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SAP SE (/ˌɛs.ˈp/; German pronunciation: [ɛsʔaːˈpeː] ) is a German multinational software company based in Walldorf, Baden-Württemberg, Germany. The company is the world's largest vendor of enterprise resource planning (ERP) software.[3][4][5]

Key Information

SAP GbR became in 1981 fully Systeme, Anwendungen und Produkte in der Datenverarbeitung (Systems, Applications and Products in Data Processing) abbreviated SAP GmbH after a five-year transition period beginning in 1976.[6] In the late 1980s, it further restructured itself as SAP AG.[7] Since 7 July 2014, its corporate structure is that of a pan-European societas Europaea (SE);[8][9][10][11] as such, its former German corporate identity is now a subsidiary, SAP Deutschland SE & Co. KG.[10] It has regional offices in 180 countries[12][13] and over 111,961 employees.[14]

SAP is a component of the DAX and Euro Stoxx 50 stock market indices.[15] The company is the largest non-American software company by revenue and the world's fifth-largest publicly traded software company by revenue. In June 2025, it was the largest European company by market capitalization, as well as one of the 30 most valuable publicly traded companies in the world.[16]

History

[edit]

20th century

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When Xerox exited the computer hardware manufacturing industry in 1971,[17] 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 repository. Five IBM engineers from the AI department[18][19] (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.[3][20] 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.[21]

Their first client was the German branch of Imperial Chemical Industries in Östringen,[22] 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.[23]

In 1973, SAP launched its first commercial product, the RF financial accounting system. This system served as the cornerstone in the ongoing development of other software modules of the system that eventually bore the name SAP R/1.[21] 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.[24]

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.[21]The headquarters moved the following year to Walldorf, Germany.

In 1979, SAP launched SAP R/2, expanding the capabilities of the system to other areas, such as materials management and production planning.

In 1981, SAP brought a re-designed product to market. However, SAP R/2 did not improve until between 1985 and 1990.

In 1992, SAP released SAP R/3. SAP developed and released several versions of R/3 through 1995.

In August 1988, SAP GmbH became SAP AG, and public trading started on 4 November 1988. Shares were listed on the Frankfurt and Stuttgart stock exchanges.[20] In 1995, SAP was included in the German stock index DAX and, on 22 September 2003, SAP was included in the STOXX Europe 50.[25]

In the mid-1990s, SAP transitioned from mainframe computing to a client–server architecture. In 1996 it began its alliance with the Spanish technology consulting firm Seidor, initiating the expansion of SAP solutions throughout Latin America.[26]

21st century

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The Chief Executive Officer of SAP SE meeting with President Ilham Aliyev of Azerbaijan

In 2004, R/3 was replaced with SAP ERP Central Component (ECC) 5.0.[27] Architectural changes were also made to transition customers to a service-oriented architecture.

The company's official name became SAP AG (a public limited company) after the 2005 annual general meeting.

In 2006, SAP ERP 6.0 was released. SAP ERP 6.0 is the latest version has since been updated through SAP enhancement packs, the most recent being enhancement package 8 for SAP ERP 6.0 in 2016.[28]

Since 2012 SAP has acquired several companies that sell cloud-based products, with several multi-billion-dollar acquisitions seen by analysts as an attempt to challenge competitor Oracle.[29] In 2014 SAP bought Concur Technologies, a provider of cloud-based travel and expense management software, for $8.3 billion, SAP's most expensive purchase to that date.[30] Analysts' reactions to the purchase were mixed, with Thomas Becker of Commerzbank questioning whether Concur was the right choice for SAP, while Credit Suisse called the acquisition an "aggressive" move.[31]

On 21 May 2014, SAP AG announced during the Annual General Meeting of Shareholders that 99% of the shareholder votes approved the conversion of legal form to a European stock corporation (Societas Europaea, SE) and at the same time, elected the first supervisory board of SAP SE. The conversion of the company's legal form would take place upon entry in the commercial register, expected to be in July 2014.[32][33]

On 7 July 2014, SAP announced it had changed its legal form to a European Company (Societas Europaea, SE). As a result, its German subsidiary was renamed to SAP Deutschland SE & Co. KG.[10][34] The conversion cost the company approximately €4 million.[35] In 2014 IBM and SAP began a partnership to sell cloud-based services.[36] Likewise, in 2015, SAP also partnered with HPE to provide secure hybrid cloud-based services running the SAP platform.[37] Both HPE and IBM provide infrastructure services to SAP, and SAP runs its SAP HANA cloud solution on top. SAP has announced additional partnerships with Microsoft in order to give customers tools for data visualization, as well as improved mobile applications.[38]

In 2015, SAP exceeded its revenue projections due to the expansion in its cloud business and the success of SAP HANA. The growth can also be partially attributed to the acquisitions of Concur and Fieldglass.[39] Since 2017, SAP is a founding member of the EU Cloud Code of Conduct.[40] Since May 2021 SAP has listed selected Cloud Service adherent to the EU Cloud Code of Conduct as one of the first Cloud Service Providers.[41]

The company announced plans in 2016 to invest heavily into technology relating to the Internet of things (IoT) as part of a strategy to capitalize on the growth in that market. For that purpose, €2 billion is planned for investment in relevant sectors by the end of 2020.[42] SAP will also launch a new product line called SAP IoT, which "will combine large amounts of data from things connected to the Internet with machine learning and SAP's real-time database S/4 HANA."[42]

On 29 January 2019, SAP announced plans to cut approximately 4,000 positions at the company in a strategic plan to shift to more modern cloud-based technologies such as blockchain, quantum computing, machine learning, Internet of Things, and artificial intelligence.[43]

On 13 April 2021, SAP announced the formation of the joint venture SAP Fioneer, a dedicated Financial Services Industry (FSI) Unit between SAP and investment company Dediq GmbH.[44][45] Dediq GmbH invested over €500 million in the newly formed unit and received an 80 percent share in return. SAP brought its products, organizational units and the sales network into the business and holds 20 percent of the shares.[46]

In June 2025, it was reported that the company had reached €320bn in value and that 4 out of 5 of SAP's client operations were now managed through its cloud business at hyperscale level.[47]

Acquisitions

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Since 1991, SAP has acquired more than 70 companies.

Products

[edit]
A bus with SAPE SE wrapping highlighting data connections at the Intel Developer Forum in San Francisco

As well as its main ERP products, the company also sells database software and technology (particularly its own brand, SAP HANA) and cloud-engineered systems. It sells other ERP software products[clarification needed] such as:

Finances

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Sales by region (2023)[48]
Region share
United States 32.7%
EMEA (without Germany) 29.1%
Germany 15.8%
Asia Pacific (without Japan) 10.8%
Americas (without US) 8.2%
Japan 4.0%

For the fiscal year 2017 SAP reported earnings of €4 billion, with an annual revenue of €23.5 billion, an increase of 6.3% over the previous fiscal cycle.[49] SAP's shares traded at over US$154 per share, and its market capitalization was valued at US$180 billion in December 2023,[50] making it the largest German company by market capitalization.[51]

The key trends for SAP are (as at the financial year ending 31 March):[52][53][54]

Year Revenue
(€ bn)
Net income
(€ bn)
Total assets
(€ bn)
Employees Sources
2013 16.8 3.3 27.0 66,572
2014 17.5 3.2 38.5 74,406
2015 20.7 3.0 41.3 76,986
2016 22.0 3.6 44.2 84,183
2017 23.4 4.0 42.4 88,543
2018 24.7 4.0 51.5 96,498
2019 27.5 3.3 60.2 100,330 [55]
2020 27.3 5.1 58.4 103,876 [56]
2021 27.8 5.2 71.1 107,415
2022 30.8 2.2 72.1 111,961
2023 31.2 6.1 68.2 106,043
2024 34.2 3.1 74.1 107,155

Corporate structure and ownership

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SAP Headquarters building seen in 2012

SAP had the following ownership structure in early 2024:[57]

Shareholder name Percentage
Hasso Plattner 6.60%
BlackRock, Inc. 5.53%
Dietmar Hopp Stiftung GmbH 5.04%
SAP SE 5.01%
Capital Group Companies Inc. 3.27%
Klaus Tschira Stiftung gGmbH 3.63%
Goldman Sachs 0.39%
Free float 70.53%

SAP uses a two-tier structure of boards with an executive board and a supervisory board.[58][59] In October 2019 Jennifer Morgan and Christian Klein were appointed as co-CEOs of SAP.[60] In April 2020 it was announced that Jennifer Morgan will leave SAP and Christian Klein will continue to operate as the sole CEO, citing that the current environment of the COVID-19 recession requires "companies to take swift, determined action which is best supported by a very clear leadership structure".[61]

The majority of the company's employees are in Germany and United States. About 20,000 employees are based in Germany[62] and about 19,311 employees are based in the United States.[63][64]

45 employee representatives were elected in 2022 to the SAP SE Works Council, including 15 candidates from the Ver.di and IG Metall trade union lists. They represent 17,000 employees of Germany.[65]

Headquarters is responsible for overall management as well as core engineering activities related to product development. Worldwide customer support is not provided by the field organizations but by a unified organization called Active Global Support (AGS).[66]

The company also encourages employees to volunteer through social sabbaticals, sending teams of people to different countries to aid non-profits. SAP employees have volunteered in China, India, Brazil, and South Africa.[67]

Research and development

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SAP Labs Network consists of all major global Research & Development Hubs of SAP, across more than 20 countries and representing more than 80% of SAP’s global engineering workforce.

Major Hubs of SAP are Germany, India,[68] USA and China, and growing Hubs in East Asia, Eastern Europe, Canada and Latin America.[69]

Criticism and controversy

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Since May 2015, the company has dealt with a series of high-profile bribery investigations,[70][71][72] including one that led to them paying $3.9 million to settle U.S. Securities and Exchange Commission civil charges over a former executive's scheme to bribe Panama government officials in order to win lucrative technology contracts.[70][73]

In July 2017 allegations were made that SAP had been involved in business transactions with the controversial and politically influential Gupta family in South Africa. SAP was accused of paying CAD House, a Gupta-controlled company, R100 million in order to secure a Transnet deal. SAP denied the allegations, claiming that the money was paid as "an extension of the sales force", despite CAD House having no prior SAP experience.[71][74] The dealings of the Gupta family with SAP were revealed in a widely publicized e-mail leak.[75][76] As a consequence of the allegations SAP launched an investigation that led to four of its South African managers being placed on administrative leave along with the seizure of their mobile phones and computers.[77] Claas Kuehnemann was named as acting managing director for Africa while the investigation continued.[78] On 26 October 2017 SAP announced that it had voluntarily reported itself to the U.S. Securities and Exchange Commission (SEC) for a possible violation of US law, including the Foreign Corrupt Practices Act (FCPA), related to the South African bribery allegations. SAP's own investigation, conducted by law firm Baker McKenzie, revealed that SAP had paid $7.7 million in commissions to third-parties linked to the Gupta family while securing contracts worth $48 million with Transnet and Eskom.[79][80][81]

In 2018 and in an ongoing court battle, Teradata accused SAP of IP theft and fraudulent behaviour.[82][83] In 2021, in the German weekly news magazine Der Spiegel, additional claims were made of questionable behaviour with regards to SAP's funding of researchers at the University of Mannheim - who were in effect paid by SAP to investigate competitors technology.[82][84] In a later article, Der Spiegel magazine maintained that SAP had been neglectful in maintaining strict governance for years.[85] In June 2022 the German business magazine Manager Magazin published an article stating the management style of the leadership might be responsible for an increased compliance risk.[86]

In February 2019 SAP was accused of 'improper conduct' linked to state contracts in Kenya and Tanzania. An anonymous whistle-blower claims, through a firm of attorneys, that SAP used Twenty Third Century Systems (TTCS) to bribe officials at the Tanzania Ports Authority (TPA) to win a US$6.6 million enterprise resource planning software tender that involved the provision of software licenses and services.[72]

In 2021 SAP admitted in a United States court that it exported software to firms in Iran, contrary to US sanctions against Iran, which led to a fine of $8 million.[87][88][89]

In May 2022, multiple claims were made of bullying and sexual harassment within the company, with many cases of unwanted advances by senior male managers on female colleagues. When complaints were made or information made available, HR were found to be unhelpful or hostile. For example, in one case a female employee was groped by a male manager in Sydney while at a company event, but he was never brought to account. In another case, a female employee was sexually targeted by a manager and asked to keep her web camera on during the day. She then complained and was placed under "performance management" - a precursor to being asked to leave the company.[90] Several female executives, including the Co-CEO left the company, adding to concerns that women were negatively treated, despite SAP then hiring several other senior women from Microsoft.[91]

In 2024 after investigations by the U.S. Justice Department and the Securities and Exchange Commission, SAP was ordered to pay $220 million to resolve violations of the Foreign Corrupt Practices Act in South Africa, Indonesia, Tanzania, Malawi, Ghana, Kenya, Zimbabwe and Azerbaijan. It paid bribes to officials in state-owned enterprises to gain government contracts. It entered into a three-year deferred prosecution agreement, paying a criminal penalty of $118.8 million and an administrative forfeiture of $103,396,765.[92][93] In South Africa SAP used third-party intermediaries to acquire tenders from various state-owned entities, including Transnet, the South African Revenue Service, the City of Johannesburg, Eskom and the Department of Water and Sanitation.[94][93]: 4  In March 2024, SAP agreed to pay R500 million as part of an agreement with South Africa's Special Investigating Unit. The agreement indemnifies them against further financial claims related to the bribery, but does not absolve any parties from criminal prosecution.[95]

On September 3, 2024 it was announced that CTO and Executive Board Member Juergen Mueller reached a mutual agreement to leave the company by the end of the month due to incident of inappropriate behavior at a company event.[96][97] Following the news of this incident it was reported on September 13, 2024 that German prosecutors have opened a formal investigation of sexual harassment between him and the female employee.[98]

See also

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References

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Bibliography

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Revisions and contributorsEdit on WikipediaRead on Wikipedia
from Grokipedia

SAP SE is a German multinational software corporation headquartered in , , founded on 1 April 1972 by five former employees as Systemanalyse und Programmentwicklung, later renamed to stand for Systeme, Anwendungen und Produkte in der Datenverarbeitung (Systems, Applications, and Products in Data Processing). The company develops enterprise application software focused on (ERP) systems that integrate core business processes including , , , and . SAP has become the world's largest non-American software firm by and , serving over 440,000 customers in more than 180 countries with offerings like , an in-memory ERP platform supporting real-time and deployment, alongside innovations in AI and industry-specific modules that have driven annual revenues exceeding €31 billion. Its developments have standardized global business software for operational efficiency in large enterprises, though implementations often demand substantial customization. SAP has encountered controversies, including a $220 million settlement in 2024 for violations involving bribery in countries like and , as well as antitrust disputes, such as a 2025 U.S. court ruling allowing claims by competitor of monopolization through restrictions on third-party ERP data access to proceed.

History

Founding and Early Development

SAP was founded on April 1, 1972, by five former employees—Dietmar , Hasso , Claus , Klaus , and Hans-Werner Hector—as Systemanalyse und Programmentwicklung (Systems Analysis and Program Development), abbreviated SAP. The founders sought to create standardized software for real-time data processing, moving beyond batch methods, with initial headquarters in , , and an office in . Early efforts produced integrated business applications, starting with a materials, information, and accounting system (MIAS) in 1972 for the German subsidiary of (ICI). In 1973, SAP launched its first financial accounting module (RF), laying the groundwork for SAP R/1, a real-time system with modular design for flexible enterprise resource management. Unlike batch processing on mainframes, R/1 enabled immediate data handling. By 1974, the company had 40 reference customers, such as Burda and Linde, and added a purchasing module; in 1975, it introduced the materials management system (RM) and completed its first international installation in Switzerland. SAP formalized as SAP GmbH in 1976, with 25 employees and DM 3.81 million in revenue. Operations moved to in 1977, where the company held its first customer events. In 1978, development of R/2 began—a second-generation mainframe system integrating , , and —as staff grew to 60. By 1980, with about 80 employees, SAP occupied its first dedicated building in Walldorf, though co-founder Claus Wellenreuther left that year. These innovations established SAP as a leader in real-time , setting the stage for 1980s expansion.

Global Expansion and Standardization

SAP's initial foray into international markets occurred in 1975, when it installed its software for the first time outside at Swiss customers Coop and Georg Fischer, marking the beginning of its global presence. By 1982, over 250 companies in , , and deployed SAP software. This European focus expanded with the establishment of its first international subsidiary, SAP (Schweiz) AG, and SAP (International) AG in Biel, , in 1984, aimed at boosting sales abroad. The late 1980s saw accelerated expansion, with subsidiaries opened in (1986), followed by , the , , and the (1987), and , , , and the (1988). In 1989, SAP entered with a subsidiary in , alongside outposts in and , managing 12 international subsidiaries through SAP (International) AG; revenues approached DM370 million across 15 countries that year. By 1991, SAP had customers in 31 countries and 14 international subsidiaries, with operations extending to (Beijing, , ) and ( subsidiary) by 1994. The launch of in 1992 was pivotal for both expansion and standardization, as its client-server architecture enabled scalable, multiplatform deployment, supporting standardized business processes across global enterprises and smoothing integration into a globalized . R/3's modular design, initially prototyped for and on UNIX systems, promoted uniform practices by emphasizing configurable best-of-breed processes over bespoke customizations, facilitating multinational consistency in operations like and finance. This propelled rapid adoption, with major clients such as running global operations on R/3 by 1994 (its largest contract at the time), implementing it in 1996, and 81% of 1997 revenues (DM6.02 billion) derived from outside ; by 2000, SAP operated in over 50 countries with a exceeding 24,000.

Shift to Cloud and Digital Innovation

In the mid-2010s, SAP shifted from on-premise ERP systems to cloud-native architectures to improve scalability, real-time analytics, and IT efficiency. The launch of on February 3, 2015, at the marked a key milestone, offering an ERP suite powered by the in-memory database. This design removed redundant aggregate tables from systems like ECC, enabling instant data processing in , , and operations. The change countered criticisms of legacy software's rigidity and costs, helping SAP compete with cloud providers like and Workday. SAP extended S/4HANA to cloud editions, starting with public cloud access in March 2016 for subscription-based updates without hardware needs. By , the RISE with SAP program bundled S/4HANA Cloud, process intelligence, and infrastructure from partners like AWS and to aid migrations from ECC, which ends support in 2027. This reflected a move from on-premise dominance—over 90% of installations—to hybrid and public models, driven by needs for remote access and integrations. Cloud revenue rose from a small share in 2015 to 58% of total sales by Q3 2025, with 27% year-over-year growth in that quarter contributing to €9.01 billion overall. SAP also integrated advanced technologies into its applications for digital innovation, including and AI for and . SAP Leonardo, launched around 2017, added IoT, , and tools for applications like supply chain and fraud detection, with blockchain co-innovation for asset tracking. Later, generative AI via the Joule copilot was embedded in S/4HANA and the Business Technology Platform for tasks such as contract analysis and demand forecasting, boosting S/4HANA Cloud growth over 90% in years like 2022. These features met demands for , though challenges included data privacy and legacy system integration.

Corporate Structure and Governance

Leadership and Organizational Hierarchy

SAP SE follows a two-tier governance structure under German law, featuring an Executive Board for operations and strategy execution, overseen by a Supervisory Board that appoints, supervises, and advises it. The Executive Board consists of six members as of 2025 and is led by CEO Christian Klein, who directs overall strategy, financial performance, and global operations. Klein joined the board in 2018, served as co-CEO from October 2019, and became sole CEO in April 2020. Other board members include Muhammad Alam (Product & Engineering); Dominik Asam ( since 2024); Thomas Saueressig (Technology & Innovation); Sebastian Steinhaeuser (Customer Operations); and Gina Vargiu-Breuer (, , Real Estate). In January 2025, SAP created an Extended Executive Board to advance AI-first and suite-first priorities, adding leaders from areas like Strategy & Operations who report to Klein but lack voting rights. This setup centralizes decisions while delegating across regions, product lines, and units such as cloud services and analytics. The , comprising 16 members including employee representatives, reviews Executive Board reports on performance, , and compliance. Chaired by Pekka Ala-Pietilä since 2021, with Lars Lamadé as deputy and independents like and Prof. Dr. Ralf Herbrich, it balances shareholder needs with strategic guidance and has approved investments in cloud migration and AI since 2020 to support long-term .

Ownership and Shareholder Dynamics

SAP SE maintains a stable, dispersed ownership structure with a free float of 83.8% as of December 31, 2024, excluding and strategic investments. Its total issued consists of 1,228,504,232 no-par value shares. This high free float reflects consistent broad participation by institutional and public investors, without dominant controlling interests. Founding shareholders and affiliates hold approximately 12-15% through direct and indirect stakes, aligning with long-term and innovation goals. , co-founder and chairman emeritus, owns about 6.2% (76 million shares) as of early 2024. , another co-founder, holds 5.33% personally (62,103,267 shares), plus 5.37% (62,548,065 shares) via Dietmar Hopp Stiftung , totaling over 10%. Periodic sales have occurred, such as Plattner's partial of up to 60% of a 1.46 million share block in 2023. Institutional investors lead the free float, with BlackRock, Inc. at 6.92% (80,647,548 shares), followed by and Capital Research & Management Co. Overall institutional stands at 6-7%, indicating diversified global exposure without concentrated activist influence. Dynamics remain subdued, with minor insider transactions—like 2,358 shares sold by Lars Lamade in April 2025—having negligible impact. SAP's includes a proposed €2.35 per share for fiscal 2024 (up €0.15), bolstering alongside over 40% total shareholder return in the past year. This balance ensures predictability, absent contentious proxy battles or ownership challenges in recent filings.

Products and Solutions

Core Enterprise Resource Planning Systems

SAP's core enterprise resource planning (ERP) systems integrate finance, human resources, manufacturing, supply chain, and procurement into a unified platform for real-time operational management. Originating from financial and inventory modules in the 1970s, these systems evolved into comprehensive ERP solutions that standardized enterprise data processing. The foundational system, , launched on July 6, 1992, with a client-server architecture enabling multi-platform compatibility, real-time processing, and beyond the mainframe limits of predecessors like R/2. It supported modular applications for , , and , gaining rapid adoption through global standardization and exceeding 1,000 installations shortly after release. R/3 established SAP's ERP dominance, with enhancements continuing via versions like R/3 Enterprise into the mid-2000s. SAP ERP, extending R/3, reached version 6.0 in 2006, incorporating for improved integration and flexibility; its final enhancement arrived in 2016. The current core, , debuted February 3, 2015, optimized for the in-memory database to eliminate aggregate tables and simplify data models for accelerated analytics and decisions. S/4HANA delivers real-time transactions and insights, with embedded AI supporting automation, , and optimization in finance, sales, and modules. S/4HANA offers on-premises, public cloud, and private cloud deployments, including a 2025 private edition focused on seamless and AI-driven governance. As SAP's digital core, it manages end-to-end operations for over 25,000 customers, cutting complexity by up to 50% versus legacy ECC systems via intelligent technologies and preconfigured industry processes. ECC maintenance ends in 2027, prompting migrations to S/4HANA for ongoing innovation.

Cloud-Based and SaaS Offerings

SAP accelerated its shift to cloud-based and SaaS models in the late 2000s, launching SAP Business ByDesign in 2007—a fully hosted, multi-tenant ERP aimed at midmarket companies. Adoption grew substantially in the 2010s through acquisitions such as SuccessFactors in 2011 for human capital management and Ariba in 2012 for procurement, alongside native cloud developments. By 2021, RISE with SAP bundled ERP, database, and infrastructure services to support hybrid and full-cloud deployments. Central to SAP's SaaS offerings is SAP S/4HANA Cloud, a next-generation ERP system on the in-memory HANA database. Announced in February 2015 and released in cloud edition by May, it enables real-time analytics, simplified data models, and automated processes in finance, supply chain, and sales. The public edition provides multi-tenant SaaS with biannual updates, embedded AI, machine learning, and industry extensions, reducing customization compared to on-premises versions. SAP SuccessFactors delivers cloud HR management, covering core HR, talent acquisition, performance, and payroll for over 100 million users via web and mobile. SAP Ariba handles end-to-end procurement, linking buyers and suppliers in a network processing trillions in annual transactions, with AI insights for sourcing, contracts, invoicing, and compliance. SAP Concur, acquired in 2014, manages expenses and travel, integrating with ERP for real-time compliance and analytics. These solutions feature subscription pricing, scalability, and integration via SAP's Business Technology Platform, though critics highlight higher migration costs from legacy systems and ecosystem dependency. As of 2024, cloud revenue represents a growing share of SAP's business, emphasizing agility over perpetual licenses.

Analytics, AI, and Industry-Specific Modules

SAP Analytics Cloud, launched in November 2015 as SAP Cloud for Analytics, unifies , planning, and in a cloud platform. It enables data visualization, augmented analytics, and collaborative planning, with quarterly updates adding AI-driven insights and integration with SAP Datasphere for . These features support real-time analytics and scenario modeling on large datasets, forecasting outcomes from historical patterns with minimal custom coding. SAP embeds , including and generative AI, via SAP Business AI in processes like and within . Joule, an AI copilot announced in May 2024, aids users across applications by querying data, automating workflows, and delivering insights through interfaces tailored to enterprise contexts. SAP AI Core manages AI model lifecycles, from training to deployment on the Business Technology Platform, enabling automated via ML-analyzed transactions. SAP offers over 27 industry-specific solutions extending its ERP core, addressing needs like in healthcare and in with embedded AI for and customer personalization. Examples include SAP for Retail's demand-sensing for management and oil, gas, and energy solutions integrating IoT for asset analytics. SAP also hosts annual Aerospace & Defense Innovation Days events to showcase innovations for the sector, with the 10th edition held March 31–April 2, 2025, at the Omni San Diego Hotel in San Diego, California, and the 11th scheduled for March 9–11, 2026, at the JW Marriott Marco Island Beach Resort in Marco Island, Florida. In S/4HANA, extensions customize processes, such as batch and in life sciences, using to reduce compliance risks without core modifications.

Acquisitions and Strategic Growth

Major Historical Acquisitions

SAP's strategy of acquisitions has been instrumental in expanding its capabilities beyond core systems into , mobility, management, procurement, and services, with several multi-billion-dollar deals marking pivotal shifts in the company's portfolio during the and early . These moves addressed gaps in organic development, particularly in emerging technologies like and SaaS, enabling SAP to compete more effectively in diversified markets. In 2008, SAP completed the acquisition of Business Objects, a leading provider of and enterprise performance management software, which positioned SAP as a market leader in these areas and integrated advanced reporting tools into its ecosystem. The deal, announced in October 2007 for approximately €4.8 billion (about $6.8 billion), represented one of SAP's largest early investments in analytics capabilities. The 2010 acquisition of Sybase for $5.8 billion enhanced SAP's mobile and database technologies, allowing it to extend business applications to mobile users and strengthen in-memory computing foundations that later supported innovations like . SAP acquired SuccessFactors at the end of 2011 for €2.5 billion (approximately $3.4 billion), gaining a cloud-based management platform that accelerated its transition to SaaS offerings and expanded its software footprint. In 2012, SAP purchased Ariba for $4.3 billion, incorporating a cloud-based supplier network and solutions that bolstered its and end-to-end spend management capabilities. The 2014 acquisition of Concur for $8.3 billion, SAP's largest to date at the time, integrated travel and into its portfolio, targeting the $1.2 trillion market and reinforcing its business network strategy.
AcquisitionDate CompletedCost (USD)Key Focus Area
Business Objects2008~$6.8BBusiness intelligence
Sybase2010$5.8BMobility and databases
SuccessFactors2011~$3.4BCloud HCM
Ariba2012$4.3B and supplier networks
Concur2014$8.3BTravel and expense management

Recent Acquisitions and Their Impacts

In 2023, SAP acquired LeanIX, a provider of enterprise architecture management software, to strengthen business process modeling and IT landscape visualization. This integrated LeanIX's capabilities with SAP Signavio, aiding alignment of IT strategies with business goals via improved data governance and transformation planning. The acquisition advanced SAP's intelligent enterprise architectures, despite challenges in aligning LeanIX's agile tools with SAP's ERP ecosystem. SAP acquired WalkMe, a digital adoption platform, on September 12, 2024, for about $1.5 billion. WalkMe's in-app guidance and analytics reduce onboarding times and enhance adoption of SAP's cloud solutions, such as S/4HANA. Early integration into SuccessFactors showed potential productivity gains of up to 30% in pilots, though full benefits hinge on API compatibility and data privacy adherence. On September 12, 2025, SAP completed its acquisition of SmartRecruiters, an AI-driven talent acquisition platform announced in August 2025. This expanded SAP's human capital management by adding machine learning for candidate sourcing and workflows, integrating with SuccessFactors to optimize talent processes. It targets tech talent shortages with predictive hiring and cross-selling to SAP's customer base, balancing innovation gains against risks of cultural integration between startup and enterprise operations. These moves have boosted SAP's cloud HR and analytics revenue by 15-20% year-over-year in key areas, enhancing competitiveness against Oracle and Workday through focused innovation.

Research, Development, and Innovation

R&D Investments and Global Labs

SAP allocates a substantial portion of its budget to research and development, with expenses reaching €6,514 million in 2024, marking a 3% increase from €6,324 million in 2023. This represented 19.1% of total revenue under IFRS accounting, down from 20.3% the previous year, reflecting a strategic emphasis on innovation amid revenue growth. The company's R&D efforts employ approximately 37,909 full-time equivalents as of September 2025, focusing on advancements in cloud computing, AI, and enterprise analytics. The SAP Labs Network forms the backbone of these activities, encompassing major global research and development hubs across more than 20 countries and accounting for over 80% of SAP's worldwide development workforce. Primary locations include the headquarters in , ; development centers in , ; multiple sites in the United States such as , and ; Bengaluru and Hyderabad in ; , Waterloo, and in ; in ; and facilities in China. These labs collaborate on product , with serving as one of the largest centers for global product distribution. In August 2025, SAP announced an investment exceeding €150 million to establish a new R&D hub in , , aimed at enhancing capabilities in AI, supply chain technologies, and regional innovation, joining its Southeast Asian operations. This expansion underscores SAP's strategy to tap into emerging talent pools while maintaining a decentralized model that leverages local expertise for global software solutions.

Key Technological Breakthroughs

SAP R/3, released in 1992, advanced with a client-server enabling processing across platforms and global standardization of business processes. Unlike mainframe-based R/2, it supported modular, scalable integrations of functions like , , and , aiding multinational operations and minimizing data silos. SAP HANA, an platform, debuted for customers in late 2010 and widely in 2011. Its columnar storage and enabled real-time analytics and , accelerating from weeks to seconds by bypassing disk I/O. This foundation powered later applications with predictive modeling and operational intelligence, obviating separate data warehouses. Launched February 3, 2015, SAP S/4HANA embedded HANA into ERP, simplifying data models via structures like the Universal Journal for unified financial reporting. It featured embedded analytics for instant insights, removed aggregate tables for quicker queries, and introduced SAP Fiori for role-based interfaces. These reduced deployment complexity, sped decision-making, and enabled , establishing S/4HANA as a ERP.

Financial Performance

SAP's revenue has shown steady growth over the past decade, accelerating due to the shift to -based offerings since 2020. Annual revenue reached €31.2 billion in 2023 and €33.8 billion in 2024, yielding a compound annual growth rate of 4-5% from 2020 amid supply chain disruptions and inflation. Growth strengthened in 2025, with first-nine-months revenue at €26.5 billion (up 9% year-over-year), driven by 25% cloud revenue growth to €14.2 billion. Cloud backlog reached €18.84 billion as of September 2025 (up 27% at constant currencies), indicating strong future potential from subscriptions.
YearTotal Revenue (€ billion)Cloud Revenue Growth (YoY %)Notes
202027.3N/APre-cloud acceleration baseline.
202127.8~10Initial recovery.
202231.215Hybrid model expansion.
202331.220Stagnant total due to license decline offset by .
202433.825 overtakes legacy segments.
2025 (proj.)36-3721-22 (full year est.)Low-end cloud guidance amid trade uncertainties.
Profitability has risen in parallel, as operating margins expanded from cloud gross margins near 75% versus traditional licenses. Q3 2025 saw IFRS operating profit increase 12% to €2.5 billion on €9.08 billion revenue, with non-IFRS profit up 19% to €2.6 billion due to cost efficiencies and scalable cloud economics. Full-year 2025 guidance for profit and free cash flow was raised, aiming for non-IFRS margins over 30%, despite Q3 revenue missing estimates from weaker non-cloud segments and headwinds. This reflects SAP's pivot from one-time license fees (now under 5% of revenue) to recurring cloud subscriptions (over 40% of total), which enhance predictable cash flows—reaching 87% predictable revenue in Q3 2025. Profitability, however, stays vulnerable to implementation cycles and currency shifts.

Market Valuation and Economic Influence

As of October 2025, SAP SE's market capitalization reached approximately $315 billion USD, ranking it among the world's top 40 most valuable companies by market value. This valuation reflects investor confidence in its enterprise resource planning (ERP) dominance and cloud transition, though shares experienced volatility after the Q3 2025 earnings report missed revenue expectations amid global trade uncertainties. Key metrics included a trailing price-to-earnings (P/E) ratio of 41.67 and a forward P/E of 33.11. SAP generated fiscal year 2024 non-IFRS revenue of €34 billion, with Q3 2025 revenue at €9.08 billion, up 7% year-over-year (11% at constant currencies), driven by 22% cloud revenue growth to €5.29 billion. It projects 2025 cloud revenue toward the lower end of €21.6–21.9 billion amid macroeconomic headwinds. The company employs over 110,000 people from more than 157 countries. SAP influences global business operations, with its solutions adopted by enterprises generating trillions in collective revenue and supporting over 230 million cloud users across functions like finance, procurement, and supply chain management. S/4HANA implementations have been associated with efficiency gains, cost reductions, and improved decision-making through streamlined processes and data-driven insights. SAP supports productivity improvements worldwide by enabling resilient supply chains and AI transformations, though its growth is constrained by enterprise spending cycles and geopolitical risks.

Market Position and Competitive Landscape

Global Market Share and Adoption

SAP holds a prominent position in the global (ERP) software market, though competitive dynamics have shifted recently. The worldwide ERP market reached $66 billion in 2024, up 11.3% from the prior year, with management as the fastest-growing segment at 13.0%. SAP historically led in enterprise applications but was overtaken by as the top ERP provider in 2024, with Oracle holding 6.63% share amid rising cloud adoption; the top 10 vendors accounted for 26.5% of the $135.9 billion global ERP software market. SAP's adoption remains strong among large enterprises, serving over 425,000 customers in more than 180 countries as of 2025, including most firms. It maintains the largest ERP customer base, with around 42,000 buyers—more than four times Oracle's—demonstrating entrenchment in core operations for industries like manufacturing, retail, and . This scale enables annual processing of over $800 billion in customer transactions, underscoring SAP's infrastructural role despite market fragmentation. Migration to platforms like S/4HANA highlights adoption hurdles. Of about 35,000 legacy ECC customers, only 15% had transitioned by late 2024, with forecasting that nearly half—around 17,000—may extend use beyond 2027 support deadlines owing to implementation complexities. Cloud ERP, projected to grow from $87.73 billion in 2024 to $172.74 billion by 2029 at a 14.5% CAGR, benefits agile adopters but emphasizes SAP's dependence on upgrading its base amid vendor transitions.

Competitors and Strategic Differentiators

SAP competes in the () sector mainly with and , while Workday challenges in management and finance. As of 2024, Oracle leads by revenue share at 6.63% versus SAP, driven by cloud growth and AI integrations. Microsoft Dynamics excels in adoption, with 25.74% of ERP customers, aided by ecosystem ties like 365. Workday holds 11.42% in certain categories, and serves mid-market niches, though neither matches SAP's scope in large global enterprises. SAP differentiates through its integrated ERP suite, including S/4HANA with in-memory HANA technology for real-time and , handling vast data with low latency. This approach contrasts Oracle's flexible but integration-heavy modules and Microsoft Dynamics' intuitive cloud tools for smaller operations. SAP's industry depth in manufacturing, consumer products, and provides pre-built processes that minimize customization and speed for complex multinationals. SAP bolsters its edge in 2025 via AI in over 70% of S/4HANA updates for predictive forecasting and automation, anchoring the "intelligent enterprise" that merges ERP, analytics, and IoT. RISE with SAP eases cloud shifts from legacy systems amid cybersecurity and compliance pressures, supported by an extensive partner network for worldwide deployments unmatched by competitors. The strength of this ecosystem is reflected in the 2025 Partner Excellence Awards: regional awards announced in March recognized excellence in sales, innovation, technology, and services across regions including MEE, LAC, North America, EMEA, and APJ, while global Line of Business awards in September focused on HCM, Customer Experience, Spend Management, and Supply Chain Management. Winners and finalists included Accenture (e.g., Sales Success – Large Enterprise), Deloitte (e.g., Delivery Quality, Business AI adoption), NTT DATA (e.g., Indirect Sales, Business AI), EPI-USE, OpenText, Coveo, BlackLine, and DSC Software AG; awards are category- and region-specific based on performance data, without overall numerical rankings or global leaderboards, emphasizing cloud growth, innovation, and customer success. These elements maintain SAP's draw for clients despite share challenges, reflected in ongoing revenue from its 106,000-customer HCM segment.

Controversies and Criticisms

Bribery Scandals and Compliance Failures

In January 2024, SAP SE agreed to pay over $220 million to settle U.S. Department of Justice (DOJ) and Securities and Exchange Commission (SEC) investigations into (FCPA) violations by its subsidiaries. These stemmed from schemes from 2009 to 2018 in seven countries, including , , , , , , and . The schemes involved $19.8 million in bribes to government officials, disguised as commissions to third-party agents without legitimate business purposes, to secure public sector contracts worth over €226 million. Under a DOJ deferred prosecution agreement, SAP paid a $118.8 million criminal penalty and $103.4 million in forfeiture, with up to $55.1 million creditable against South African payments for overlapping conduct. The SEC added nearly $100 million in disgorgement, interest, and penalties, citing inadequate internal controls and inaccurate recording of bribes as expenses. Misconduct was most extensive in South Africa, where from 2014 to 2016, subsidiaries paid over $11 million in bribes to officials at state-owned entities like Holdings SOC Ltd. and SOC Ltd., securing €53.7 million in contracts. Payments flowed through politically connected resellers, including those tied to the during allegations under former President , though the resolution emphasized SAP's practices. In other African countries and in Indonesia and Azerbaijan, similar bribes to officials facilitated software license and maintenance deals exceeding €100 million, often without on intermediaries. SAP's failures included poor oversight of third-party agents, insufficient due diligence, and inadequate FCPA , despite claims of strong programs. This followed a 2016 SEC charge for books-and-records and controls violations in a Panama bribery scheme involving $219,000 in improper payments via a slush fund to win a $14.2 million contract, settled for $3.75 million without admitting liability. Post-2024, SAP appointed a three-year compliance monitor, enhanced third-party assessments, and clawed back executive compensation, aiding a partial fine reduction. The company accepted responsibility and implemented reforms, though critics observed persistence despite prior warnings.

Antitrust Disputes and Business Practices

On September 25, 2025, the European Commission launched a formal antitrust investigation into SAP, probing whether its aftermarket support and maintenance for on-premise ERP software breaches EU competition rules. The inquiry targets allegations that SAP's licensing policies restrict third-party providers, locking customers into costly proprietary services that equal about 22% of perpetual license fees annually. SAP offered concessions in September 2025 to resolve earlier concerns from 2022, but regulators advanced due to potential market foreclosure risks. Violations could incur fines up to 10% of global turnover, though SAP asserts compliance and expects minimal impact. Critics accuse SAP of fostering through mandatory support contracts and licensing that charges extra for indirect data access. Its transition from perpetual licenses to subscriptions, including pushes for RISE with SAP migrations from ECC to S/4HANA, often overlooks high implementation costs and complexities. Partnerships with integrators have drawn claims of scope inflation and misleading sales prioritizing revenue over results, such as surprise upgrades and fee hikes. SAP views these as essential shifts to cloud efficiency, while negotiators contend they leverage dominance in markets for undue premiums. SAP has avoided antitrust fines from this or earlier reviews, unlike in comparable EU matters, amid U.S. and German suits over ERP terms. The probe's resolution could shape global software maintenance norms, possibly mandating decoupled support to facilitate third-party options.

Implementation Challenges and Security Vulnerabilities

Implementing SAP ERP systems like SAP R/3 and S/4HANA often faces hurdles from their complexity, leading to delays, budget overruns, and disruptions. Key issues include poor change management, data migration errors, and mismatches between legacy processes and standardized workflows, which can extend projects from months to years and increase costs by 50-200%. Notable failures include Hershey's 1999 rollout, rushed for Y2K compliance, which disrupted holiday orders and caused over $100 million in losses plus a 19% stock drop; Waste Management's 2008 project, based on a prototype, prompted a $100 million lawsuit and $256 million write-off; and SPAR Group's early 2020s $100 million effort, undermined by inadequate change management and shifting requirements, leading to inefficiencies. British Petroleum's initiative, initially budgeted at $120 million, escalated to $600 million due to scope creep and global integration problems. These cases highlight underestimation of customization, insufficient training, and lack of process reengineering. Consulting data shows up to 70% of ERP projects overrun budgets, with failures costing tens of millions, often due to overlooked site-specific factors despite vendor ROI claims. SAP systems also face security risks from expansive attack surfaces, including unpatched components and misconfigurations that expose sensitive data. Vulnerabilities like weak authorizations and exposed Remote Function Call interfaces enable privilege escalation and data exfiltration without regular audits. SAP releases monthly Security Notes patching dozens of flaws quarterly, but delays persist; 2023 assessments noted missing hotfixes and poor password policies as ongoing threats. Exploits include the September 2025 attacks on CVE-2025-42957, a CVSS 9.9 command injection in S/4HANA allowing full compromise despite an August patch, alongside NetWeaver flaws causing breaches like a 2025 manufacturer data leak. Other threats involve hidden OK codes and authorization overflows in legacy ABAP code. Mitigation demands proactive vulnerability management, as SAP's proprietary design hinders third-party tools, with enterprise breaches averaging $4.5 million.

Workplace Issues and Ethical Concerns

In 2022, two female employees at SE reported to that they had been raped by colleagues at separate company work events within 18 months. They alleged HR mishandled their complaints by failing to investigate thoroughly or impose disciplinary actions. One victim, Ashley Kostial, broke a nondisclosure agreement—signed under pressure—to publicly detail the assault and SAP's response, claiming the company prioritized silence over accountability. SAP has faced accusations of inadequate handling of . A December 2024 Bloomberg report described how a manager in its unit was promoted despite complaints from female subordinates about , discriminatory remarks, and inappropriate advances, with internal probes yielding no sanctions. While the company maintains a zero-tolerance policy for and , critics argue cultural issues persist, including networking events with excessive alcohol that enable advances by senior male managers. Multiple discrimination lawsuits have raised further concerns. In March 2024, a U.S. whistleblower sued SAP for age and retaliation after being reassigned following his request for an investigation into biases favoring younger hires. Other cases include a 2021 federal suit by Xuan Lu alleging against SAP America, as well as earlier claims of bias-related retaliation; many such suits have been dismissed or settled without admitting liability. Employee discontent has also emerged over labor policies. In 2024, thousands of SAP staff signed an internal petition criticizing mandatory return-to-office requirements as inflexible and harmful to work-life balance. SAP's due diligence program emphasizes anti-discrimination and safe workplaces, yet recurring allegations indicate gaps between policy and practice.

References

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