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SAP SE

Type	Societas Europaea
Traded as	FWB: SAP NYSE: SAP DAX Component
Industry	Enterprise software
Founded	Weinheim, Germany (1972; 46 years ago (1972))
Founder	Dietmar Hopp Hans-Werner Hector Hasso Plattner Klaus Tschira Claus Wellenreuther
Headquarters	Walldorf, Germany
Area served	Worldwide
Key people	Hasso Plattner (Chairman) Bill McDermott (CEO)
Products	See list of SAP products
Revenue	€23.46 billion (2017)[1]
Operating income	€4.88 billion (2017)[1]
Net income	€4.02 billion (2017)[1]
Total assets	€42.5 billion (2017)[1]
Total equity	€25.54 billion (2017)[1]
Number of employees	88,543 (2017)[1]
Website	www.sap.com

SAP SE (/ɛseɪˈpi/; Systeme, Anwendungen und Produkte in der Datenverarbeitung, "Systems, Applications & Products in Data Processing") is a German-based European multinational software corporation that makes enterprise software to manage business operations and customer relations.^[2] SAP is headquartered in Walldorf, Baden-Württemberg, Germany with regional offices in 180 countries.^[3][4] The company has over 335,000 customers in over 180 countries.^[4] The company is a component of the Euro Stoxx 50 stock market index.^[5]

History

Formation

Xerox aimed to exit to the computer industry in 1975,^[6] 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^[7][8] (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 no longer be necessary. Rather than abandoning the project, they decided to leave IBM Tech and start another company.^[9]

In June 1972, they founded the Systemanalyse und Programmentwicklung ("System Analysis and Program Development" / "SAPD") company, as a private partnership under the German Civil Code.^[9]

Their first client was the German branch of Imperial Chemical Industries in Östringen,^[10] 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 which using 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.^[11]

Enterprise Resource Planning

In 1973, the first commercial product was launched. It was called SAP R/98,^[12] and 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.^[13]

In 1976, SAP GmbH was founded, and moved its headquarters 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).^[9] As a result, R/3 was replaced with the introduction of SAP ERP Central Component (ECC) 5.0 in 2004.^[14] 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.^[15]

Corporate restructuring

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.^[9] In 1995, SAP was included in the German stock index DAX and, on 22 September 2003, SAP was included in the STOXX Europe 50.^[16]

The company's official name became SAP AG (a public limited company) after the 2005 annual general meeting. In 2014, SAP changed from an AG to a European Company (Societas Europaea or SE).^[17]

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.^[18] 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.^[19] 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.^[20]

In 2014, IBM and SAP began a partnership to sell cloud-based services.^[21] Likewise, in 2015, SAP also partnered with HPE to provide secure hybrid cloud-based services running the SAP platform.^[22] 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.^[23]

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.^[24]

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.^[25] 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."^[25]

SAP S/4HANA

In 2015, the company launched SAP 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.^[26]

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.^[27]

Acquisitions

Business and markets

As of 2016^[update], SAP is the world's third largest software and programming company.^[35] The corporation operates in Europe, Asia, Africa, the Middle East, North America, and South America.^[36]

SAP focuses on 25 industries and six industry sectors: process industries, discrete industries, consumer industries, service industries, financial services and public services.^[37] It offers integrated product sets for large enterprises,^[38] mid-sized companies and small businesses.^[39]

Enterprise service-oriented architecture

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

SAP Enterprise Service Oriented Architecture (or Enterprise SOA) is SAP SE's service-oriented architecture implementation.^[40] 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 as a cost-effective way of adding new applications to existing infrastructure.^[41] SAP Solutions that currently use Enterprise SOA are mySAP CRM, mySAP ERP, and mySAP SRM.

Partnerships

SAP partners include Global Services Partners with cross-industry multinational consulting capabilities,^[42] Global Software Partners providing integrated products that complement SAP Business Suite solutions,^[43] 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.^[44]

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,^[45]Hewlett-Packard, IDS Scheer, Mendix,^[46]OpenText,^[47]Knoa Software, and BackOffice Associates.^[48]

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.^[49]

SAP PartnerEdge

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.^[50]

Communities

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.^[51]

Organization

SAP uses a two-tier structure of boards, with an executive board and a supervisory board. As of 2016, members of the executive board were Bill McDermott (CEO and Chairman, joined in 2008), Robert Enslin (2014) Bernd Leukert (2014), Luka Mucic (CFO, 2014), Michael Kleinemeier (2015), Stefan Ries (2016), Steve Singh (2016) and Gerhard Oswald (1996).^[52]

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 and consulting. 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).^[53]

SAP Labs

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.

SAP Labs are located in Germany (main locations: Walldorf/Rot, Markdorf, Berlin), United States (main location: Silicon Valley), India (main location: Bangalore), China (main location: Shanghai), Brazil (main location: Sao Leopoldo), Bulgaria (main location: Sofia), Canada (main locations: Vancouver, Montreal), Vietnam (main location: Ho Chi Minh City), Israel (main location: Ra'anana), CIS (main location: Moscow), France (main location: Paris, Sophia Antipolis), Ireland (main location: Dublin), Hungary (main location: Budapest), Slovakia (main location: Bratislava), Czech Republic (main location: Brno), Poland (main location: Gliwice).

The four most prominent labs of SAP SE are located in Germany, India, China 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 labs in India are now the largest labs 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.^[54]

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.^[55]

SAP Cloud Platform

SAP Cloud Platform is SAP's platform-as-a-service (PaaS)^[56] that is used to deliver in-memory capabilities and microservices for building and extending, mobile-enabled cloud applications. The infrastructure is offered through a global network of SAP managed data centers. SAP Cloud Platform is an open platform-as-a-service, which includes the in-memory SAP HANA database management system, connects to both on premises and cloud-based systems running SAP or other third-party software and relies on open standards, like Java, JavaScript, Node.js and Cloud Foundry for integration options.

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 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.

SAP Store

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. Applications are available for free, as well as via yearly or monthly subscription models. 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.

Conferences

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.^[57][58]
  


• SAP TechEd is the company's more technical conference, aimed at SAP's ecosystem of consultants and software development partners.^[59][60] SAP TechEd has been held annually since 1995.

Competitive landscape

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.^[61]

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.^[62] The verdict was overturned in 2011,^[63] and the lawsuit was finally settled in 2014 for $356.7 million.^[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 German software company Hybris for eCommerce capabilities.^[67][68]

Philanthropic efforts

SAP has donated several millions of dollars to a variety of global health causes including the Product Red campaign and the Global Fund.^[69][70] In addition, SAP has distributed free software in South Africa as part of an effort towards developing future markets there.^[71] 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.^[72]

Autism hiring

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.^[73]

Bribery and corruption

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.^[74][75]

The Guptas' dealings with SAP were revealed in a widely publicised e-mail leak.^[76][77]

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.^[78] Claas Kuehnemann was named as acting managing director for Africa while the investigation continued.^[79]

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.^[80][81][82]

Panamanian bribery

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.^[83]

See also

• List of ERP software packages


• List of SAP products


• 
  SAP Center, an indoor arena in San Jose, California that bears the company's name via a sponsorship contract


• SAP Fiori


• SAP implementation


• SAP ERP

References

External links

Wikimedia Commons has media related to SAP.

• 
  Official website
  


• 
  
  • Business data for SAP SE:
  
  
  • Reuters
  
  
  • SEC filings