4. 1.1 Introduction
• About SAP:
• SAP, started in 1972 by 5 former IBM employees in
Germany, it is the world's largest inter-enterprise software
company and world's 3rd largest
independent software supplier, after Microsoft & Oracle.
• The original name for SAP was German:
Systeme, Anwendungen, Produkte, German for "Systems
Applications and Products.―
• The original SAP idea was to provide customers with the
ability to interact with a common corporate database for a
5. 1.2 Introduction
Vision and Mission:
SAP’s vision is to help the world run better and improve
people’s lives.
SAP’s mission is to help every customer become a best-
run business.
Ambition – 2015
Double our addressable market to US$230 billion.
Generate €20 billion in annual revenue.
Reach 1 billion users.
Generate €2 bn in the cloud business.
Become the fastest growing database company.
7. SAP Key People
Name Executive Office
Hasso Plattner Co-CEO, Co-Chairman and Co-Founder
Henning Kagermann Co-CEO, Co-Chairman and Co-Founder
Werner Brandt CFO
Claus E. Heinrich Executive Board, Human Resources,
Industry Solutions Development, and
mySAP.com
Peter Zencke Executive Board, Industry Solutions,
Customer Relationship Management, E-
Business and Global Research
Gerhard Oswald Executive Board, Information Technology
Infrastructure
Deiter Matheis Extended Management Board
Wolfgang Kemna Extended Management Board, Americas;
CEO, SAP America
Leslie Hayman Extended Management Board, Asia-Pacific
Leo Apotheker Extended Management Board, Europe,
Middle East, and Asia
Erwin Gunst Extended Management Board, Germany and
Switzerland
Karl-Heinz Hess Extended Management Board, Technology
9. 2.1 History
SAP AG was founded in 1972 by five German engineers with
IBM in Weinheim, Germany;
Founders—
– Hasso Plattner,
– Dietmar Hopp,
– Klaus Tschira,
– Hans Werner Hector
10. 2.2 History
When an IBM client asked IBM to provide enterprise-wide
software to run on its mainframe
The five began writing the program only to be told the
assignment was being transferred to another unit
Rather than abandon the project altogether, they left IBM and
founded SAP
11. 2.3 History
Without the benefit of loans from banks, venture capitalists, or the
German government, SAP began fashioning its software business
gradually through the cash flow generated by an growing stable of
customers
Development of R/1:
Working at night on borrowed computers, Plattner and
colleagues built SAP's client list, beginning with a German
subsidiary of the global chemical company ICI and later
adding Siemens and BMW.
12. 2.4 History
R/2 in the Late 1970s
In 1978 SAP began developing, and the following year
released, R/2 (R for "real-time"), a mainframe-
based, standard business software suite modules for:
Accounting,
Sales and Distribution
Production
Enabled customers to consolidate their financial and
operational data into a single database and reducing costs
13. 2.5 History
Introduction of R/3 in the 1990s
R/3 had been launched with the expectation that it would
complement R/2's multinational-oriented niche by
extending SAP's reach into the mid-sized, less mainframe-
dominated business software market
R/3's release coincided with a growing trend toward
corporate downsizing, and even SAP's largest customers
began eyeing R/3 as a less labour-intensive replacement
for R/2
As a result, in the space of one year (1992-93), the
percentage of SAP America's total revenue generated by
R/3 catapulted from five to 80 percent
R/2's status as SAP's flagship product dwindled from 95
percent of revenues to only 20 percent.
14. 2.6 History
Foreign Markets in the 1990s
SAP's sales to German companies had fallen to 37%
North American sales accounted for one-third of all
revenues;
Asia-Pacific market was expected to reach the same level
by the year 2000.
In 1996 SAP relocated most of its marketing operation to
its Wayne, Pennsylvania, complex.
Between 1992 and 1996, it opened subsidiaries in South
Africa, Malaysia, Japan, the Czech
Republic, Russia, China, and Mexico among others
R/3 was available in 14 foreign languages including
Russian, Mandarin Chinese, and Thai.
16. 3.1 Current
Today SAP is
The 3rd largest independent software supplier in the world
12 million users,
121,000 installations worldwide,
More than 1,500 SAP partners, over 25 industry-specific business
solutions, and more than
41,200 customers in 120 countries.
The firm is now committed to moving towards a full service oriented
architecture (SOA) with underlying Net weaver integration platform
and is aiming to move down into the mid-market user base with its
long-awaited software as a service (SaaS) push through its recent
Business Bydesign announcement.
19. 4.2 Business Model
Business Process Applications
Customer Relationship Management
Enterprise Asset Management
Enterprise Resource Planning
Financial Management
Human Capital Management
Procurement
Product Lifecycle Management
Supply Chain Management
Sustainability
20. 4.3 Business Model
Business Analytics
Analytic Applications
Business Intelligence
Data Warehousing
Enterprise Information Management
Enterprise Performance Management
Governance, Risk and Compliance
21. 4.4 Business Model
Technology
Application Foundation/Integration
In-Memory Computing
Enterprise Mobility
On-Demand Platform
FA Payrol
Market HR l
ing Treas
GL ury
Shop AP
Floor
Purchasi
Sales PP
ng
AR
Mfg. Plants
23. 5.1 Competitors
SAP vs Oracle:
23rd Nov’10: Oracle sued SAP, alleging that SAP had
engaged in copyright infringement by downloading
thousands of copyrighted documents and programs from
Oracle's Customer Connection website.
SAP admitted that its subsidiary Tomorrow Now had
infringed Oracle's copyrights and a jury awarded Oracle
record-high damages in the amount of $1.3 billion.
24. 5.2 Competitors
SAP vs Oracle (Continued)
The rivalry is heating up even more following SAP CTO
Vishal Sikka’s recent comments that SAP plans to support
its flagship Business Suite ERP software on its HANA in-
memory database platform by the end of 2012.
Industry observers see this as a move to entice companies
to choose HANA over Oracle databases.
26. 6.1 Clients
Indian Clients
• Bajaj Auto Ltd. • Aarti Industries
• Dabur India Ltd. • ABB India
• Haldia
Petrochemicals
• Oberoi Realty Ltd.
• TATA
• Ranbaxy
• RIL
• L&T
• Mahindra & Mahindra
• Palmolive Colgate
• A2Z Group
27. 6.2 Clients
International Clients
• P&G • HP
• Cameron • AMD
International • Boeing
• Capegemini • Mercedez
• D. Swarovski & Co. • Toyota
• IATA • Lucent
• IBM • Hitachi
• Japan Airlines Co. • Nike
• Java Republic
• Phillips
• Unilever
• Compaq
28. 6.3 Clients
Overall
SAP HIGH TECH &
Others 11.5%
ELECTRONICS 11.3%
SAP BANKING 2.0%
SAP MEDIA 2.3% SAP ENGINEERING &
SAP HEALTHCARE 2.3% CONSTRUCTION 10.5%
Metal, Paper & Wood
Products 2.8%
Services 3.1%
SAP OIL & GAS 3.2%
SAP TELECOM-
Worldwide SAP
MUNICATIONS 3.4% CONSUMER
PRODUCTS
SAP PHARMA -
10.3%
CEUTICALS 3.4%
SAP PUBLIC SECTOR
3.4% SAP CHEMICALS 9.5%
SAP UTILITIES 3.9%
SAP AUTOMOTIVE 4.8% SAP RETAIL 6.3%
Consulting & Professional Services 6.0%
34. 7.5 Financial Highlights
• ANNUAL REPORT OF SAP:
The financial report shows the profit and loss account
maintained as per IFRS.
• The P/L Account shows :-
Operating Profit increased by 12% in first half of 2012.
Gross margin improved by 110 bps.
• As per Balance sheet :-
Profit after payment of taxes in 2012 is 1104 million Euros
which shows an increase.
SAP is keeping the future in mind, as it has increased the
assets from last year for the purpose of growth and
expansion.
37. 7.8 Financial Highlights
• SAP Financials 2007-2011
– The annual report presented by SAP , shows the total
revenue from 2007-2011.The total amount in 2007 was
10,242 million Euros and in 2011 was 14,260 million Euros
. It shows the constant increase in the total revenue from
2007 to 2011.
– The operating profit of SAP in 2007 was 2,698 million
Euros which increased to 4,881 million Euros in 2011. It is
a good sign for SAP.
– The profit before tax in 2007 was 2,824 which later on
increased to 4,768 million Euros in 2011.
– The profit after tax in year 2007 was 1,908 and in 2011
was 3439 million Euros.
– The total assets is 10,161 million Euros in 2007 and now
in 2011 it is 23,225 million euros.It shows that company is
39. 8.1 SWOT Analysis
Strengths
– Function Fitness
– Market share leadership
– Strong management team
– Good Security
– Focus on research and development
– Diversified geographical spread
– Strong position in business software
40. 8.2 SWOT Analysis
• Weaknesses
– Highly complicated
– Its not user-friendly
– Lack of diversification
– Declining margins
41. 8.3 SWOT Analysis
• Opportunities
– Acquisitions
– Ability to leverage market position
– Move into the web based SaaS model
– Strategic partnerships
– Growing business intelligence platform market
– Growing SaaS market