The history of SAP starts in the modest town of Weinheim in Southwest Germany in 1972. Up to that point, the town of Weinheim’s was known for its late Bronze age archeology, medieval castles and its fine leather workers and manufacturers. It is a testament to the leaders of SAP who figuratively brought the small town of Weinheim into the modern age with their company.
Before you take a trip down memory lane, discover this solution that’ll simplify your SAP workflow and cut costs in the present.
1972 – 1980 The Early History of SAP
As Xerox prepared to exit the computer industry they tasked IBM with migrating their business systems to IBM technology. In addition to the $80,000 fee, IBM was granted rights to the company Scientific Data Systems, an American company that as the time was owned by Xerox. While this technology was being acquired by IBM five engineers Dietmar Hopp, Klaus Tschira, Hans-Werner Hector, Hasso Plattner, and Claus Wellenreuther, who were working on their own solution based on this system, were told that would no longer be necessary.
The history of SAP could have ended right there, but rather than give up the 5 men decided to leave IBM and create their own company. The company was called Systemanalyse und Programmentwicklung (“System Analysis and Program Development”) or SAP for short. They began developing payroll and accounting programs for the German branch of Imperial Chemical Industries. Their first innovation starts here. It might not seem like much but hosting the information locally instead of on punch cards meant that information could be transferred in real time. It also meant that this system could be sold to other interested companies.
That first year SAP employed 9 people and generated DM 620,000 in revenue.
1981 – 1990 Growth and expansion
By 1979, SAP had launched SAP R/2 which expanded on the early capabilities of their software and moved into material management and production planning. In 1982 as the SAP customer base topped 250 the company turned 10 years old, outgrew its headquarters and generated DM 24 million while hitting the 100 employee mark. A shakeup at the top with the departure of Claus Wellenreuther could not destabilize the company as Heraeus of Hanau, Germany, became the first customer to install SAP’s RM-PPS module for production planning and control. The amazing growth of SAP meant that employees in 1985 now had access to a full 64MB of memory in enhancing SAP software. It is at this time that the international office in Switzerland as for the first time in the History of SAP the focus shifted to international business. These offices grew and by 1987 SAP offices opened in The Netherlands, France, Great Britain, and Spain.
In 1988 after 14 years of hard work SAP goes public and Dow Chemicals became the 1,000th customer.
As communism and the Berlin wall fell in 1990 SAP used this to expand into Berlin and Eastern Germany.
1991 -2000 The Era of SAP R/3
Capitalizing off of the fall of the “Iron Curtain” SAP began partnerships with Russian software companies to add to its nearly 2,200 customer base in over 30 countries. In 1992 as the history of SAP entered its 20th year the company opened a new sales and development center in Walldorf Germany. The amazing international expansion of the company hit a milestone as they began to partner with Microsoft while constructing a development center in Foster City California. In 1994 expansion into Asia started in China, while a subsidiary is opened in Mexico City. IBM began using SAP R/3 to manage its global business processes.
Dietmar Hopp and Klaus Tschira, two of SAP’s co-founders, announced in 1998 of their decision to resign from the company’s Executive Board. Both made the transition to the SAP Supervisory Board, where Hopp took over as chairman. Meanwhile, the Supervisory Board named Henning Kagermann co-CEO of the company alongside co-founder Hasso Plattner.
At the dawn of the new millennium, SAP was the world’s largest provider of e-business software.
The New Millennium and the Future
At this point in the history of SAP, we know about the innovations in Cloud computing. The company continues to grow and it is a testament to its leader’s vision and remarkable work ethic and skill that the company is still as unique, profitable and forward thinking as it has been for the past 44 years.