SAP AG, headquartered in Walldorf, Germany, has evolved from a small German start-up to the world’s leading international provider of enterprise software over the course of the last three decades. Today more than 82,000 worldwide customers run SAP applications
The Beginning of a Story of Success
One Rainy day in 1972, Hasso (SAP co-founder) accidentally dropped a box of 2000 punch cards onto the wet floor while transporting them from his car. These cards contained essential data vital to the function of a newly developed standard business software – software on which the eventual creation of SAP depended. It took Hasso two days to dry the cards and rearrange them into their correct order. Had the cards been irreparably damaged, the development of the software, and by this incident had made extension the birth of SAP.
Hasso Plattner and his colleagues Dietmar Hopp, Hans-Werner Hector, Klaus E. Tschira, and Claus Wellenreuther, all employees of IBM at that time, made the decision to start their own company when IBM rejected their recom-mendation to develop software designed to be used by several users simultaneously. Hasso recalled: “We got the notion that within IBM we would never have the freedom necessary to make this idea a genuine success.”
They launched their private corporation in 1972. Called SAP ( Systemana-lyse und Programmentwickung – Systems Analysis and Program Develop-ment), it was named after the project on which they had been working at IBM. The company had its headquarters in Weinheim, and its main office in Mannheim, Germany.
Therefore, in the 1970s, while their competitors were still designing vari-ous products to tie different parts of a business together, these enterprising entrepreneurs were in the right place, at the right time, and with the right skills to develop a single software sy stem that would un ite all of a com-panies’ business functions. Their primary business concept, to develop stan-dard application software for enterp rises controlled through a centralized mainframe, was a ground breaking innovation.
SAP had already completed its first software solution for financial account ing. This solution was developed for the company’s first local customer, ICI (Imperial Chemical Industries), a British chemical giant, which owned a nylon fiber plant near Heidelberg, Germany. ICI was not only SAP’s first customer; its production plant also became SAP’s first development center.It was at this center that the foun-ders of SAP spent their days, and worked on their software solution mostly in night shifts and during the weekends. The reason was that they could not afford to buy such a system on their own and during day time ICI needed the mainframe for their operations. This single management sys-tem, designed as a real-time accounting and transaction processing pro-gram, tied ICI’s information databases together. It became known as ‘R/1’: the ‘R’ stood for real-time processing, meaning that the data was processed immediately after having been entered.
Soon, other customers in the region followed and SAP sold its standard solutions several times to different companies. For example, Roth-Händle, a cigarette manufacturer in Lahr (Germany); Knoll, a pharmaceutical company in Ludwigshafen (Germany); and other well-known customers like Freudenberg, Jacobs Kaffee, and Grundig. John Deere, a German subsidi-ary of the American tractor producer, played a special role in SAP’s development. They wanted to align the processes of their different subsidiaries with the help of software that was to run on one computer, but serve several countries, several different legal entities, legislation's, and languages.
As a result, in 1975 SAP became multilingual.
SAP continuously enhanced its already distributed program modules, and in 1982, released the SAP R/2 system. It was a major upgrade of the R/1 system and it was made compatible with IBM Hardware.
At the end of the 1980s, IBM had announced its new System Application Architecture (SAA) programming in ‘C’ language, containing rules and standards for interoperable program-ming on different platforms. IBM expected SAP to use and stick to their standard, nevertheless, at the beginning of the 1990s SAP could already assume that SAA was not going to become an industry standard. Therefore, SAP decided to develop SAP R/3, including the ABAP/4 programming language on UNIX.
Since in India its foundation in 1998, SAP Labs India has expanded from a small development facility with 100 members to the biggest R&D hub of SAP AG, outside Germany, with about 4,000 employees in 2009. Its growth has become a phenomenon that still fascinates internal and external stake-holders. Today, SAP Labs India contributes to every conceivable area of product development, starting from research and breakthrough innovation right through to mission critical customer support.
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