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SAP sees web, mobile and analytics as future of ERP

By Arif Mohamed Enterprise resource leader, SAP founded in 1972, is facing the slow death of traditional on-premise ERP. Customers with shrinking IT budgets are opting to outsource more of their core business systems. Meanwhile, web companies are offering to run business processes and applications such as customer relationship management (CRM), human resources (HR) and business intelligence (BI) over the internet. Once the kingpin of monolithic supply chain installations, SAP now faces competition from all sides. It comes from arch-rivals like Oracle and IBM to web pure-plays offering on-demand computing for a massive range of business applications. SAPs answer is to embrace cloud Software-as-a-Service (SaaS) and offer new BI and mobile computing technology. It is striving to improve the usability of its software and to listen harder to its customers. As part of its fight-back, SAP has overhauled its executive team, made two big strategic acquisitions, and focused once more on its massive installed base of more than 100,000 customers. During 2009, it shed 3,000 jobs across the business, and reported an 8% drop in revenues in 2009, compared with 2008. With its fortunes inextricably linked to the performance of the application software market, SAP had little choice but to suffer with all the other application suppliers as IT users tightened their belts. Overall, its software product revenue, excluding professional services, declined by just under 7%, compared with a decline of 1.2% for the software industry as a whole between Q3 2010 and Q3 2009. We had a very difficult 2008 tail-end and 2009, says Tim Noble, SAP UK managing director. But, as far as this year, 2010, is concerned, all regions are growing. We are continuing to show double-digit growth in software, and in the UK we have continued to show very strong performance. The UK continues to be the fastest growing major market globally for SAP, with a 38% year-on-year growth for Q3 2010. Gartner research VP John Rizzuto says, There is no denying that, in 2009, SAP had a difficult year when it came to revenue growth. However, it was able to focus on many operational aspects of its business to maintain and, in some instances, improve its financial position. But it ended the year with an improved financial performance and a coherent growth strategy. Its third quarter 2010 revenues were just over 3bn, compared with 2.5bn in Q3 the previous year, with an operating profit up 716m from 619m for the same period the previous year. Although the results were slightly lower than analysts had predicted, SAP breathed a sigh of relief at having survived a difficult year and a half During 2010, SAP made about 45% in revenues from its ERP suite of applications and services, 18% from BI, 16% from CRM and 11% from supply chain management (SCM). The remaining 10% of its revenues came from other application software and services. SAPs biggest two rivals are IBM and Oracle. The latter now owns several of the other big ERP/CRM players including PeopleSoft, Siebel and JD Edwards. However, in the past three years, SAP has made several strategic acquisitions of its own. Among these was the purchase of BusinessObjects in 2007, giving SAP new BI capabilities. The second was of database and BI giant Sybase in July 2010. This will give SAP users the ability to access, manage and analyse information on mobile devices. At a glance guide to SAP
German business software firm SAP was founded in 1972 by five ex-IBM employees. From the outset, the company had a vision to create business software that would help companies to run their operations more efficiently. SAP saw its fortunes take off with the mass adoption firstly of mainframe computing, then client-server, and more recently web-based computing. It managed to attract big-name companies early on, particularly to its ERP suites SAP R/2 and R/3, and quickly expanded its user base beyond Germany. Its users have included the likes of Coca-Cola and Cadbury Schweppes, but leading companies in all industries use, or have used SAPs software as part of their operations. Over time, SAP has expanded beyond ERP into CRM, SCM, HR and finance, and many other niche areas of enterprise and industryspecific operations. The company has faced criticism over software usability, the lengthy time and cost of implementations, software management complexity, and customer relations. However, it is currently raising its game in these areas by overhauling user interfaces, introducing mobile and web-based application deployment, and working closely with its user groups. SAP has grown to become Europes biggest software firm, and one of the top enterprise technology firms, competing against other giants such as IBM, Oracle, Microsoft and HP. In Q2 2010, it announced its landmark 100,000th customer, with revenues exceeding 3bn in Q3 2010.

a whitepaper from ComputerWeekly

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Key facts

SAP

Beyond ERP SAPs strategy is to build on its core SAP Business Suite, a modular system that it sells across a spectrum of industries. It includes core business applications such as ERP, CRM, SCM, supplier relationship management (SRM), and product life-cycle management (PLM). On top of this infrastructure, SAP offers SAP Crystal Solutions, a family of integrated reporting, dashboards and presentation tools, and the SAP BusinessObjects portfolio of BI applications. The SAP software suite is modular and uses service oriented architecture (SOA). This allows it to interoperate with products from other suppliers. SAPs applications use a middleware platform called Netweaver which unites and orchestrates the software stack. This SOA approach has enabled SAP customers to implement ERP and other enterprise systems much faster than was previously possible in the days of SAP R/2 and R/3, the former ERP platforms. These sometimes took years to set up and hone, whereas todays implementations can sometimes be completed in a matter of months. Phil Cook, general manager IS at RS Components, which is a SAP user, says that SAP sells a solid traditional product offering, providing robust, scalable applications offering strong integration within the SAP product suite. SAP has a coherent technology strategy, he says, offering its technology on-premise, via the cloud, and on mobile devices, and its software performs well in high-volume, high-performance environments. SAPs two strategic acquisitions of Sybase and BusinessObjects have strengthened the companys product offering, and helped it to expand into areas where it was previously weak. There is recognition of the need to move from the pure efficiency drivers of the past to providing the intelligence that allows organisations to understand changing customer demand. SAP also recognises the need to support the agility of business processes to allow organisations to respond to that changing demand, says Cook. In-memory, on-device, on-demand The acquisitions have enabled the supplier to pursue its threefold product delivery strategy, making technology available on-premise, on-demand and on-device. SAPs BI and analytics strategy is enhancing core applications such as CRM and HR, says Noble. The strategy is to ensure that businesses can make their best informed decisions by providing the analytics for core systems. SAPs forthcoming High-Performance Analytic Appliance (HANA) technology, which uses the SAP Business Analytic Engine, is an important piece of the analytics picture. This appliance will provide in-memory data management (which SAP calls NewDB), query and calculation acceleration, as well as a multidimensional modelling environment, without impacting existing applications or systems. Noble says it will be useful, for example, in large retail organisations trying to analyse large amounts of transactional, mission-critical data. One beneficiary might be a supermarket that produces many different consumer products and needs real-time analytics for its stores and distribution operations. The benefit of HANA over other server technologies is that databases held in-memory can be accessed an order of magnitude faster than server/disc-based data. But Hannah will really start to show its power when used to interrogate ERP transactions and for business online transactional processing (OLTP), say analysts. SAP announced it will partner with hardware partners HP and IBM to produce HANA, which will be trialled by 20 pilot customers in December 2010 at its Sapphire 2010 user conference. Current SAP BW [business warehouse] customers should evaluate it, as it will be central to

2009 full-year Non-GAAP revenues 10.7bn, with 2.9bn operating income. Specialisms: ERP, BI, CRM, SCM Employees: 52,921 employees in 50 countries, including more than 800 UK-based staff. Customers: 100,000 in 120 countries. History: founded in 1972 by five former IBM employees, SAP is headquartered in Walldorf, Germany, and has grown to become Europes largest software firm, and a world leader in enterprise applications and support.

Products SAP Business Suite Core applications: SAP CRM, SAP ERP, SAP PLM, SAP SCM & SAP SRM Also includes: SAP solutions for sustainability, Duet, Alloy, SAP xApps Composite Applications SAP xApp Analytics, SAP xApps for Mobile Business Business Solutions SAP BusinessObjects BI platform SAP BusinessObjects GRC solutions SAP BusinessObjects EPM solutions Service and Asset Management SAP solutions for SMBs SAP Business All-in-One SAP Business By Design SAP Business One SAP BusinessObjects portfolio SAP Crystal solutions

Top five ERP suppliers by ERP software revenue

20 15
$bn

10 5 0
SAP Oracle Sage Infor Microsoft

Source: 2008 financial reports

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SAP executives
Co-CEO officer Bill McDermott (right) Co-CEO Jim Hagemann Snabe CFO Werner Brandt Chief HR officer, labour relations director Angelika Dammann COO Gerhard Oswald CTO Vishal Sikka

SAP

SAPs BI and data warehousing strategy, says Gartner research director Thomas Otter. Another key technology that SAP is working on is on-device computing. It is putting enterprise data tools literally in the hands of the user. This is where the Sybase acquisition will prove its worth, as Sybase had great success both with databases and mobile technology. For example, in May 2008, the Sybase IQ analytics server set a new Guinness World Record by powering the worlds largest data warehouse. In the same year, Sybase launched an analytics platform for Wall Street, and promoted the Sybase Unwired Platform (SUP), a platform for developing mobile applications across a heterogeneous environment. Sybase made $1bn in revenue in 2007. Both Sybase and SAP are device-agnostic. As a result, SAP believes it can grow its user base by offering SAP on any mobile device, whether its an iPad, a Blackberry or other smart phone. The supplier is also ramping up its ERP on-demand cloud offerings with SAP Business By Design. This is SAPs software-on-demand business management suite designed for small and medium-sized businesses. It features preconfigured processes for managing financials, customer relationships, human resources, projects, procurement, and the supply chain. SAP installs, maintains and upgrades the software, which is a departure from its traditional on-premise IT model, but enables SAP to move with the times. Commentators say that, thus far, SAP has fumbled its on-demand strategy. However, it is now under the control of a single executive. Doug Merritt, and SAP is claiming success with more than 200,000 subscribers signing up for its BI on demand. SAP launched Version 2.5 of Business By Design in the UK in July, one of the four launch nations. However, analysts have been scathing about the lateness of its arrival. Bo Lykkegaard, programme director European enterprise applications at IDC, says, The original design of Business By Design was flawed in terms of cost efficiency and the redesign delayed volume launch significantly. Initial customer experiences with Business By Design sound very promising, but SAP must deliver a successful and simple-to-consume product during the current volume launch. Another Business By Design failure could damage SAP stock value and strategic agility very significantly, he says. Also, SAP has been late to the game with SaaS for larger enterprise. Here the pressure is on John Wookey [SAP executive VP for large enterprise on-demand, and an ex-Oracle apps executive] to deliver specific SaaS apps such as expense management for the existing SAP customer base, says Lykkegaard. Alan Bowling, chairman, UK and Ireland SAP User Group, says, Rightly or wrongly, SAP has been criticised for being slow to bring its SaaS offering to the market, but hopefully the result is a more robust and compelling offering. Users potentially stand to benefit from SAPs hybrid approach whereby organisations have some processes in the cloud, whilst others are kept within the business. This means that users dont have to put their business-critical processes in the cloud if they feel it is too risky, but can still reap the cost and flexibility benefits for other areas of their business. Core strengths One of SAPs strengths is its ERP market leadership. In 2008, SAP reported ERP software revenues of $17bn, with Oracle at 7.8bn and Sage at $2.4bn. ERP competitors Infor and Microsoft Business Solutions made about $2bn each from ERP. Derek Prior is research director at Gartner and has been an SAP analyst since 1998. SAP really does lead the world in ERP and has done an admirable job in developing a depth of ERP functionality. At the heart of SAPs rise to fame is the ability to provide ERP on a choice of open platforms in collaboration with an amazing ecosystem of partners. Its quite rare that you find a SAP customer that has not been able to take that core

SAP UK executives
Tim Noble, managing director, SAP UK & Ireland Noble joined the company in June 2009 before which he was senior VP and executive officer at Gartner, where he worked for 15 years. His primary focus is to drive SAPs business strategy, and execute growth plans. Teri Ellison, human resources director Ellison joined SAP in April 2008 as HR director for the UK and Ireland. She is responsible for attracting, retaining and developing more than 800 employees. Peter Heffner, strategic account director As a director of the UKI executive board, Heffner is responsible for ensuring consistent value management and service delivery to SAPs largest and most strategic UK and Ireland customers. Frederic Arrouays, chief financial officer Arrouays is responsible for the organisations finance and admin activities, and joined from BusinessObjects. Guy Armstrong, director of services Armstrong is responsible for services and support and joined SAP in 2005 from Gartners Benchmarking & Consulting Practices. Carolyn Horne, chief operating officer As COO, Horne is responsible for providing the sales support infrastructure to drive sales and operational excellence. She has more than 17 years experience in the software industry.
Source: SAP

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SAP revenue breakdown by region
Asia Pacific 13%

SAP

capability and gain some advantage from it, although there have been some high-profile IT failures, he says. SAPs presence throughout the world gives the company an advantage over rivals. Multinational organisations are keen to implement technology they can manage across multiple jurisdictions. The ERP leadership is important because most new applications must in one way or another tie in with the ERP system, which is often the transaction backbone of the company. So, if all new applications must integrate to the ERP system, customers often consider the ERP supplier when buying new applications, because the integration headache will be less pronounced, says Lykkegaard. SAPs other strengths are its access to senior leadership in those same companies, and excellent account control: a strength it shares with IBM, he says. And having bought BusinessObjects, the market leader in BI, SAP has been successful in selling BI and analytics solutions into its own installed base. IT failures No one seems in any doubt that SAP has highly effective technology that helps its customers to save money through running their operations more efficiently. Like its German counterparts BMW, Bosch and Audi, SAP enjoys a reputation of having top quality products that just work. However, like all major technology suppliers, SAP has had to deal with IT failures. Highprofile SAP users, including ICI, Levi Strauss, Birmingham City Council, US drug distributor FoxMeyer, and fellow technology supplier HP, have all had major issues with their ERP systems that have adversely affected their businesses. In February 2003, Computer Weekly reported that ICI was writing off a total 23m as a result of a failed SAP software implementation the previous year, in its Quest flavours and fragrances division. The problems centred on a project known as Q-Star: a SAP-based plan to optimise the supply chain that was due to save Quest 20m a year by 2004. HP experienced multiple IT problems when it attempted to centralise its disparate North American ERP systems onto one SAP ERP system in 2004. The project eventually cost HP $160m in order backlogs and lost revenue, more than five times the projects estimated cost. At the time, Gilles Bouchard, then CIO of HPs global operations, said, It was mostly capacity issues, material issues and factory issues. We had a series of small problems, none of which individually would have been too much to handle. But together they created the perfect storm. Then in October 2007, a SAP-based system belonging to Birmingham City Council ran into difficulties, following the partial failure of the automatic installation of SAP software on about 5,000 PCs. As a result, Europes largest local authority was left with a backlog of more than 18,000 unpaid invoices. Besides the high-profile IT problems, SAP has also made itself unpopular with users with an unwanted change to the global support agreement. In 2008, SAP announced that it would move all of its customers to its more comprehensive but expensive Enterprise Support programme by the first of January 2009. However, the move was met with opposition from many SAP customers. Fortunately for customers, SAP took longer than expected to complete its benchmarking process, and delayed the move at the end of 2009. Then in January 2010, SAP made a U-turn, announcing it would reintroduce its Standard Support licensing, in a move seen as a coup for SAP users. Alan Bowling, SAP User Group UK and Ireland chairman, says, Clearly over the last couple of years SAP through, unwisely embarking on its Enterprise Support path, created a

Americas 34%

EMEA 53%

Source: SAP

SAP UK offices
SAP (UK) Limited Clockhouse Place Bedfont Road Feltham Middlesex TW14 8HD Tel: +44 (0) 870 608 4000 Fax: +44 (0) 870 608 4050 SAP Ireland 1012 1014 Kingswood Avenue Citywest Business Campus Dublin 24 Ireland Tel: +353 1 467 4000 Fax: +353 1 467 4050 Support & Consulting Tel: +353 1 855 8034 SAP Galway SAP Ireland Parkmore Business Park East Galway Ireland Tel: +353 91 404 400 Fax: +353 91 404 410

SAP Research CEC Belfast TEIC Building University of Ulster Shore Road Newtownabbey BT37 0QB Phone +028 90 930084
Source: SAP

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SAP 2010 revenue estimates by software market
Other application software 5% CRM 16% SCM 11%

SAP

different atmosphere with its customers. At the same time the world has changed through some brutal economic conditions where the value that IT offers to the enterprise is now under a much higher level of scrutiny. SAP is listening to user groups, and therefore its customers, taking on board their feedback and making changes to meet the needs of all SAP users, says Bowling. Back in 2008, we highlighted that the new Enterprise Support offering could potentially offer a lot of value and that it contained much more than Standard Support. However, we also noted that many of our members were not happy moving to the more expensive and feature-rich Enterprise Support offering. As a user group, and as part of the SAP User Group Executive Network, weve been in dialogue with SAP about offering more choice in relation to support and demonstrating the increased value that Enterprise Support offers. Many of us have felt that SAP was not as customer friendly as it appeared in the past but in recent months all that has changed with a far more proactive approach, certainly evidenced through the user groups, says Bowling. User focus Many experts said that SAP is facing a customer perception issue, seeing the company as either not sufficiently engaged with them, or not focused on helping them get the best value from their SAP implementations. But UK MD Tim Noble says that SAP is making a new and concerted effort to listen to its users and to work more closely with the user groups. His appointment illustrates the change in strategy. Noble joined SAP in June 2009 from Gartner Group where he was senior vice president and executive officer of global sales, a highly customer-centric role. [Putting customers first has] been one of the main tenets of my strategy and focus. Customers know what SAP does and its product, which just works and transforms our clients businesses. And our product is incredibly strong, but what we need to do now is to put the customer at the forefront of what we do, says Noble. At the same time, SAP aims to offer its enterprise customers single and consistent account management across the products and services they use. This has meant organising its 1,100 UK consultants and field service personnel to communicate well with each other, for the sake of the customer. SAP continues to organise its sales and support operations by the industry, offering deep sector expertise which it has built up across the years. The industries in which SAP specialises include banking and insurance, defence and security, public sector and health care, all flavours of manufacturing, transportation and logistics, mining, oil and gas, retail, telecoms, and media. As such, it is able to offer customers in specific sectors a tailored package of products and services with methodologies and processes that are suited to that industry. Noble claims that as a result of its renewed customer focus, the companys quarterly customer satisfaction surveys have improved significantly throughout the course of this year, culminating in the latest poll which found that 92% of customers said they were satisfied with SAP. Other initiatives that include a complete redesign and simplification of the SAP CRM solution. And it has produced a completely new, modernised user interface for its business applications, called the Netweaver Business Client. SAP launched Rapid Deployment Editions for specific applications such as CRM, SCM and business communications management in September 2010. These bundle up software, services and content, significantly reducing the costs and risks associated with SAP implementations. With the CRM Rapid Deployment, for example, SAP says users can implement the software in as little as six to eight weeks, and pay an affordable monthly rental or perpetual licence. Room for improvement However, despite SAPs best efforts, analysts feel it is still not doing enough to help custom-

Other software 5%

BI 18%

ERP 45%

Source: Gartner and SAP

SAP 2010 revenue estimates by industry vertical

Public services 11% Financial services 8% Process industries 19%

Discrete industries 20% Service industries 24% Consumer industries 18%

Source: Gartner and SAP

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Customer list

SAP

IDCs Lykkegaard says, SAP must make its applications easier to implement, easier to use, and easier to maintain and change. Most people say that when SAP is installed, it runs. The problem is the costs associated with implementation. Also, SAP must make its business applications more collaborative in the spirit of web 2.0. For now, collaboration is almost exclusively done in a consumer context: collaborative role playing games, on Twitter, on Facebook, forum discussions, on YouTube, etc. But collaborative applications are quickly entering the world of business starting in CRM with examples such as Salesforce.com Chatter, Oracle Social CRM, Lithium CRM, and more recently in HCM [human capital management] with Successfactors. IDC believes that a huge potential exists for such apps, and SAP must develop a response to this, says Lykkegaard. RS Components Cook says that as a SAP user, he would like to see an improved licensing model. Changes have been made for the right reason (use of SAP functionality via services outside of the SAP portfolio), but there are inconsistencies. The mixed model leads to confusion and disengagement, he says. Gartners Prior adds that SAP could improve its game in a number of areas. These include ease of use, the speed of making changes to ERP and business applications, and customer care. In terms of ease of use, I think Apple is showing them up with the ease of use of their technology, the iPhone or iPad. The sheer ease of use does hold SAP in stark contrast and I believe that SAP is very jealous of their usability and is overhauling their interfaces. But it needs to do a lot more, says Prior. SAP also needs to be more consistent in communicating its product roadmap, says Prior, as well as what it considers to be a roadmap. We would see this as the functionality that products will be enhanced with over the years. Customers have told me you get different messages from SAP in different countries. It needs to try harder at helping existing customers to unlock value from what they have already bought, he says. Bowling agrees, Greater input into, and visibility of product roadmaps has been a longstanding wish for many of our members. Over the last 12 months there has been a renewed focus from the company in listening to its customers and receiving greater input from them. It is very much a two-way relationship as SAP wants to get closer to its users, while we want to get closer to SAP to ensure that we are able to influence their future product roadmap. Fighting back SAP has clearly been fighting back to win the hearts and minds of its users. Analysts have welcomed what they describe as a renewed and vibrant leadership team. The appointment of Noble is not the only change that SAP has made at the top of its organisation. In February 2010, in a remarkable game of inter-company musical chairs, SAPs CEO Lo Apotheker resigned and subsequently became HPs new CEO, replacing Mark Hurd who is now president at SAP-rival Oracle. In place of Apotheker, SAP appointed two co-CEOs: Bill McDermott, head of the global field organisation, and Jim Hagemann Snabe, head of business solutions and technology. In the same month, CTO Vishal Sikka was appointed to the executive board, and Gerhard Oswald, executive board member responsible for global service and support, was appointed COO, replacing Erwin Gunst. Then in April 2010, the supervisory board approved Angelika Dammann to the executive board, who took on the HR portfolio in July 2010. Users have welcomed the change in executive leadership, says Bowling. The new management structure, in my view, offers a lot of promise. To have that balance between product and sales is so important. At the end of the day you need great products and then you need to sell it well. Prior adds, SAP is showing good promise with the twin CEOs. Jim is a very product-orient-

UK customers include: Amerada Hess e-procurement Anglian Water e-procurement B&Q Financials Bank of Ireland e-procurement, financials, HR British American Tobacco integrated global IT & financials British Gas Hydrocarbon Resources SCM British Waterways Netweaver Cadburys Schweppes Human Resources Diageo BI, Netweaver middleware Finnforest Supply Chain Management Glanbia gain accurate business and customer view Hewlett-Packard Supply Chain Management Homebase Business Intelligence ICI Financials Kent Police SAP ERP for back office processes Kimberly-Clark Supply Chain Management London Borough of Southwark BI, Netweaver Microsoft Supply Chain Management Miller Brands UK ERP implementation Oxford University Press BI, SCM Rexam Netweaver middleware Rolls Royce Business Intelligence Royal & SunAlliance compliance and streamlining data Royal Mail Group Financials Ryanair Financials The Body Shop global retail business processes, Netweaver The Electricity Supply Board BI, financials The Royal SunAlliance Business Intelligence The University of Newcastle Upon Tyne Netweaver Time Out SAP Business One University of Stirling Human Resources University of Westminster Human Resources Vision Express Supply Chain Management Yorkshire Water BI, HR, financials, e-procurement Source:SAP

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SAP

ed person, and SAP also has a very strong sales person in McDermott. You could argue that Henning Kagermann [SAP CEO between 1998 and 2009] had all of those qualities. He also had a very strong customer care mentality. The two new CEOs need to bring a new ethos to satisfy their customers that SAP cares about them. SAP continues to fight hard against its biggest rival Oracle. Big customer wins are hard to achieve. But in October 2010, Gatwick Airport left Oracle and signed a multi-million pound IT contract with SAP and Siemens IT Solutions and Services, a coup for the German double act. The deal will involve SAP and Siemens halving the airports 140 IT legacy systems and integrating them into one new SAP system. It also means that Gatwick Airport will decouple itself from BAAs IT system on the path to full independence. This was a competitive ERP win against Oracle, but a big piece of it is CRM and BI analytics, says Noble. The UK continues to go from strength to strength, and the year on year growth is an example. We are making some strategic wins, and have increased our relationship with Vodafone in the last quarter for example. The UK strategy is very in line with the corporate strategy of on-premise, on-device and on-demand, plus the orchestration that Netweaver brings. I have made a big play of improving the relationship with the user groups, and ensuring consistency in account management. SAP can improve by continuing to work with our customers and famous partner ecosystem. SAP faces growing competition from established SaaS providers like Salesforce, as well as giants like Oracle and Microsoft, which are beefing up their application on-demand services. Meanwhile, the traditional on-premise ERP market is shrinking as IT users are forced to implement IT on smaller budgets. Consequently, many SAP users will and should consider moving core back-office operations and business processes, including SCM, HR, accounting and payroll, and even ERP and CRM, away from SAP. But on the other hand, analysts and users agree that SAPs software stack is strong, reliable and open, and allows enterprise systems to remain within the companys control. If SAP can successfully extend ERP through mobile and cloud computing, and stay on top of customer care, it may be worth staying the course with SAP.

Headcount by region and function

52,921 26,730 14,542

n EMEA n Americas n Asia/Pacific/Japan n Totals

Source: SAP

SAP Group (30 September)

Professional and other services

Software and related services

General and administration

Research and development

Infrastructure

Sales and marketing

11,649

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1992: SAP releases SAP R/3 to the general public. It generates nearly 50% of sales outside Germany and its global workforce grows to 3,157 by year end.

SAP

The rise, fall and rise again of SAP

1972: Five former IBM employees, including Hasso Plattner, start SAP (Systemanalyse und Programmentwicklung). Their aim is to develop application software for real-time data processing. The founders spend most of their time in their customers datacentres. They mainly develop the first SAP programmes at night and on weekends. 1973: SAP completes its first financial accounting system RF and gains customers Rothndle and Knoll. SAP launches R/1 ERP system. 1977: SAP moves from Weinheim to Walldorf, and begins installing its system for customers outside of Germany. 1979: SAP brings the completely redesigned ERP suite SAP R/2 to market, achieving a high level of stability in 1981. 1981: The growth of mainframes helps SAP to expand its customer base to 200 companies. 1982: SAP generates DM24m in revenue and reaches the 100-employee milestone. Approximately 96% of its customers use SAP software to manage business processes. 1985: SAPs datacentre boasts three IBM servers and one Siemens server, giving employees access to a total of 64Mbytes of main memory for developing new software. SAP locates employees in a new office in Switzerland, to expand its international reach. 1987: IBMs new generation of servers makes SAPs software available to midsize customers, generating between DM30m and DM200m in revenues. SAP establishes SAP Consulting to support new customers. SAP begins developing SAP R/3. 1988: SAP changes from being a private, limited-liability company into the publicly traded SAP AG. It increases its capital stock from DM5m to DM60m. Dow Chemicals becomes SAPs 1,000th customer. Meanwhile, SAP begins developing RIVA a billing and administration system for utility companies. 1989: SAP overhauls the user interface for SAP R/2. SAPs development datacentre now contains servers from IBM, Siemens, DEC, and Hewlett-Packard, providing a total memory capacity of 1,224Mbytes. The Switzerland operation now controls 12 international subsidiaries. With offices in 15 countries, SAPs 1,400 employees generate DM370m in revenue. 1990: SAP invests DM110m in R&D to further develop SAP R/2 and the new SAP R/3 system. The reunification of West and East Germany brings the nations economies and currencies together, and SAP expands into East Germany, forging a joint venture in Dresden with Siemens Nixdorf and Robotron. SAP opens a branch office in Berlin. 1991: SAP presents the first SAP R/3 applications at CeBIT in Hanover. The client-server system has a uniform GUI and dedicated relational databases. SAP begins developing a Russian version of SAP R/2.

1993: SAP works with Microsoft to port SAP R/3 to Windows NT, and ports it to Sun, enabling it to run on RISC platforms. 1994: IBM uses SAP R/3 to manage its global business processes, the largest contract in SAPs history. 1995: Burger King becomes the 1,000th customer to implement SAPs software for HR management. 1996: SAP adds online features to SAP R/3. Coca-Cola implements SAP R/3. 1997: The companys revenues grow by 62% to DM6.02bn, 81% of which comes from outside of Germany. SAPs workforce also expands 40% to nearly 13,000 employees. 1998: Two founders, Dietmar Hopp and Klaus Tschira, move to the SAP supervisory board. Henning Kagermann is named co-CEO alongside cofounder Hasso Plattner. 1999: SAP launches its mySAP.com initiative, adding e-commerce to the ERP suite. 2001: SAP adds corporate portals to its portfolio by taking over TopTier. Its charismatic founder, Shai Agassi, takes over the management of this business area and is appointed to the SAP executive board in 2002. 2003: Plattner is elected chairman of the supervisory board. SAP introduces Netweaver SOA middleware and its modular, open standards future. 2005: SAP acquires several smaller companies including retail providers Triversity and Khimetrics. 2006: SAP and Microsoft introduce Duet, a joint development, enabling users to quickly and easily integrate Microsoft Office and SAP-supported business processes. The current ERP platform, SAP ERP, is launched. 2007: SAP Business By Design is released. SAP faces Oracle in court over software theft allegations of SAP Texas subsidiary (formerly TomorrowNow). SAP later admits some degree of wrongdoing, facing Oracle in court again in 2010. 2008: SAP completes buy-out of BI specialist BusinessObjects. Lo Apotheker becomes co-CEO. SAP raises support agreement costs with Enterprise Support contract, but subsequently abandons this. 2009: SAP weathers downturn by cutting 3,000 jobs across the business, and sees revenues decline 8% from 11.7bn in 2008 to 10.7bn in 2009. Kagermann leaves SAP and Lo Apotheker becomes CEO. 2010: Apotheker leaves SAP, and Bill McDermott and Jim Hagemann Snabe are named co-CEOs. In May, SAP buys Sybase for $5.8bn.