SAP (//)is a German multinational software corporation that makes enterprise software to manage business operations and customer relations. The company is especially known for its ERP software.
Since May 2015, the company has dealt with a series of high-profile bribery investigations, including one that led to them paying $3.9 million to settle U.S. Securities and Exchange Commission civil charges over a former executive’s scheme to bribe Panama government officials in order to win lucrative technology contracts.
- 1 Company Overview
- 2 History
- 3 Finances
- 4 Acquisitions
- 5 Business and markets
- 6 Enterprise service-oriented architecture
- 7 Partnerships
- 8 SAP PartnerEdge
- 9 SAP for Retailing
- 10 Communities
- 11 Organization
- 12 SAP Labs
- 13 SAP User Groups
- 14 SAP Cloud Platform
- 15 SAP S/4HANA
- 16 SAP Enterprise Learning
- 17 SAP Store
- 18 SAP App Center
- 19 Conferences
- 20 Competitive landscape
- 21 Philanthropic efforts
- 22 Sponsorships
- 23 Autism hiring
- 24 Bribery and corruption
- 25 See also
Founded in 1972 as a private partnership named Systemanalyse und Programmentwicklung (lit. ‘System Analysis and Software Development’; SAP GbR), which in 1981 fully became Systeme, Anwendungen und Produkte in der Datenverarbeitung (SAP GmbH) after a five-year transition period beginning in 1976.:1972–1980 In 2005 it further restructured itself as SAP AG. Since 7 July 2014, its corporate structure is that of a pan-European societas Europaea (SE); as such, its former German corporate identity is now a subsidiary, SAP Deutschland SE & Co. KG.
SAP is headquartered in Walldorf, Baden-Württemberg, Germany with regional offices in 180 countries. The company has over 425,000 customers in over 180 countries and is a component of the Euro Stoxx 50 stock market index. A 2001 article said it was “the third-biggest software company in the world.”
When Xerox exited the computer hardware manufacturing industry in 1971, it asked IBM to migrate its business systems to IBM technology. As part of IBM’s compensation for the migration, IBM was given the rights to the Scientific Data Systems (SDS)/SAPE software, reportedly for a contract credit of $80,000.
Five IBM engineers from the AI department (Dietmar Hopp, Klaus Tschira, Hans-Werner Hector, Hasso Plattner, and Claus Wellenreuther, all from Mannheim, Baden-Württemberg) were working on an enterprise-wide system based on this software, only to be told that it would no longer be necessary. Rather than abandoning the project, they decided to leave IBM Tech and start another company.
In June 1972, they founded the SAP Systemanalyse und Programmentwicklung (“System Analysis and Program Development” / “SAPD”) company, as a private partnership under the German Civil Code.
Their first client was the German branch of Imperial Chemical Industries 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 in the Electronic System while using a common Logical database for all activities of Organization.[clarification needed] 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
In 1973, the first commercial product was launched. SAP completes its first financial accounting system – RF. This system serves as the cornerstone in the ongoing development of other software modules of the system that will eventually bear the name SAP R/1.
This offered a common system for multiple tasks. This permitted the use of a centralized data storage, improving the maintenance of data. From a technical point of view, therefore, a database was necessary.
In 1976, SAP GmbH Systeme, Anwendungen und Produkte in der Datenverarbeitung (“Systems, Applications, and Products in Data Processing”) was founded as a sales and support subsidiary. Five years later, the private partnership was dissolved and its rights were passed on to SAP GmbH.
The headquarters moved the following year to Walldorf, Germany. 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. 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 released the new SAP R/3 in 1992. SAP developed and released several versions of R/3 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 mySAP.com redesigned the concept of business processes (integration via Internet). As a result, R/3 was replaced with the introduction of SAP ERP Central Component (ECC) 5.0 in 2004. Architectural changes were also made to support an enterprise service architecture to transition customers to a services-oriented architecture. The latest version, SAP ERP 6.0, was released in 2006. SAP ERP 6.0 has since then been updated through SAP enhancement packs, the most recent: SAP enhancement package 8 for SAP ERP 6.0 in 2016.
In August 1988, SAP GmbH became SAP AG, and public trading started on 4 November 1988. Shares were listed on the Frankfurt and Stuttgart stock exchanges. In 1995, SAP was included in the German stock index DAX and, on 22 September 2003, SAP was included in the STOXX Europe 50.
SAP AG era
On 21 May 2014, SAP AG announced during the Annual General Meeting of Shareholders held on the same day, 99% of the shareholder votes approved the conversion of legal form to a European stock corporation (Societas Europaea, SE) and at the same time, elected the first Supervisory Board of SAP SE. The conversion of the company’s legal form would take place upon entry in the commercial register, expected to be in July 2014.
SAP SE era
On 7 July 2014, SAP announced it had changed its legal form to a European Company (Societas Europaea, SE). As a result, its German subsidiary was renamed to SAP Deutschland SE & Co. KG. The conversion cost the company approximately €4 million.
Focus on cloud
Since 2012, SAP has acquired several companies that sell cloud-based products, with several multibillion-dollar acquisitions seen by analysts as an attempt to challenge competitor Oracle. In 2014 SAP bought Concur Technologies, a provider of cloud-based travel and expense management software, for $8.3 billion, SAP’s most expensive purchase to that date. Analysts’ reactions to the purchase were mixed, with Thomas Becker of Commerzbank questioning whether Concur was the right choice for SAP, while Credit Suisse called the acquisition an “aggressive” move.
In 2014, IBM and SAP began a partnership to sell cloud-based services. Likewise, in 2015, SAP also partnered with HPE to provide secure hybrid cloud-based services running the SAP platform. Both HPE and IBM provide infrastructure services to SAP, and SAP runs its SAP HANA cloud solution on top. SAP has announced additional partnerships with Microsoft in order to give customers tools for data visualization, as well as improved mobile applications.
SAP exceeded its revenue projections due to the expansion in its cloud business and the success of SAP HANA. The growth can also be partially attributed to the acquisitions of Concur and Fieldglass.
The company announced plans in 2016 to invest heavily into technology relating to Internet of Things (IoT) as part of a strategy to capitalize on the growth in that market. For that purpose, €2 billion is planned for investment in relevant sectors by the end of 2020. SAP will also launch a new product line called SAP IoT, which “will combine large amounts of data from things connected to the Internet with machine learning and SAP’s real-time database S/4 HANA.”
On 29 January 2019, SAP announced plans to cut approximately 4,000 positions at the company in a strategic plan to shift to more modern cloud-based technologies such as blockchain, quantum computing, machine learning, Internet of Things, and artificial intelligence.
For the fiscal year 2017, SAP reported earnings of €4 billion, with an annual revenue of €23.5 billion, an increase of 6.3% over the previous fiscal cycle. SAP’s shares traded at over US$105 per share, and its market capitalization was valued at US$128 billion in December 2018. This makes SAP the most valuable company in Germany.
in bn. EUR€
in bn. EUR€
in bn. EUR€
|Acquisition number||Acquired company||Acquisition date||Specialty||Country of origin||Acquisition costs|
|70||Qualtrics||Nov 2018||Collect, Manage, act on Experience data||USA||$8.0b|
|69||Contextor||Nov 2018||Robotics Process Automation||France|
|68||Coresystems||Jun 2018||platform for field service management||Switzerland|
|67||CallidusCloud||Jan 2018||Sales Performance Management Tool||USA||$2.24 b|
|66||Recast.ai||Jan 2018||Conversational User Experience Technology||France|
|65||Gigya||Sep 2017||Customer Identity Management||Israel||$350m|
|64||Abakus||Dec 2016||Marketing attribution||USA|
|62||Altiscale||Aug 2016||big data and Hadoop Hosting||USA||$125m+|
|61||Fedem Technology||Jun 2016||IoT||Norway|
|60||MeLLmo Inc. (Roambi)||Feb 2016||Mobile Business Intelligence||USA|
|59||Concur Technologies||Sep 2014||Travel and Expense Management||USA||$8.3b|
|58||SeeWhy||May 2014||Behavioural target marketing||USA||$1.1b|
|57||Fieldglass||Mar 2014||Contingent labour and services||USA|
|56||KXEN||Oct 2013||Predictive analytics||France|
|55||hybris||May 2013||E-Commerce Solutions||Switzerland||$1.5b|
|54||Camilion||Mar 2013||Insurance solutions||Canada|
|53||SmartOps||Feb 2013||Inventory optimization||USA|
|52||Ticket-Web||Feb 2013||Ticket systems and special CRM solutions for sports and entertainment||Germany|
|51||Ariba||Oct 2012||Supplier network||USA||$4.3b|
|50||Syclo||Jun 2012||Mobile asset management||USA|
|49||datango||Jan 2012||Electronic performance support technologies||Germany|
|48||SuccessFactors||Dec 2011||Human Capital Management (see SuccessFactors acquisitions on https://en.wikipedia.org/wiki/SuccessFactors#Acquisitions)||USA||$3.4b|
|47||Right Hemisphere||Sep 2011||3D visualization||USA|
|46||Crossgate||Sep 2011||B2B eCommerce||Germany|
|45||Secude||Mar 2011||Security software (Not the whole company, only some assets were acquired)||Germany|
|44||Cundus||Dec 2010||Disclosure Management||Germany|
|43||Sybase||May 2010||Database, middleware, mobile software||USA||$5.8b|
|42||TechniData||May 2010||Environmental, Health and Safety||Germany|
|41||SAF||Sep 2009||Inventory Management||Switzerland||$91m|
|40||Highdeal||May 2009||High-volume billing||France|
|39||Visiprise||Jul 2008||Manufacturing Execution||USA|
|38||Saicon INC||Oct 2014||US Recruitment||India|
|37||BusinessObjects||Oct 2007||Business Intelligence||France||$6.78b|
|36||Yasu Technologies Pvt. Ltd.||Oct 2007||Business Rules Management Software||India|
|35||Wicom Communications||May 2007||Internet Communication software||Finland|
|34||MaXware||May 2007||Identity software||Norway|
|33||Outlooksoft||May 2007||Planning & consolidation||USA|
|32||Pilot Software||Feb 2007||Strategy Management software||USA||~$200m|
|31||Factory Logic||Dec 2006||Lean scheduling and supply synchronisation||USA|
|30||Praxis Software Solutions||Jul 2006||Web-based CRM and eCommerce||USA|
|29||Frictionless Commerce||May 2006||SRM software||USA|
|28||Virsa Systems||Apr 2006||Compliance solutions||USA|
|27||SAP Systems Integration||Dec 2005||Consulting services||Germany|
|26||Callixa||Nov 2005||Enterprise Integration Information software||USA|
|25||Khimetrics||Nov 2005||retail software||USA|
|24||Triversity||Sep 2005||POS software||Canada|
|23||Lighthammer||Jun 2005||Manufacturing Intelligence and Collaborative Manufacturing||USA|
|22||DCS Quantum||Feb 2005||Automotive Dealer Management||United Kingdom|
|21||TomorrowNow||Jan 2005||Grey market support||USA|
|20||ilytix||Jan 2005||SAP BusinessOne Business Intelligence||Norway|
|19||A2i||Jul 2004||Master Data Management||USA|
|18||SPM Technologies||Dec 2003||IT architecture consulting||Germany|
|17||DCW Software||Jul 2003||OS/400 Applications||Germany|
|16||Guimachine||Dec 2002||NetWeaver Visual Composer toolkit||USA|
|15||IMHC||May 2001||Integrated managed health care from IDS||USA|
|14||Expression||May 2002||real-time file sharing||?|
|13||Topmanage||Feb 2002||SAP BusinessOne Suite||Israel|
|12||Paynet International AG||Dec 2001||Invoice Processing||Germany|
|11||COPA GmbH||Nov 2001||Beverage industry consulting||Germany|
|10||Infinite Data Structures||May 2001||Trade Management / CRM||USA|
|9||Toptier||Mar 2001||Enterprise Information Portal and Integration Infrastructure||USA||~$400m|
|8||Prescient Consulting||Feb 2000||Consulting services||USA|
|7||In-Q-My Technologies GmbH||2000||J2EE Server||Bulgaria|
|6||Campbell Software||1999||Workforce Management||USA|
|5||AMC Development||1998||Call Center telephony integration software||USA|
|4||OFEK-Tech||1998||Warehousing and distribution centre software||Israel|
|3||Kiefer & Veittinger||1997||Sales force Applications||Germany|
|1||Steeb||1991||Software and Consulting Services||Germany|
Business and markets
SAP focuses on 25 industries and six industry sectors: process industries, discrete industries, consumer industries, service industries, financial services and public services. It offers integrated product sets for large enterprises, mid-sized companies and small businesses.
Enterprise service-oriented architecture
SAP Enterprise Service Oriented Architecture (or Enterprise SOA) is SAP SE’s service-oriented architecture implementation. 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 markets Enterprise SOA (service-oriented architecture) as a cost-effective way of adding new applications to existing infrastructure. SAP Solutions that currently use Enterprise SOA are mySAP CRM, mySAP ERP, and mySAP SRM.
SAP partners include Global Services Partners with cross-industry multinational consulting capabilities, Global Software Partners providing integrated products that complement SAP Business Suite solutions, 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.
Extensions partners are companies which provide functionality that complements SAP product capabilities. Their products are certified, sold, and supported by SAP. These partner companies include Adobe, CA Technologies, GK Software,Tricentis,Hewlett-Packard, IDS Scheer, Mendix,OpenText,Knoa Software, and BackOffice Associates.
SAP has also partnered with Apple to work on the mobile experience for SAP enterprise customers. As part of the partnership, a new SAP HANA Cloud Platform SDK would be delivered exclusively for iOS. As a result, developers can build applications based on the SAP HANA Cloud Platform for the iPhone and iPad devices. The partnership was announced in May 2016.
SAP products for small businesses and midsize companies are delivered through its global partner network. The SAP PartnerEdge programme, SAP’s partner programme, 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.
SAP for Retailing
SAP for Retailing is a comprehensive set of offerings for various retail processes including demand management/forecasting and supply chain at a high level, and specific areas such as contracting, purchasing, goods receipts, invoice verification, accounts payable, pricing, billing, Point-of-Sale and business analytics.
“SAP for Retail” is the title of a book about the software.
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 blogs, discussion forums, downloads and code samples, training materials, and a technical library.
SAP uses a two-tier structure of boards, with an executive board and a supervisory board. In October 2019, Jennifer Morgan and Christian Klein were appointed as co-CEOs of SAP. In April 2020, it was announced that Jennifer Morgan will leave SAP and Christian Klein will continue to operate as the sole CEO, citing that the current environment of the Coronavirus recession requires “companies to take swift, determined action which is best supported by a very clear leadership structure”.
Headquarters is responsible for overall management as well as core engineering activities related to product development. Worldwide customer support is not provided by the field organizations but by a unified organization called Active Global Support (AGS).
SAP Labs are R&D locations that develop and improve SAP core products. SAP Labs are strategically located in high-tech clusters around the globe.
The four most prominent labs of SAP SE are located in Germany, Japan, Israel and the US. Labs Walldorf was founded in 1972 and became SAP’s primary location. At the beginning, the focus of SAP’s expansion was entering highly developed IT markets; in 1993 Palo Alto became a part of SAP Labs. Aiming to acquire talented employees, SAP opened another lab in Bangalore in 2003.
Among the latest SAP Labs are labs in Czech Republic, Slovakia and Poland. All three labs have been established in 2016. The lab in India as of 2016 is SAP’s largest outside Germany.
In order to manage SAP Labs, SAP Labs Network (SLN) was created. SLN is a global unit that manages regional Labs and shares best business practices. It coordinates and distributes development projects among individual SAP Labs locations, accelerates product delivery, gives SAP full access to talent, and drives SAP corporate strategy regarding innovation and business growth.
SAP User Groups
SAP User Groups are independent, nonprofit organizations of SAP customers and SAP partners. They serve as communications channel for their members towards SAP and for SAP towards the markets. The Americas’ SAP Users’ Group (ASUG) is the company’s largest user group, with 100,000 individuals at 3,800 companies. ASUG members are professionals who work in more than 17 industries. Many are technical and business process experts in the SAP ecosystem; they have varied levels of experience, and come from small businesses to global corporations, as well as universities. In 2007, the SAP User Group Executive Network (SUGEN) was established.
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.
SAP Cloud Platform
SAP Cloud Platform is promoted to build and extend business applications with rapid innovation cycles. SAP and Apple Inc. partnered to develop mobile applications on iOS using cloud-based software development kits (SDKs) for the SAP Cloud Platform. SAP founding development partners for their Cloud Platform include Accenture, Celonis, EnterpriseAlumni, and Walmart.
SAP Cloud Platform is based on open source technology, developed & supported in partnership with SUSE. The company is also in partnership with Cloud Foundry for a beta offering of SAP Cloud Platform that enables customers to test out and give feedback for the functionalities coming with Cloud Foundry.
In 2015, the company launched S/4HANA, the newest generation of the SAP Business Suite. It was written natively for the SAP HANA platform. It offers cloud, on-premises and hybrid deployment options to customers, with its benefits including a smaller data footprint, higher throughput, faster analytics and faster access to data. It also allows existing SAP Business Suite customers to upgrade to this product from SAP Business Suite.
In 2016, SAP introduced SAP HANA, Express Edition which is meant to run on personal computers or on cloud computing platforms for students and other small-scale developers.
SAP Enterprise Learning
“The SAP Enterprise Learning solution is part of SAP ERP HCM” is a quote from a 2009-published book about the subject. The acronym ERP refers to Enterprise Resource Management; HCM refers to Human Capital Management.
There are other books on SAP ERP HCM including:
SAP Enterprise Learning is a learning management system, for large and medium-sized enterprises, from SAP, and it contains a virtual learning room feature powered by Adobe Connect. A sample can be experienced in the SAP Learning on Demand Portal. SAP uses this for delivering online training as a Learning on Demand offering; some of this content is freely available as e-books or simulations. The company has a book on this subject, available since June 2009.
SAP launched the SAP store in March 2015 as its principal e-commerce property to allow customers to buy its products directly on the Web rather than through traditional sales channels. Customers can purchase free trials or starter editions and can pay by credit card or PayPal.
SAP App Center
Launched in 2016, the SAP App Center is an online application marketplace for third-party applications that integrate with and extend SAP products. While some applications are available for free, others involve a monthly or yearly subscription fee. Applications available range from integrations with content management software to mobile approval management and payment platforms. As of July 2018, it features over 1,500 applications. Major vendors and service providers, such as Accenture, are part of it.
SAP has two annual conferences:
- SAPPHIRE is SAP’s customer-facing event, where it generally announces major product changes and strategic direction. It is typically held in the spring in North America.
- SAP TechEd is the company’s more technical conference, aimed at SAP’s ecosystem of consultants and software development partners. SAP TechEd has been held annually since 1995.
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.
Oracle Corporation filed a lawsuit against SAP for malpractice and unfair competition in the California courts in 2007. SAP lost the case in 2010 and was ordered to pay $1.3 billion, which was cited as the largest copyright infringement judgment in history. The verdict was overturned in 2011, and the lawsuit was finally settled in 2014 for $356.7 million.
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).
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.
SAP has donated several millions of dollars to a variety of global health causes including the Product Red campaign and the Global Fund. In addition, SAP has distributed free software in South Africa as part of an effort towards developing future markets there. The company also encourages employees to volunteer through social sabbaticals, sending teams of people to different countries to aid non-profits. SAP employees have volunteered in China, India, Brazil, and South Africa.
The SAP Arena opened in Mannheim in 2005, and is the home of the Adler Mannheim ice hockey team and Rhein-Neckar Löwen handball team. Since 2013, the company is name sponsor of the SAP Center at San Jose, California. The team also sponsors the Formula One racing team McLaren, the Formula E team Mercedes Benz EQ, German football team TSG 1899 Hoffenheim, NFL teams the New York Giants and New York Jets, the City Football Group, and eSports squad Team Liquid. It was the title sponsor of the Formula One United States Grand Prix from 2000 to 2002.
SAP also engages in outreach activities within its company. In 2013, the company launched an initiative to hire employees with autism and Asperger syndrome, citing their undervalued ability to contribute to its workforce. SAP aims to compose 1% of its workforce with individuals with autism by the year 2020.
Bribery and corruption
East African allegations
In February 2019, SAP was accused of ‘improper conduct’ linked to state contracts in Kenya and Tanzania. An anonymous whistle-blower claims, through a firm of attorneys, that SAP used Twenty Third Century Systems (TTCS) to bribe officials at the Tanzania Ports Authority (TPA) to win a US$6.6-million enterprise resource planning software tender that involved the provision of software licenses and services.
South African allegations
In July 2017, allegations were made that SAP had been involved in business transactions with the controversial and politically influential Gupta family in South Africa. SAP was accused of paying CAD House, a Gupta-controlled company, R100 million in order to secure a Transnet deal. SAP denied the allegations, claiming that the money was paid as “an extension of the sales force”, despite CAD House having no prior SAP experience.
As a consequence of the allegations, SAP launched an investigation that led to four of its South African managers being placed on administrative leave along with the seizure of their mobile phones and computers. Claas Kuehnemann was named as acting managing director for Africa while the investigation continued.
On 26 October 2017, SAP announced that it had voluntarily reported itself to the U.S. Securities and Exchange Commission for a possible violation of US law, including the Foreign Corrupt Practices Act, related to the South African bribery allegations. SAP’s own investigation, conducted by law firm Baker McKenzie, revealed that SAP had paid $7.7 million in commissions to third-parties linked to the Gupta family while securing contracts worth $48 million with Transnet and Eskom.
In May 2015, SAP agreed to pay $3.9 million to settle U.S. Securities and Exchange Commission civil charges over a former executive’s scheme to bribe Panama government officials in order to win lucrative technology contracts.