Founded in 1972 as a private partnership named Systemanalyse und Programmentwicklung (lit. ’System Analysis and Software Development’; SAP GbR), which in 1981 fully became Systeme, Anwendungen und Produkte in der Datenverarbeitung (SAP GmbH) after a five-year transition period beginning in 1976.[2]:1972–1980 In 2005 it further restructured itself as SAP AG. Since 7 July 2014, its corporate structure is that of a pan-European societas Europaea (SE);[8][9] as such, its former German corporate identity is now a subsidiary, SAP Deutschland SE & Co. KG.[8] SAP is headquartered in Walldorf, Baden-Württemberg, Germany with regional offices in 180 countries.[10][3] The company has over 425,000 customers in over 180 countries[11] and is a component of the Euro Stoxx 50 stock market index.[12] A 2001 article said it was “the third-biggest software company in the world.”[13]

History Formation When Xerox exited the computer hardware manufacturing industry in 1971,[14] it asked IBM to migrate its business systems to IBM technology. As part of IBM’s compensation for the migration, IBM was given the rights to the Scientific Data Systems (SDS)/SAPE software, reportedly for a contract credit of $80,000.

Five IBM engineers from the AI department[15][16] (Dietmar Hopp, Klaus Tschira, Hans-Werner Hector, Hasso Plattner, and Claus Wellenreuther, all from Mannheim, 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.[4][17]

In June 1972, they founded the SAP Systemanalyse und Programmentwicklung (“System Analysis and Program Development” / “SAPD”) company, as a private partnership under the German Civil Code.[18]

Their first client was the German branch of Imperial Chemical Industries in Östringen,[19] where they developed mainframe programs for payroll and accounting. Instead of storing the data on punch 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 a real-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.[20]

Enterprise Resource Planning In 1973, the first commercial product was launched. SAP completes its first financial accounting system - RF. This system serves as the cornerstone in the ongoing development of other software modules of the system that will eventually bear the name SAP R/1.[18]

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, a database was necessary.[21]

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.[18]

The headquarters moved the following year to Walldorf, Germany. Three years later, in 1979, SAP launched SAP R/2, expanding the capabilities of the system to other areas, such as material management and production planning. In 1981, SAP brought a re-designed product to market. However, SAP R/2 did not improve until the period between 1985 and 1990. SAP released the new SAP R/3 in 1992. SAP developed and released several versions of R/3 through 1995. By the mid-1990s, SAP followed the trend from mainframe computing to client–server architectures. The development of SAP’s internet strategy with redesigned the concept of business processes (integration via Internet).[17] As a result, R/3 was replaced with the introduction of SAP ERP Central Component (ECC) 5.0 in 2004.[22] Architectural changes were also made to support an enterprise service architecture to transition customers to a services-oriented architecture. The latest version, SAP ERP 6.0, was released in 2006. SAP ERP 6.0 has since then been updated through SAP enhancement packs, the most recent: SAP enhancement package 8 for SAP ERP 6.0 in 2016.[23]

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