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Issue No.04 - October-December (2008 vol.30)
pp: 60-76
Timo Leimbach , Fraunhofer Institute Systems and Innovation Research
ABSTRACT
The success of the German company SAP and its enterprise software contradicts the widespread assumption of American dominance in the computer software industry. In this combined business and technology history of SAP, the author explores the individuals and ideas behind the concept of standardized, integrated business software and how SAP developed from a small company to a global market leader.
INDEX TERMS
History of computing, people, systems, software, SAP, German software industry
CITATION
Timo Leimbach, "The SAP Story: Evolution of SAP within the German Software Industry", IEEE Annals of the History of Computing, vol.30, no. 4, pp. 60-76, October-December 2008, doi:10.1109/MAHC.2008.75
REFERENCES
1. M. Campbell-Kelly, From Airline Reservations to Sonic the Hedgehog, MIT Press, 2003, p. 166.
2. Ibid., pp. 12, 24, 166-169, 191-199.
3. J.W. Cortada, The Digital Hand, Vol. I, Oxford Univ. Press, 2003, p. 63, A.D. Chandler, Inventing the Electronic Century, Free Press, 2001, pp. 168, 216-237. Chandler, for example, mentioned only four founders. Campbell-Kelly situated Walldorf south of Munich, instead of south of Heidelberg.
4. This article is based on my upcoming PhD thesis, "The Software Industry in Germany: Development and Application of Information Technology between the 1950s and 1990s." An earlier article I wrote about SAP was published as "Vom Programmierbüro zum globalen Softwareproduzenten. Die Erfolgsfaktoren der SAP von der Gründung bis zum R/3-Boom, 1972–1996" [From a Programming Bureau to a Global Software Producer. Success Factors of SAP from the Founding to the R/3 Boom, 1972–1996], Zeitschrift für Unternehmensgeschichte, vol. 56, no. 1, 2007, pp. 33-56.
5. Oral history interviews that I cite emerged from my PhD thesis. Only the interview with Hasso Plattner originated from the Computerworld Honors Program, but because the online transcription quality is suboptimal, I refer here to an officially improved and translated version: H. Plattner et al., Dem Wandel voraus [Ahead of Changes], Galileo, 2000, pp. 13-65.
6. G. Meissner, SAP—die heimliche Software-Macht, Heyne, 1999, (English translation version: SAP: Inside the Secret Software Power, McGraw-Hill, 2000).
7. See, for example, H. Hirsch-Kreinsen, Unternehmensnetzwerke revisited, Zeitschrift für Soziologie, vol. 31, no. 2, 2002, pp. 106-124.
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9. M. Lehrer, "From Factor of Production to Autonomous Industry: The Transformation of Germany's Software Sector," Vierteljahrshefte zur Wirtschaftsforschung, vol. 69, no. 4, 2000, pp. 587-600.
10. Campbell-Kelly, Airline Reservations to Sonic the Hedgehog, p. 6; D. Hoch et al., Secrets of Software Success, HBS Press, 2000, p. 264.
11. W.E. Steinmueller, "The U.S. Software Industry: An Analysis and Interpretative History," The International Computer Software Industry, D. Mowery ed. Oxford Univ. Press, 1996, pp. 15-52.
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14. E. Graddy and S. Klepper, "The Evolution of New Industries and the Determinants of Market Structure," RAND J. Economics, vol. 21, no. 1, 1990, pp. 27-44.
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16. See, for example, B. Grad, "A Personal Recollection: IBM's Unbundling of Software and Services," IEEE Annals of the History of Computing, vol. 24, no. 1, 2002, pp. 64-71, as well as other articles in the same issue.
17. K. Neugebauer, "Um die Entbündelung der Computerpreise [On the Unbundling of Computer Prices]," Bürotechnik + Automation, vol. 10, no. 8, 1969, pp. 448-452, G. Leue and R. Herbold, "Unbundling—Neue preispolitische Aspekte auf dem Computermarkt" [Unbundling—New Price-Political Aspects in the Computer Market], Elektronische Datenverarbeitung, vol. 12, no. 3, 1970, pp.127-132.
18. J. Griese, "Zur geschichtlichen Entwicklung der Softwarehäuser [On the Historical Development of Software Houses]," Angewandte Informatik, vol. 24, no. 2, 1982, pp. 146-151, Nomina GmbH, ISIS Firmen Report 1980/1, München, 1980.
19. U. Neugebauer et al., Untersuchung über Maßnahmen zur Verbesserung der Software-Produktion [Analysis of the Measures for Improving Software Production], Oldenbourg, 1980, pp. 97-99.
20. The Lünendonk List is an annual list of the 25 biggest German software and services companies. DV-Service transparent 1994 [Transparent DP Services], Lünendonk GmbH, 1994.
21. K. Neugebauer, "Um die Entbündelung der Computerpreise [About Unbundling Computer Costs]," Bürotechnik + Automation, vol. 10, no. 8, 1969, p. 452.
22. F. Theißing, Auf dem Weg in die Softwarekrise [On the Way into the Software Crisis], TU Berlin, 1995, pp. 1-6.
23. Geschäftsbericht 1996 [Annual Report 1996], SAP AG, 1997, p. 10.
24. C. Wellenreuther, oral history interview by T. Leimbach, Mannheim, Germany, 19 Dec. 2005; D. Hopp, oral history interview by T. Leimbach, St. Leon-Rot, Germany, 26 June 2006.
25. D. Hopp, H. Meier, and H. Plattner, Auftragsabwicklung, Disposition und Versandsteuerung im Realzeitbetrieb [Order Processing, Disposition, and Dispatch Control in Real-Time Processing], IBM Deutschland, 1972.
26. Plattner et al., Dem Wandel voraus, p. 21.
27. 20 Years of SAP: 1972–1992, SAP AG, 1992, p. 10.
28. W. Rothermel, oral history interview by T. Leimbach, Östringen, Germany, 21 Jan. 2008.
29. Methoden des Projektmanagements, Erfahrungsaustausch und weiterführende Verfahrensentwicklung für Projekte im DV-Bereich [Methods of Project Management, Exchange of Experiences and Further Development of Procedures for Projects in the DP Sector], Diebold Deutschland GmbH, 1975, p. 37.
30. Capital Venture in Information Technology, OECD (Organization for Economic Cooperation and Development), 1985, pp. 31-32; H. Klandt and G. Kirschbaum, Software- und Systemhäuser: Strategien in der Gründungs- und Frühentwicklungsphase [Software and Systems House: Strategies in the Founding and Start-up Phase], GMD, 1985, p. 131.
31. Plattner et al., Dem Wandel voraus, pp. 23-24, D. Hopp, oral history interview.
32. W. Rothermel, oral history interview; Plattner et al., Dem Wandel voraus, p. 22; W. Aspray and M. Campbell-Kelly, Computer: A History of the Information Machine, Basic Books, 1996, pp. 157-180; Ceruzzi, A History of Modern Computing, pp. 250-252.
33. C. Wellenreuther, oral history interview; W. Rothermel, oral history interview; Ceruzzi, A History of Modern Computing, pp. 143-167.
34. "Standardsoftware," Gabler-Wirtschafts-Lexikon, Gabler, 1994, p. 3096.
35. D. Hoch et al., Secrets of Software Success, HBS Press, 2000, p. 36.
36. P. Neugart, oral history interview by T. Leimbach, Hockenheim, Germany, 18 July 2006.
37. Communications Oriented Production Information and Control System: Management Overview, IBM Corp., 1972.
38. J. Miller and L. Sprague, "Behind the Growth in Material Requirements Planning," Harvard Business Rev., vol. 53, no. 5, 1975.
39. H.-O. Henkel, oral history interview by T. Leimbach, Berlin, Germany, 9 Mar. 2006.
40. Campbell-Kelly, From Airline Reservations to Sonic the Hedgehog, pp. 3-11.
41. Hoch et al., Secrets of Software Success, p. 29.
42. M. Cusumano, The Business of Software, Free Press, 2004, pp. 86-126.
43. U. Neugebauer et al., Der Software-Markt in der Bundesrepublik Deutschland [The Software Market in the Federal Republic of Germany], GMD, 1989, p. 19.
44. "Entscheidungen haben politischen Charakter. Kritik an SAP: Kunden von Beratern abhängig" [Decisions Have Political Character: Critics to SAP: Customers Are Depending on Consultants], Computerwoche, vol. 17, no. 35, 1990; see http://www.computerwoche.deheftarchiv/.
45. Aufstellung der Umsatz- und Mitarbeiterzahlen [List of Revenue and Employees: SAP Numbers,] Walldorf, Germany, 2005; Geschäftsbericht 2006 [Annual Report 2006], SAP, Walldorf, 2007; Wichtigste Kennzahlen seit Börsengang [Important Key Figures since Going Public], SAP, Walldorf, 2005.
46. 20 Years of SAP, pp. 9-11; C. Heitz, "Maßschneidern spart Overhead" [Tailor-made Saves Overhead], Computerwoche, vol. 2, no. 23, 1975.
47. Amtsgericht Heidelberg, Handelsregisterauszug HRB 269-Wie [Extract from the Commercial Register], Heidelberg, 1989.
48. D. Eckbauer and E. Elmauer, "Unter 20.000 Monatsbuchungen ist Dialog nicht rentabel [Below 20.000 in Monthly Bookings, Dialogue Isn't Cost-Effective]," Computerwoche, vol. 4, no. 35, 1977.
49. Wellenreuther, oral history interview; Plattner et al., Dem Wandel voraus, pp. 23-27; 20 Years of SAP, p. 11.
50. 20 Years of SAP, pp. 11-12.
51. U. Neugebauer et al., Der Markt für Software, Systeme und DV-bezogene Dienstleistungen in der Bundesrepublik Deutschland [The Market for Software, Systems, and DP-related Services in the Federal Republic of Germany], GMD, 1983, p. 68.
52. Plattner et al., Dem Wandel voraus, p. 24.
53. Plattner et al., Dem Wandel voraus, pp. 39-41, W. Rothermel, oral history interview.
54. "SAP sieht McCormack&Dodge nicht als echte Konkurrenz" [SAP Does Not Consider McCormack &Dodge Real Competition], Computerwoche, vol. 16, no. 12, 1989; "Software AG, SAP und Softlab sind die Ausnahmen" [Software AG, SAP and Softlab Are Exceptions], Computerwoche, vol. 17, no. 23, 1990.
55. "Verkaufshilfe durch Berater" [Assistance in Sales by Consultants], Online, vol. 25, no. 3, 1988; "Börsenneuling SAP geht auf die Überholspur" [Stock Exchange Beginner SAP Takes the Fast Lane], Computerwoche, vol. 35, no. 27; G. Meissner, SAP—die heimliche Software-Macht [SAP: Inside the Secret Software Power], Heyne, 1999, pp. 189-222.
56. See, for example, "Anwender: SAP hat Monopolstellung inne," [Users: SAP Own Monopoly Position], Computerwoche, vol. 17, no. 37, 1990; D. Eckbauer, "Gemeine Vetternwirtschaft?" [Unfair Favoritism], Computerwoche, vol. 14, no. 48, 1987.
57. H.-O Henkel, Die Macht der Freiheit [The Power of Freedom], Econ, 2001, pp. 157-158.
58. "SAA soll Erweiterung des Kundenpotentials ermöglichen: SAP hat den Mittelstand entdeckt" [SAA Should Enable Broadening of Potential Customers Segment: SAP Has Discovered Medium-Sized Business], Computerwoche, vol. 14, no. 38, 1987; 20 Years of SAP, p. 14.
59. U. Neugebauer et al., Der Software-Markt in der Bundesrepublik Deutschland [The Software Market in the Federal Republic of Germany], pp. 19-20.
60. Geschäftsbericht 1989 [Annual Report 1989], SAP AG, 1990, p. 24.
61. Companies &Sectors: Finanzinformationen für Deutschland, Hoppenstedt, 2004, p. 1776; "Dann gute Nacht" [Then Good Night], Der Spiegel, vol. 49, no. 9, 1995, pp. 84-86; Hopp, oral history interview.
62. "SAA soll Erweiterung des Kundenpotentials ermöglichen," Computerwoche, vol. 14, no. 38, 1987.
63. "Mißtrauen gegenüber der Informationspolitik des Marktführers—Unix vor SAA: SAP ändert Softwarestrategie" [Distrust against the Information Policy of Market Leader—Unix in front of SAA: SAP Changes Software Strategy], Computerwoche, vol. 14, no. 47, 1987; D. Hopp, "Kein Mißtrauen" [No Distrust], Computerwoche, vol. 14, no. 47, 1987.
64. Plattner et al., Dem Wandel voraus, pp. 29-30, Geschäftsbericht 1990 [Annual Report 1990], SAP AG, 1991, p. 7.
65. Plattner et al., Dem Wandel voraus, pp. 29-31, SAP, Geschäftsbericht 1990, p. 7; Hopp, oral history interview.
66. "Der Knoten ist geplatzt [The Penny Has Dropped]," Der Spiegel, vol. 49, no. 13, 1997, p. 112.
67. Geschäftsbericht 1991 [Annual Report 1991], SAP AG, 1992, p. 7; F. Jacobs and F.C. Weston, "ERP—A Brief History," J. Operations Management, vol. 25, no. 2, pp. 357-363.
68. Plattner et al., Dem Wandel voraus, pp. 31-34, G. Meissner, SAP—die heimliche Software-Macht [SAP: Inside the Secret Software Power], Heyne, 1999, pp. 72-74.
69. "Liste der 25 größten Software- und IT-Unternehmen in Deutschland 1996" [List of the 25 Largest Software and IT Companies in Germany, 1996], Lünendonk GmbH, 1997.
70. P. Dietz, Aufbruchsjahre [Years of Dawn], Innovatio, 1995, pp. 218-220.
71. F. Meier, "Ehrgeiziges Projekt [Ambitious Project]," Wirtschaftswoche, vol. 48, no. 27, 1994, pp. 46-48.
72. B. Böndel, "Wie Lemminge [Like Lemmings]," Wirtschaftswoche, vol. 49, no. 12, 1995, pp. 108-117, Meissner, SAP—die heimliche Software-Macht [SAP: Inside the Secret Software Power], pp. 136-149.
73. "Merkwürdiger Dank" [Curious Thanks], Der Spiegel, vol. 50, no. 21, 1996, p. 98; Meissner, SAP—die heimliche Software-Macht [SAP: Inside the Secret Software Power], pp. 234-248; Hoppenstedt, Companies &Sectors: Finanzinformationen für Deutschland [Companies and Sectors: Financial Information for Germany], pp. 1776-1777.
74. Meissner, SAP—die heimliche Software-Macht, pp. 11-14.
75. Geschäftsbericht 1997 [Annual Report 1997], SAP AG, 1998, pp. 34-39.
76. "See, for example, Der Knoten ist geplatzt," Der Spiegel, pp. 109-112, and Geschäftsbericht 2003 [Annual Report 2003], SAP AG, 2004, pp. 5-6.
77. For these recent developments, you can find confirmations in SAP AG's annual reports and in contemporary news from Computerworld, CIO, or other publications.
78. Geschäftsbericht 2004 [Annual Report 2004], SAP AG, 2005, pp. 5-7.
79. Geschäftsbericht 2006 [Annual Report 2006], SAP AG, 2007, II.
80. Campbell-Kelly, From Airline Reservations to Sonic the Hedgehog, p. 191.
81. G. Dosi, "Technological Paradigms and Technological Trajectories," Research Policy, vol. 11, no. 3, 1982, pp. 147-162.
82. See, for example, E. von Hippel, Democratizing Innovation, MIT Press, 2005.
83. ASUG (American SAP User Group), Annual Report 1999, 2000, p. 2.
84. Hopp, oral history interview; Böndel, "Wie Lemminge," pp. 108-117.
85. D. Lippold, Marketing-Gleichung für Software[Marketing Quotation for Software], Metzler, 1996 (in German); Geschäftsbericht 2005[Annual Report 2005], SAP AG, 2006, pp. 66, 138.
86. B. Dornseifer, "Zur Bürokratisierung deutscher Unternehmen im späten 19 und frühen 20. Jahrhundert," Jahrbuch für Wirtschaftsgeschichte, vol. 34, no. 1, 1993, pp. 69-91.
87. J. Yates, Structuring the Information Age: Life Insurance and Technology in the Twentieth Century, Johns Hopkins Univ. Press, 2005.
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