicon Valley due to the residual effects of the tech explosion there from Google, Facebook and the like. While deleterious factors like the exorbitant cost of housing and the logjam of traffic continue to plague the area, it hasn’t affected the innovative energy, he said.

More than a thousand hospitals and healthcare centers already use SAP’s software for operations. SAP also has partnerships with EMR companies. It also provides big data and analytics services for businesses.

“What we want to tackle in OC is, ‘How can we make the whole (healthcare) process smoother?’” said Harrison Fox, SAP’s director of product management in Germany. “There’s a big demand on doctors and patients. Technology has helped with the quality of care, but not the costs and the patient experience.”

To that end, SAP wants to continue its pattern of “co-innovation,” finding local partners to co-develop and co-innovate with. It typically brings its employees to these partner sites to quickly iterate new concepts and products and test them.

SAP started its innovation presence in OC with an office at the Cove, the physical space of Applied Innovation, UCI’s innovation center.

Carpou called Lido Isle an “edgy location.” Zimmer said SAP chose it because of its high- density, which typically creates a conducive environment for innovation.

Access to all sorts of talent was a big motivating force in choosing OC also, Zimmer said. The company is currently hiring a lot of engineers to fill the innovation center when it opens. It’s already hired 11, mostly software developers, with machine learning backgrounds, as well as a few data scientists.

Zimmer called OC an area of “bold vision and capital,” referring to the likes of Walt Disney creating Disneyland and the Irvine family creating the Irvine Company. He’d like to see OC as the “center of gravity” in terms of the entire SoCal innovation ecosystem.

About The Author

Deirdre Newman is a long-time journalist, who's covered OC startups for a few years.

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