Company Name: SAPCompany Facts (2011): Headquarters: Walldorf, Germany Annual Sales: 14.3 billion Euros (~$18.82 billion US) # of Employees: 55,000+ in 50 countriesCompany History: 1972 – SAP is founded by five former IBM employees (DietmarHopp, Hans-Werner Hector, HassoPlattner, Klaus Tschira, and Claus Wellenreuther) startsSystems, Applications, and Products in Data Processing (SAP) in Mannheim, Germany. Their vision was to develop a standard software application for real-time business processing as opposed to the custom- built solutions being offered by most vendors at the time. 1973 – SAP releases their first financial accounting software, forming the basis for the continuing development of other software components in what later came to be known as the “R/1 system.” “R” stands for real-time data processing. These first systems ran on IBM servers and the IBM DOS operating system. 1975 - SAP introduces integrate purchasing, inventory management and invoice verification to their software. An SAP trademark starts to emerge; the integration of all of the company’s applications. Materials management data flows directly into financials accounting on a ‘value’ basis, while invoice verification and posting can be completed in a single step. 1978 - SAP introduces its Asset Accounting module and offers support for foreign languages as part of a system for John Deere’s operations in France. 1980- SAP has a customer base of approximately 100+ companies, including 50 of the 100 largest German industrial firms. The company also introduces R/2 software, utilizing a two tier architecture. R/2 was designed to work on mainframe computers, with the application and database located on the server and users accessing it via ‘dumb’ terminals. 1981 - SAP’s customer base has grown to approximately 200 companies, and with help from its existing customers, it introduces a production management module. 1983 - The module (RM-PPS) for production planning and control goes into operation at first customer. 1986 - HR module is introduced after 3 years in development. 1987 - SAP begins development of next generation (R/3) software. SAP employees approximately 500 people in 1987 with revenues of DM 157 million. 1988 - SAP has grown to nearly 1,000 employees with annual revenues of DM 245 million, and they gain their 1,000th customer; Dow Chemicals. 1989 - SAP introduces their ABAP programming environment and has grown to 1,400 employees in 15 countries with annual revenue of DM 370 million. 1991 - SAP introduces the R/3 software, which utilizes a 3 tier client/server architecture. This was the most popular release of SAP and is still used to refer to the product, although no longer technically applicable. In the R/3 architecture the presentation layer and business logic reside on a desktop computer with the database running on a database server. The release of
the R/3 product triggers a period of rapid growth for SAP. They begin a series of acquisitionsand partnerships, and by the end of 1991, SAP has more than 2,200 customers in 31 differentcountries, employees 2,700 and has annual revenues of DM 707 million.1992 - SAP augments their partner strategy, adding ‘logo partners’, which are independentconsultants supporting customer implementations.1993 - SAP partners with Microsoft to port R/3 over to the Windows NT OS. 1993 also seesSAP exceed DM 1 billion in revenue with over 3,600 employees.1994 - SAP releases SAP R/3 for Windows NT. 1994 also sees IBM adopting SAP as its software,resulting in the single largest contract that SAP had to date. Revenues top DM 1.8 billion andemployee head count tops 5,300.1995 - SAP starts to target mid-market companies and is further leveraging third parties to selltheir software. Microsoft and Burger King both join the ranks of SAP users, and sales top DM2.7 billion with 7,000 employees.1996 - SAP introduces their joint internet strategy with Microsoft, allowing users to accessdata remotely.1997 - SAP has record growth; revenues grow by 60+% to DM 6 billion, 81% of which is fromoutside of Germany. Employee headcount grows by 40% to reach nearly 13,000. Major newcustomers in 1997 include General Motors and Daimler-Benz.1998 – SAP goes public on New York Stock Exchange. Company sees another 50% increase inits headcount with employee headcount reaching 19,000+ by EOY 1998. HassoPlatner isnamed co-CEO with Henning Kagermann.1999 – SAP announces the “mySAP” strategy, which results in a complete realignment of thecompany and its product portfolio by combining e-commerce solutions with existing ERPfunctionality using web technology. HP adopts SAP. Employee headcount tops 20,000 withrevenues of 5.1 billion Euros.2000 – SAP becomes the third largest independent software vendor in the world with aworkforce of over 24,000 and annual revenue of 6.3 billion Euros, and becomes the leadingsupplier of e-business software solutions. Nestle signs up with SAP, become the largest singleorder to date.2001 –SAP acquires TopTier, an Israel-based portal software company. SAP had already beenlicensing TopTier’s “drag & relate” technology as the heart of their mySAP portal offering. Thistechnology allows SAP to offer tightly controlled access to selected data from one company’ssystem to another. These ‘buffer’ areas, known as Workplaces, are licensed for about $100per user, which provides an additional revenue stream for SAP (Nestle purchased approx.230,000 Workplace licenses). Despite the collapse of the ‘internet bubble’ SAP realizes arevenue growth of 17% in 2001.2003 – Hugo Platner, the last of the original founders, steps down as co-CEO. SAP announcesrelease of SAP NetWeaver, a technology intended to provide an enhanced integration andapplication platform that supports “end-to-end” business processes, no matter whether theyare based on SAP or come from other providers.2004 – NetWeaver is adopted by over 1,000 existing customers during its first year in release.Customer base is over 24,000 total customers running 84,000 SAP installations in 120 differentcountries. SAP merges with their consulting subsidiary (SAP SI), to enhance its ability toprovide strategic IT consulting and integration services to its customers.2005 – SAP enhances its product offering through a series of acquisitions, with a major focuson retail services. Employee headcount tops 35,800 with annual revenues of 8.5 billion Euros.
2006 – SAP announces two major releases; the first is the “Duet” software, the result of an SAP/Microsoft partnership, which allows users to quickly integrate Microsoft Office functionality. Duet is hugely successful, with partners selling 200,000 licenses within the first 90 days. The second is the release of the next generation SAP software – SAP ERP, which replaces SAP R/3. SAP also realizes significant growth with midmarket companies, with 30% of its annual revenues coming from companies with less than 2,500 employees. 2007 –SAP continues to acquire numerous smaller software firms. Announces release of SAP “Business by Design” , a product design specifically for small & midsized businesses. 2008 – SAP acquires Business Objects, a provider of business intelligence software. 2009 –Impact of economic downturn that started in 2008 increases. SAP announces SAP Business Suite 7, which is designed to help customers optimize performance and reduce IT costs. Long-time CEO Henning Kagermann retires and is replaced by Leo Apotheker. 2010 – Bill McDermott and Jim Snabe are named as co-CEOs. SAP announces acquisition of Sybase, a software company the produces databases and enterprise mobility products. At EOY 2010 SAP has revenues of 12.5 billion Euros and a headcount of just over 53,500 employees. 2011 – SAP releases SAP HANA, an “in-memory” product that allows them to analyze data in seconds rather than in days. SAP also starts to ship mobile applications that permit users to access SAP functionality from out in the field. Annual revenues hit 14.3 billion Euros with a headcount of over 55,500 employees.Product History:Following the history of the SAP product is challenging given the range of products that they’vemarketed over the years and the degree to which they’ve replaced, renamed or re-packaged productsalong the way.It is really more accurate to think of SAP’s product offering as a combination of a major“umbrella” product combined with secondary enabling products. Just like Microsoft ‘bundled’ relatedor complementary software functionality into modules under the “umbrella” of Microsoft Office, SAPhas done the same with ERP functionality. Historically, major SAP releases indicate significanttechnology-driven architectural changes more than radical new functionality. Functional improvementshave historically been developed in conjunction with willing customers, then modularized, and thenoffered up to the larger customer base.Starting with R/1, the “main” product was a modular core of base ERP functionality that includedbusiness financials. 1980 saw the release of the R/2 product and the broadening of the functionality toinclude production planning. The “umbrella” continued to grow over time as SAP developed andintroduced additional functionality over the life of the R/2 product and through the introduction andmaturing of the R/3 product. As noted previously, the changes from R/2 to R/3, at least initially, weremore around architectural rather than functionality changes. The 1991 release of R/3 was really aboutSAP embracing technological changes that made it practical to have the workstation host the
presentation layer as well as some business logic. By the late 1990s and early-2000s, the primary ‘functional’ offering of SAP had expanded to include modules that provided: Enterprise Resource Planning (ERP) Supply Chain Management (SCM) Product Lifecycle Management (PLM) Supplier Relationship Management (SRM) Customer Relationship Management (CRM) mySAP ERP Edition 2004Application mySAP ERP Edition 2003 Additional Components Self-Service Procurement Additional Components Self Services Internet Sales … and more Self-Service Procurement Internet Sales Composite Applications Strategic Enterprise Management SAP ERP Central Component 5.00 … and more Self Services SAP R/3 Enterprise SAP R/3 Enterprise Strategic Enterprise Management SAP Enterprise SAP R/3 Extension Set SAP Enterprise Extension Set SAP ECC Extension Set up to 4.6C Switch SAP R/3 Framework Application SAP R/3 Enterprise Core SAP ECC Core Enterprise Core SAP Basis SAP Web SAP NetWeaver™ SAP NetWeaver™ ‘04 Application Server PEOPLE INTEGRATION PEOPLE INTEGRATION Composite Application Framework Composite Application Framework Multi Channel Access Multi Channel Access Portal Collaboration Portal Collaboration INFORMATION INTEGRATION Life Cycle Mgmt INFORMATION INTEGRATION Life Cycle Mgmt Bus. Intelligence Knowledge Mgmt Bus. Intelligence Knowledge Mgmt Master Data Mgmt Master Data Mgmt Technology PROCESS INTEGRATION PROCESS INTEGRATION Integration Business Integration Business Broker Process Mgmt Broker Process Mgmt APPLICATION PLATFORM APPLICATION PLATFORM J2EE ABAP J2EE ABAP DB and OS Abstraction DB and OS Abstraction 1999 saw the announcement of the new “mySAP” strategy, which marked the beginning of another technological transformation for SAP. The “mySAP” strategy was SAP’s recognition of the emerging demand to embrace e-commerce, and started their drive to provide enhanced integration and collaboration capabilities. By 2003 SAP is announcing “NetWeaver” which will represent their next major technological product transformation, providing them with greatly enhanced integration capabilities and the introduction of Business Warehouse. 2004 sees the “official” replacement of the R/3 product with SAP ECC or ERP Central Component. SAP’s “mySAP” strategy also marks the adoption
of the ‘Suite” terminology (e.g. my SAP Suite), a marketing strategy aimed at broadening the adoption ofSAP functionality beyond core ERP functionality.SAP Database Support:Current generation SAP systems support the following databases Oracle Microsoft SQL Server IBM DB2 for Linux, UNIX & Windows IBM DB2 Universal Database for z/OS &iSeries IBM Informix MaxDBProduct Architecture:SAP R/3 – The SAP R/3 system architecture consists of three layers: Presentation, Application and DataStorage.
Presentation Layer – The Presentation Layer is where SAP users submit input to the R/3 system for theprocessing of business transactions. It is also where the output from these transactions appears asoutput fields, reports, tables and spread sheets. At the desktop level the user interface is handled viaSAPGUI.Application Layer – The Application Layer is a „logically independent‟ component that physically resideson the application server(s). After a user initiates a request at the presentation layer, logic within theapplication layer is invoked to service and process the user request. The application logic modules canreside on one centralized host machine or be distributed over several physical host machines.Interconnections between the various SAP applications are implemented at the application layer.Typically, update and „enqueue‟ processes reside on the database server, as do messaging, spooling,and gateway processes. The database servers may also be referred to as the “central server”.Data Storage Layer – On the database layer, R/3 uses a relational database from variousmanufacturers, including IBM & Oracle.
SAP ECCFinally SAP ECC arrived. ECC stands for ERP Central Component. SAP ECC is based on three tiered architecture(Presentation Layer, Business Logic Layer, Database Layer).This architecture is very flexible and scalable and would alsosupport SOA as well. The main strength of SAP ECC in the NetWeaver software running underneath it as a commontechnology. SAP ECC is the latest generation of SAP business software Glossary of TermsABAP – Acronym for Advanced Business Application Programming. ABAP was first developed as thereport language for SAP R/2, it was subsequently used by developers of the SAP R/3 platform. It wasalso the primary tool used to extend SAP functionality to develop custom reports and interfaces. ABAP,along with JAVA, continues to be part of the latest SAP development environment, NetWeaver.