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Traded asISIN: DE0007164600 FWBSAP NYSESAP
IndustryEnterprise software
FoundedWeinheim, Germany, EU (1972)
Founder(s)Dietmar Hopp
Hans-Werner Hector
Hasso Plattner
Klaus Tschira
Claus Wellenreuther
HeadquartersWalldorf, Germany
Area servedWorldwide
Key peopleHasso Plattner (Chairman)
Jim H. Snabe (Co-CEO)
Bill McDermott (Co-CEO)
ProductsSee list of SAP products.
RevenueIncrease 16.22 billion (2012)[1]
Operating incomeDecrease €4.064 billion (2012)[1]
ProfitDecrease €2.826 billion (2012)[1]
Total assetsIncrease €26.87 billion (2012)[1]
Total equityIncrease €14.16 billion (2012)[1]
Employees64,598 (2012)[1]
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Traded asISIN: DE0007164600 FWBSAP NYSESAP
IndustryEnterprise software
FoundedWeinheim, Germany, EU (1972)
Founder(s)Dietmar Hopp
Hans-Werner Hector
Hasso Plattner
Klaus Tschira
Claus Wellenreuther
HeadquartersWalldorf, Germany
Area servedWorldwide
Key peopleHasso Plattner (Chairman)
Jim H. Snabe (Co-CEO)
Bill McDermott (Co-CEO)
ProductsSee list of SAP products.
RevenueIncrease 16.22 billion (2012)[1]
Operating incomeDecrease €4.064 billion (2012)[1]
ProfitDecrease €2.826 billion (2012)[1]
Total assetsIncrease €26.87 billion (2012)[1]
Total equityIncrease €14.16 billion (2012)[1]
Employees64,598 (2012)[1]

SAP AG is a German multinational software corporation that makes enterprise software to manage business operations and customer relations. Headquartered in Walldorf, Baden-Württemberg, Germany, with regional offices around the world, SAP is the leader in the market of enterprise applications in terms of software and software-related service.[2]

The company's best-known software products are its enterprise resource planning application systems and management (SAP ERP), its enterprise data warehouse product – SAP Business Warehouse (SAP BW), SAP BusinessObjects software, and most recently, Sybase mobile products and in-memory computing appliance SAP HANA. SAP is one of the largest software companies in the world.



When Xerox decided to exit the computer industry, they asked IBM to migrate their business systems to IBM technology. As part of IBM's compensation for the migration, IBM was given the rights to the SDS/SAPE software, reportedly for a contract credit of $80,000.

Five IBM engineers from the AI department [3][4] (Dietmar Hopp, Klaus Tschira, Hans-Werner Hector, Hasso Plattner, and Claus Wellenreuther, all from Mannheim, Baden-Württemberg) were working in an enterprise-wide system based on this software, only to be told that it would be no longer necessary. Rather than abandon the project, they decided to leave IBM and start another company.[5]

In June 1972 they founded Systemanalyse und Programmentwicklung ("System Analysis and Program Development") as a private partnership under the German Civil Code.[5] The acronym was later changed to stand for Systeme, Anwendungen und Produkte in der Datenverarbeitung ("Systems, Applications and Products in Data Processing").

Their first client was the German branch of Imperial Chemical Industries[6] in Östringen, where they developed mainframe programs for payroll and accounting. Instead of storing the data on punch cards mechanically, as IBM did, they stored it locally. Therefore, they called their software a real-time system, since there was no need to process the punch cards overnight (for this reason their flagship product carried an R in its name until the late 1990s). This first version was also a standalone software, that could be offered to other interested parties.

Enterprise resource planning[edit]

In 1973, the first commercial product was launched. The SAP R/1, as it was called,[7] offered a common system for multiple tasks. This permitted the use of a centralized data storage, improving the maintenance of the data. From a technical point of view, therefore, a database was necessary.[8]

In 1976, SAP GmbH was founded, and moved its headquarters the following year to Walldorf. SAP AG became the company's official name after the 2005 annual general meeting. AG is short for Aktiengesellschaft (public limited company).

Three years later, in 1979, SAP launched SAP R/2, expanding the capabilities of the system to other areas, such as material management and production planning.[7]

In 1981, SAP brought a re-designed product to market. However, SAP R/2 did not improve until the period between 1985 and 1990. SAP developed and released several versions of R/3 in 1992 through 1995. By the mid-1990s, SAP followed the trend from mainframe computing to client/server architectures. The development of SAP’s internet strategy with redesigned the concept of business processes (integration via Internet).[5] SAP was awarded Industry Week’s Best Managed Companies in 1999.[9]

Corporate restructuring[edit]

In August 1988, SAP GmbH became SAP AG (a corporation by German law), and public trading started on 4 November 1988. Shares were listed on the Frankfurt and Stuttgart stock exchanges.[5] In 1995, SAP was included in the German stock index DAX and on 22 September 2003, SAP was included in the Dow Jones STOXX 50.[10]

In November 2010, SAP lost a US$1.3 billion intellectual property lawsuit—related to the actions of the SAP subsidiary TomorrowNow—to Oracle Corporation; the penalty was cited as the largest software piracy judgment in history.[11] SAP filed post-trial motions to lower the damage awarded to Oracle and stated it may also file an appeal.[12] On 9 September 2011, the verdict was overturned by Judge Phyllis J. Hamilton, who called the penalty "grossly excessive."[13]


In 2001 SAP acquired Israeli company TopTier Software (founded in 1997) for $400 million.[14] The founder of TopTier Software Shai Agassi joined SAP and eventually was given the responsibility for the company's overall technology strategy and execution.[15]

In 2008, SAP acquired Business Objects, a business intelligence company, and added its products to its portfolio. In 2010, SAP acquired Sybase in a major acquisition move. Sybase being the largest business software and service provider specializing in information management and mobile data use.

In December 2011, SAP AG agreed to buy SuccessFactors Inc. for $3.4 billion in cash or 52 percent more than the share closing price on 2 December 2011.[16]

In May 2012, SAP AG announced acquisition of the Sunnyvale, California-based supply chain network operator Ariba Inc. for an estimated $4.3 billion. SAP said it will offer $45 a share.[17]

In June 2013, SAP AG announced the acquisition of Hybris and completed the acquisition on 1 August 2013.[18]

Business and markets[edit]

SAP AG Headquarters, Walldorf.

SAP is the world's largest business software company and the third biggest independent software provider by revenue (as of 2007).[19] It operates in four geographic regions: EMEA (Europe, Middle East, Africa), America (United States and Canada), LAC (Latin America and Caribbean), and APJ (Asia Pacific and Japan), which represents Japan, Korea, Australia and New Zealand, India, Greater China, and Southeast Asian countries. In addition, SAP operates a network of 115 subsidiaries, and has R&D (Research & Development) facilities around the globe in Germany, India, US, Canada, France, Brazil, Turkey, China, Hungary, Israel, Ireland and Bulgaria.

SAP focuses on six industry sectors - process industries, discrete industries, consumer industries, service industries, financial services, and public services - and 25 industries.[20] It offers integrated product sets for large enterprises,[21] midsize companies and small businesses.[22]

Enterprise Service-Oriented Architecture[edit]

Service-oriented architecture has been incorporated into the SAP ERP (Enterprise Resource Planning) system and other products defined within the SAP Enterprise Services Architecture (Enterprise SOA).

Enterprise SOA[edit]

SAP Enterprise Service Oriented Architecture (or Enterprise SOA) has been defined by SAP AG as "an open architecture for adaptive business solutions" and "the blueprint for an architecture that enables innovation and standardization in a single environment".[23] Enterprise SOA is enabled by the SAP NetWeaver platform, and builds on the benefits of Web services. SAP has positioned Enterprise SOA to deliver the benefits offered by service-oriented architecture, including enabling both flexibility and business efficiency. SAP states that Enterprise SOA provides companies with a "cost-effective blueprint for composing innovative new applications by extending existing systems, while maintaining a level of flexibility that makes future process changes cost-effective".[24] SAP Solutions that currently use Enterprise SOA are mySAP CRM, mySAP ERP, and mySAP SRM.

E-SOA Authentication[edit]

SAP E-SOA supports different authentication methods like SAP Logon Ticket, Kerberos authentication, Security Assertion Markup Language (SAML) assertions, SSL and X.509 client certificates, apart from basic authentication (User ID and Password) to guarantee stronger authentication and Single Sign-On methods across SAP technologies.[25]


SAP's products focus on Enterprise Resource Planning (ERP). The company's main product is SAP ERP. The current version is SAP ERP 6.0 and is part of the SAP Business Suite. Its previous name was R/3. The "R" of SAP R/3 stood for realtime. The number 3 related to the 3-tier architecture: database, application server and client (SAPgui). R/2, which ran on a Mainframe architecture, was the predecessor of R/3. Before R/2 came System RF, later dubbed R/1.

SAP ERP is one of five enterprise applications in SAP's Business Suite. The other four applications are:

Other major product offerings include: the NetWeaver platform, Governance, Risk and Compliance (GRC) software, Duet (joint offering with Microsoft), Performance Management software and RFID. SAP offers service-oriented architecture capabilities (calling it Enterprise SOA) in the form of web services that are wrapped around its applications.

While its original products were typically used by Fortune 500 companies[citation needed], SAP now actively targets small and medium sized enterprises (SME) with its SAP Business One and SAP Business All-in-One.
On 19 September 2007 SAP announced a new product named SAP Business ByDesign. SAP Business ByDesign is a software as a service (SaaS) offering, and provides a fully integrated enterprise resource planning (ERP) software, On Demand. SAP Business ByDesign was previously known under the code name "A1S".[26] In October 2007, SAP AG announced the friendly takeover of Business Objects. This acquisition expanded SAP's Product Suite of Business Intelligence (BI) software and increased the customer installed base to 89,000.[27]

In February 2009 SAP AG, which invested in Coghead, purchased the start-up’s intellectual property. SAP will only be using the company’s technology as an internal resource and has no plans to offer Coghead’s products to its customers.[28]

In May 2010 SAP AG announced that it is buying the database software maker Sybase for US$ 5.8 billion in cash.[29] The deal closed at the end of July 2010. Sybase will continue to run as a separate, independent unit but will be leveraged across the other SAP areas.

As of July 2010 TechniData is a 100% subsidiary of SAP AG.[30]

In October 2010, SAP AG announced the release of SAP HANA 1.0 (High-performance Analytics Appliance), an in-memory appliance for Business Intelligence allowing real-time analytics.

SAP Enterprise Learning (environment) is an enhancement of the previous version of the learning management system, SAP Learning Solution 600. Apart from the features in SAP Learning Solution 600, SAP Enterprise Learning (environment) contains a virtual learning room feature powered by Adobe Connect.[31] SAP officials say there are over 100,600 SAP installations serving more than 41,200 companies in more than 25 industries in more than 120 countries.[32]

SAP Press has published a book on SAP Enterprise Learning.[33]

SAP Human Resources Management System is one of the largest modules in the SAP R/3 system which consists of many sub modules that assist with tasks of human resource management.


SAP partners include Global Services Partners with cross-industry multinational consulting capabilities,[34] Global Software Partners providing integrated products that complement SAP Business Suite solutions,[35] and Global Technology Partners providing user companies with a wide range of products to support SAP technology, including vendors of hardware, database, storage systems, networks, and mobile computing technology.[36]

Extensions partners: this is a small number of companies which provide functionality that complements SAP product capabilities. These enhancements fulfill high quality standards and are certified, sold and supported by SAP directly. These partner companies include Adobe, CA Technologies, Hewlett-Packard, IDS Scheer, OpenText, Redwood Software, Vistex Inc., Knoa Software, Nakisa Inc, ICON-SCM, Prometheus Group and SmartOps.[37][38]

SAP PartnerEdge[edit]

SAP products for small businesses and midsize companies are delivered through its global partner network. In 2008, SAP signed SAP Global Service partnership with HCL Technologies, a $6 b technology service provider, headquartered in India.[39] SAP PartnerEdge has also signed with ENFOS, Inc., a software as a service company, to develop their EcoHub Partner Sustainability Solution platform. The SAP PartnerEdge program, SAP's partner program, offers a set of business enablement resources and program benefits to help partners including value added resellers (VARs) and independent software vendors (ISVs) be profitable and successful in implementing, selling, marketing, developing and delivering SAP products to a broad range of customers.[40]


SAP Community Network (SCN) is a community of SAP customers, partners, employees, and influencers – typically in roles such as: developers, consultants, integrators, and business analysts – who gain and share knowledge about ABAP, Java, .NET, SOA, and other technologies, plus analytics and dashboards, business process best practices, cloud, mobile, big data, and a range of other topics via expert blogs, discussion forums, exclusive downloads and code samples, training materials, and a technical library.[41] SAP Community Network has more than 2.5 million members, representing a wide range of roles and lines-of-business, from countries and territories all over the world, in 24 industries.


Functional units of SAP are split across different organizational units for R&D needs, field activities and customer support. SAP Labs are mainly responsible for product development whereas the field organizations spread across each country are responsible for field activities such Sales, Marketing, Consulting etc. Head office located in SAP AG is responsible for overall management as well as core Engineering activities related to Product Development. SAP customer support, also called Active Global Support (AGS) is a global organization to provide support to SAP customers worldwide.

SAP Labs locations[edit]

SAP Labs Latin America
Werner Brandt, Stefan Wagner, Luis César Verdi and Gerhard Oswald celebrating the expansion of SAP Labs Latin America
SAP Labs Israel

SAP Labs is the research and development organization of the parent company.[42] SAP has its development organization spread across the globe. As of Jan 2011, but not all, labs locations host SAP Research groups.[43]

The labs are located in Germany, France, Ireland, Bulgaria and Hungary in Europe; Palo Alto, USA; Bangalore, Mumbai and Gurgaon, India; São Leopoldo, Brazil; Ra'anana and Karmiel, Israel; Montreal, Vancouver, and Waterloo Canada and Shanghai, China. SAP Labs India[44] is the largest development unit in terms of number of employees outside the SAP headquarters located in Walldorf, Germany.[45]

Each SAP Lab has prominent area of expertise and focus. SAP Labs in Sophia Antipolis, France for example specializes in development of Java based SAP software products. Whereas, SAP Labs in Palo Alto, California is famous for its focus on innovation and research.

SAP opened in June 2009 its new SAP Labs campus in Brazil, representing the first SAP Labs Center in Latin America and the eighth worldwide. The facility is located in São Leopoldo, in the state of Rio Grande do Sul and employs 520 people.[46] Of particular note are the building’s structure and interior, which are composed entirely of environmentally friendly materials. Since these materials were not available in Brazil, constructing the facility did not come cheap for SAP. The project was an effort not only to create a "green house" in Latin America, but also to design offices with a pleasant work atmosphere.

SAP Labs Latin America has just received Leadership in Energy and Environmental Design (LEED) Gold certification for the building.

User groups[edit]

User Groups are independent, not-for-profit organizations of SAP customer companies and partners within the SAP Ecosystem that provide education to their members, influence SAP product releases and direction, exchange best practices, and provide insight into the market needs. Examples of User Groups are the Americas' SAP Users' Group (ASUG),[47] the German speaking SAP User Group (DSAG),[48] the SAP Australian User Group (SAUG),[49] User Community of SAP Customers in the Indian Subcontinent [50] and the SAP UK & Ireland User Group.[51][52] Further SAP User Groups can be found at the List of SAP Users' Groups.

In 2007, the SAP User Group Executive Network (SUGEN) has been established to foster the information exchange and best practice sharing among SAP User Groups and to coordinate the collaboration with SAP for strategic topics.[53]

SAP also has a large collaboration with developers, partners, customers online via SAP Community Network.


SAP has two annual conferences: SAPPHIRE and SAP TechEd. SAPPHIRE is SAP's customer-facing event.[54][55] It is generally where SAP has announced major product changes and strategic direction. It is typically held annually in the spring, in both North America and Europe.

SAP TechEd is the more technical conference, aimed at SAP's ecosystem of consultants and software development partners.[56][57] SAP TechEd has been held since 1995, and it usually held in four locations around the world every year in the fall. Technical sessions and workshops are held during the conference, as well as Birds of a Feather sessions, and a developer's competition: DemoJam. An associated one-day Unconference event, Community Day, was initiated in 2006 for the SAP Developer Network (SDN), now referred to as SAP Community Network (SCN). In 2008 a Community Day program was added to address the Business Process Expert (BPX) community, which has begun to evolve into new events like InnoJAM, CodeJAM. SAP Inside Tracks are also a popular grassroots level un-conferences locally held in various global locations.

Competitive landscape[edit]

SAP competitors are primarily in the Enterprise Resource Planning Software industry. In this field, Oracle Corporation is SAP's major competitor. SAP also competes in the Customer Relationship Management, Marketing & Sales Software, Manufacturing, Warehousing & Industrial Software, and Supply Chain Management & Logistics Software sectors.[58]

Oracle Corporation filed a case against SAP for malpractice and unfair competition in the California courts on 22 March 2007. In Oracle Corporation v. SAP AG Oracle alleged that a Texas subsidiary, SAP TN (formerly TomorrowNow before purchase by SAP), which provided discount support for legacy Oracle product lines, used the accounts of former Oracle customers to systematically download patches and support documents from Oracle's website and appropriated them for SAP's use.[59][60] Later SAP admitted wrongdoing on smaller scale than Oracle claimed in the lawsuit. SAP has admitted to inappropriate downloads; however the company denies the theft of any intellectual property.[61]

SAP increased its annual profits by 370% since 2002.[62]

SAP announced in October 2007 that it would acquire Business Objects, a market leader in business intelligence software, for $6.8B.[63]

SAP provoked controversy and frustration among its users in 2008 by raising the cost of its maintenance contracts. The issue was the subject of intense discussion among user groups.[64]

The resulting pressure saw SAP and SUGEN (SAP User Group Executive Network) agree to a major benchmarking exercise to prove the value of the new support pricing policy to customers. In December 2009, SAP delayed its Enterprise Support price rises until agreement had been reached on the benchmarks and KPIs (Key Performance Indicators).[65]

In January 2010, SAP reversed its direction on Enterprise Support and reintroduced its standard support package for customers. The move to reinstate standard support – at 18 percent of annual license fees, "will enable all customers to choose the option that best meets their requirements," the company said.[66]

In August 2013, SAP acquired Hybris publicly for eCommerce capabilities after failing in a bid for Neolane. The rationale for the acquisition of Hybris was really for product catalog and product information management [67]

SAP Endorsed Business Solutions (EBS)[edit]

One of SAP's highest partnership levels leads to a product being designated an "Endorsed Business Solution" (EBS) and it is an invitation-only arrangement. As of December 2013, only 44 SAP EBS providers exist globally[citation needed]:

Aris Global[69]
BlackLine Systems[70]
CA Technologies
Conformia Development
Emergys Software
Epic Data
FRS Global
Invensys Wonderware
Financial Management Consulting
KSS Fuels
NRX Global
Open Text
Oracle Corporation
OR Soft Jänicke GmbH
Oversight Systems
RIB Software
StreamServe (Open Text)
Skipper Electricals (India) Limited
TechniData cFP
Triple Point Technology
Verint Systems
Vision Chain
Werum Software Systems


In 2012, SAP is listed as a partner of the (RED) campaign, together with other brands such as Nike Inc., Girl, American Express and Converse. The campaign's mission is to prevent the transmission of the HIV virus from mother to child by 2015 (the campaign's byline is "Fighting for an AIDS Free Generation").[71]

SAP is funding a project[72] to assess and educate Autistic Children.[73] It has also launched an initiative to hire employees with autism and Asperger syndrome, citing their intelligence in the IT field and attention to detail; they aim to compose 1% of its 65,000 workforce with autistic people by the year 2020.[74]

See also[edit]


  1. ^ a b c d e f "Annual Report 2012, Financial Highlights". SAP AG. Retrieved 30 January 2011. 
  2. ^ SAP to Expand Customer-Centric Regional Events and Visibility in 2013 Instead of Holding SAPPHIRE NOW from Madrid in 2013 | PR Carbon PR Carbon Worldwide News Network and PR Distribution
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  37. ^ Solution Extensions Software from. SAP. Retrieved on 24 April 2011.
  38. ^ "LinguaNext – San Jose, CA – Internet/Software". Facebook. Retrieved 2012-11-06. 
  39. ^ SAP – HCL Technologies Announces Global Services Partnership With SAP to Deliver Joint Business Value Through ‘Customer Centric Ecosystem’. Retrieved on 7 July 2011.
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  44. ^ SAP India – SAP Labs | Emerging Solutions from SAP's Research and Development Centre. Retrieved on 24 April 2011.
  45. ^ SAP Global – SAP Labs: Key To SAP's Success. Retrieved on 24 April 2011.
  46. ^ SAP Newsroom. Retrieved on 2013-07-26.
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  67. ^ [1]. August 7, 2013. InformationWeek - Douglas Henschen .com
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External links[edit]