“Market Cap $97.12 B As of May 2014
At a Glance
- Industry: Software & Programming
- Founded: 1972
- Country: Germany
- CEO: Bill Mcdermott
- Website: www.sap.com
- Employees: 66,572
- Sales: $22.32 B
- Headquarters: Walldorf
#207 Global 2000
- #416 in Sales
- #137 in Profit
- #634 in Assets
- #72 in Market value
#21 World’s Most Valuable Brands
#72 Innovative Companies (#77 in 2012)
SAP AG is engaged in marketing and distribution of products, solutions, and services. It operates through the On-Premise and Cloud segments. The On-Premise segment comprises of on-premise products and on-premise services divisions. The on-premise products division is involved in marketing and licensing of on-premise and mobile software products, as well as providing support services for the software products. The on-premise services division provides implementation and educational services on the use of software products. The Cloud segment comprises of cloud applications and Ariba divisions. The cloud applications division includes marketing and selling of subscriptions to cloud software offerings developed by SAP and SuccessFactors. The Ariba division markets and sells cloud software offerings developed by Ariba. The company was founded by Dietmar Hopp and Hasso Plattner in 1972 and is headquartered in Walldorf, Germany.“
When Xerox decided to exit the computer industry in 1975, 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 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 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 Tech and start another company.
In June 1972 they founded Systemanalyse und Programmentwicklung (“System Analysis and Program Development“) company, as a private partnership under the German Civil Code. 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 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
In 1973, the first commercial product was launched. It was called SAP R/98, 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.
In 1976, SAP GmbH was founded, and moved its headquarters the following year to Walldorf, Germany. The company’s official name became SAP AG after the 2005 annual general meeting. AG is short for Aktiengesellschaft, a (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. 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). SAP was awarded Industry Week’s Best Managed Companies in 1999.
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. 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.
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. SAP filed post-trial motions to lower the damage awarded to Oracle and stated it may also file an appeal. On 9 September 2011, the verdict was overturned by Judge Phyllis J. Hamilton, who called the penalty “grossly excessive.”
*Information from Forbes.com and Wikipedia.org
**Video published on YouTube by “SAP TV“