It was founded in 1972 as a private partnership namedSystemanalyse und Programmentwicklung (System Analysis Program Development). SAP GbR became in 1981 fullySysteme, Anwendungen und Produkte in der Datenverarbeitung (Systems, Applications and Products in Data Processing) abbreviated SAPGmbH after a five-year transition period beginning in 1976.[5] In 2005, it further restructured itself as SAPAG.[citation needed] Since 7 July 2014, its corporate structure is that of a pan-Europeansocietas Europaea (SE);[6][7][8][9] as such, its former German corporate identity is now a subsidiary, SAP Deutschland SE & Co. KG.[8] It has regional offices in 180 countries[10][11] and over 111,961 employees.[12]
WhenXerox exited the computer hardware manufacturing industry in 1971,[15] it askedIBM to migrate its business systems to IBM technology. As part of IBM's compensation for the migration, IBM was given the rights to theScientific Data Systems (SDS)/SAPE software repository.
Five IBM engineers from the AI department[16][17] (Dietmar Hopp,Klaus Tschira, Hans-Werner Hector,Hasso Plattner, andClaus Wellenreuther, all fromMannheim, 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.[3][18]
In June 1972 they founded the SAPSystemanalyse und Programmentwicklung ("System Analysis and Program Development" / "SAPD") company, as a private partnership under the German Civil Code.[19]
Their first client was the German branch ofImperial Chemical Industries inÖstringen,[20] where they developed mainframe programs for payroll and accounting. Instead of storing the data onpunch 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 areal-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.[21]
In 1973, SAP launched its first commercial product, the RFfinancial accounting system. This system served as the cornerstone in the ongoing development of other software modules of the system that eventually bore the name SAP R/1.[19]
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, adatabase was necessary.[22]
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.[19]The headquarters moved the following year toWalldorf, Germany.
In 1979, SAP launchedSAP R/2, expanding the capabilities of the system to other areas, such as materials management andproduction planning.
In 1981, SAP brought a re-designed product to market. However, SAP R/2 did not improve until between 1985 and 1990.
In 1992, SAP releasedSAP R/3. SAP developed and released several versions of R/3 through 1995.
In August 1988 SAP GmbH became SAPAG, and public trading started on 4 November 1988. Shares were listed on theFrankfurt andStuttgart stock exchanges.[18] In 1995, SAP was included in the German stock indexDAX and, on 22 September 2003, SAP was included in theSTOXX Europe 50.[23]
In the mid-1990s, SAP transitioned frommainframe computing to aclient–server architecture. In 1996 it began its alliance with the Spanish technology consulting firmSeidor, initiating the expansion of SAP solutions throughout Latin America.[24]
In 2004, R/3 was replaced withSAP ERP Central Component (ECC) 5.0.[25] Architectural changes were also made to transition customers to aservice-oriented architecture.
The company's official name becameSAPAG (a public limited company) after the 2005annual general meeting.
In 2006, SAP ERP 6.0 was released. SAP ERP 6.0 is the latest version has since been updated through SAP enhancement packs, the most recent being enhancement package 8 for SAP ERP 6.0 in 2016.[26]
Since 2012 SAP has acquired several companies that sellcloud-based products, with several multi-billion-dollar acquisitions seen by analysts as an attempt to challenge competitorOracle.[27] In 2016 SAP boughtConcur Technologies, a provider of cloud-based travel and expense management software, for $8.3 billion, SAP's most expensive purchase to that date.[28] Analysts' reactions to the purchase were mixed, with Thomas Becker ofCommerzbank questioning whether Concur was the right choice for SAP, while Credit Suisse called the acquisition an "aggressive" move.[29]
On 21 May 2014, SAP AG announced during the Annual General Meeting of Shareholders that 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 firstsupervisory 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.[30][31]
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.[8][32] The conversion cost the company approximately €4 million.[33]
In 2014 IBM and SAP began a partnership to sell cloud-based services.[34] Likewise, in 2015, SAP also partnered withHPE to provide secure hybrid cloud-based services running the SAP platform.[35] 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.[36]
Since May 2015, the company has dealt with a series of high-profilebribery investigations,[37][38][39] including one that led to them paying $3.9 million to settleU.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.[37][40]
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.[41] Since 2017, SAP is a founding member of theEU Cloud Code of Conduct.[42] Since May 2021 SAP has listed selected Cloud Service adherent to the EU Cloud Code of Conduct as one of the first Cloud Service Providers.[43]
In July 2017 allegations were made that SAP had been involved in business transactions with the controversial and politically influentialGupta family in South Africa. SAP was accused of paying CAD House, a Gupta-controlled company, R100 million in order to secure aTransnet 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.[38][44] The dealings of the Gupta family with SAP were revealed in a widely publicized e-mail leak.[45][46] 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.[47] Claas Kuehnemann was named as acting managing director for Africa while the investigation continued.[48] On 26 October 2017 SAP announced that it had voluntarily reported itself to theU.S. Securities and Exchange Commission (SEC) for a possible violation of US law, including theForeign Corrupt Practices Act (FCPA), related to the South African bribery allegations. SAP's own investigation, conducted by law firmBaker 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 andEskom.[49][50][51]
The company announced plans in 2016 to invest heavily into technology relating to theInternet 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.[52] 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."[52]
In 2018 and in an ongoing court battle,Teradata accused SAP ofIP theft andfraudulent behaviour.[53][54] In 2021, in the German weekly news magazineDer Spiegel, additional claims were made of questionable behaviour with regards to SAP's funding of researchers at the University of Mannheim - who were in effect paid by SAP to investigate competitors technology.[53][55] In a later article,Der Spiegel magazine maintained that SAP had been neglectful in maintaining strict governance for years.[56] In June 2022 the German business magazineManager Magazin published an article stating the management style of the leadership might be responsible for an increasedcompliance risk.[57]
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.[39]
In 2021 SAP admitted in a United States court that it exported software to firms in Iran, contrary toUS sanctions against Iran, which led to a fine of $8 million.[59][60][61]
On 13 April 2021 SAP announced the formation of the joint ventureSAP Fioneer, a dedicated Financial Services Industry (FSI) Unit between SAP and investment company Dediq GmbH.[62][63] Dediq GmbH invested over €500 million in the newly formed unit and received an 80 percent share in return.SAP brought its products, organizational units and the sales network into the business and holds 20 percent of the shares.[64]
In May 2022, multiple claims were made ofbullying andsexual harassment within the company, with many cases of unwanted advances by senior male managers on female colleagues.[65] When complaints were made or information made available, HR were found to be unhelpful or hostile. For example, in one case a female employee was groped by a male manager in Sydney while at a company event, but he was never brought to account. In another case, a female employee was sexually targeted by a manager and asked to keep her web camera on during the day. She then complained and was placed under "performance management" - a precursor to being asked to leave the company.[66] Several female executives, including the Co-CEO left the company, adding to concerns that women were negatively treated, despite SAP then hiring several other senior women from Microsoft.[67]
On September 3, 2024 it was announced that CTO and Executive Board Member Juergen Mueller reached a mutual agreement to leave the company by the end of the month due to incident of inappropriate behavior at a company event.[72][73] Following the news of this incident it was reported on September 13, 2024 that German prosecutors have opened a formal investigation of sexual harassment between him and the female employee.[74]
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.[76] SAP's shares traded at over US$154 per share, and its market capitalization was valued at US$180 billion in December 2023,[77] making it the largest German company bymarket capitalization.[14]
The key trends for SAP are (as at the financial year ending 31 March):[78][79][80]
SAP uses a two-tier structure of boards with anexecutive board and asupervisory board.[84][85] In October 2019Jennifer Morgan andChristian Klein were appointed as co-CEOs of SAP.[86] In April 2020 it was announced thatJennifer Morgan will leave SAP and Christian Klein will continue to operate as the sole CEO, citing that the current environment of theCOVID-19 recession requires "companies to take swift, determined action which is best supported by a very clear leadership structure".[87]
The majority of the company's employees are in Germany and United States. About 20,000 employees are based in Germany[88] and about 19,311 employees are based in the United States.[89][90]
45 employee representatives were elected in 2022 to the SAPSE Works Council, including 15 candidates from theVer.di andIG Metall trade union lists. They represent 17,000 employees of Germany.[91]
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).[92]
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.[93]
SAP Labs are research and development locations that develop and improve SAP core products. SAP Labs are strategically located in high-tech clusters around the globe.[94]
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.[94]
SAP Research is the globaltechnology research unit ofSAP SE with a network of 21 research locations worldwide.[95] Each center is located in close proximity to an SAP development center or on a university campus. The group significantly contributes to SAP's product portfolio and extends its leading position in the market by identifying and shaping emerging IT trends and generating breakthrough technologies through applied research. In contrast to SAP's product groups and development labs that work on new functions and releases, its researchers explore opportunities that have not yet been developed into products.
