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Author's profile photo Tuncay Karaca

A Success Story: SAP

Today I came across “Germany 2006: SAP is a German and European success story” article at Finfacs Ireland. It is a very nice article which combines SAP’s success story, future trends and FIFA World Cup 2006 which will begin in Munich on June 9th.

I am thinking a series of article about SAP and aspects of an SAP Technical Consultant. It is obvious the first article should be “What is SAP?”. I think this article is a kind of impressive article which describes SAP very well. So I would take whole article here and underline some sentences.

SAP is a world market leader in business management software for large firms. Now it is also increasingly winning customers in the small and medium business sector.

When Germany first hosted the football World Cup in 1974 nobody knew the name SAP. When it last took the World Cup title in 1990 in Italy, SAP was possibly a term familiar among computer experts. Now – 34 years after the company was founded – SAP stands not only for «systems, applications and products for data processing,» but also for an almost unique German success story. With nearly 36,000 employees in 50 countries, SAP has long been a worldwide synonym for enterprise software.

In 2006 the software company from Germany’s Baden-Wuerttemberg province hit the high point of its relatively young history. SAP is the only German technology company to have become a premier league player in the international IT industry in such a short time. Its undisputed position as market leader in its field has been hard-won.

On the stock exchanges SAP is one of the most highly-rated German companies, and is for example more valuable than traditional heavyweights such as car manufacturer DaimlerChrysler or Deutsche Bank.

Despite SAP’s soaring fortunes, CEO Henning Kagerman and the head of the supervisory board, Hasso Plattner, are not yet satisfied. Both know that good fortune can quickly change in the fast-moving software market. SAP wants to continue with last year’s rapid growth, during which the German company regularly outstripped its competitors. In the end Oracle – the keenest competitor in the market for enterprise software – could only keep up with SAP through a string of acquisitions.

Kagerman wants still more. By 2010 turnover should have risen to double the current total of almost 6 billion euros. In terms of profitability, where SAP has never been a world leader, Kagerman wants to catch up with competitors. With this in mind, he is making major changes within the company. SAP is locating even more development centres abroad. This has not always gone down well in the company’s Walldorf headquarters. Some employees warn of «Americanization.» Kagerman has not let this bother him and constantly stresses Germany’s special significance to the firm.

In its home market SAP is also investing in new office buildings and personnel. In Germany staff numbers have grown from 1,000 to 14,000 since the end of 2003. Despite Germany’s comparatively restrained growth, the company wants to remain on its home territory and ranks as one of the country’s favourite employers. A recent push by several employees means that SAP now has a workers’ council for the first time in its history.

The recruitment of renowned technology expert Shai Agassi met with some resistance from top German developers. The Israeli guru should make SAP software, which for a long time was complex and demanded high installation costs, fit for the future. With this aim SAP is taking a completely new path, restructuring its software from the ground up and attempting to tap into a new customer base with simpler and less complex programmes.

Installation of SAP software used to be expensive in terms of costs and time, but the latest developments mean that simple programmes can be installed in a matter of days for a five-digit sum. By 2010 the number of customers should have tripled to 100,000. At the same time SAP also hopes to increase its workforce – to around the 40,000 mark by the end of 2006.

The five company founders, Claus Wellenreuther, Hans-Werner Hector, Klaus Tschira, Dietmar Hopp and Hasso Plattner could not in 1972 have foreseen the world success story SAP would become. Today they are among the richest people in Germany and are active as patrons of the arts and sport sponsors. Dietmar Hopp in particular has hit the headlines with reports that he is establishing a new football club in SAP’s home region.

He hopes to take it all the way to the top football league, the Bundesliga.

As a football fan and as a major SAP shareholder, 2006 promises to be a special year for him.

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