Necessity is the mother of all inventions, profitable or not, that is debatable. But innovation on the other hand requires a vision, with profitability of the enterprise in its heart. Back in the 1970s different companies, big and small, used IBM machines for their business needs, and built management programs on them. Five system analysts at IBM observed that everyone was basically building the same management software for themselves, programming on similar lines by investing lots of money on in-house programming. They thought that if they could provide a solution to answer these needs of different enterprises, it would be more profitable and the set up time for these companies could be drastically reduced. Hence, these five IBMers, Dietmar Hopp, Klaus Tschira, Hans-Werner Hector, Hasso Plattner and Claus Wellenreuther devoted their nights and weekends in developing market standard enterprise software meant for real time data processing for integrating all the business processes. As a result of their efforts, SAP was born.
When Xerox decided to move out of the computer industry, it wanted to retain IBM technology in its business systems. As a part of the migration costs, IBM acquired software named SDS/SAPE which was later given to the founding members of SAP for about 8% founding stock of the company. The company established its headquarters in Weinheim and office in Manheim, Germany on April 1, 1972, registered as a private partnership under the German civil code as ‘Systemanalyse und Pogrammentwicklung’ (Systems Analysis and Program Development) though most of the time of the founding members was spent in the offices of their first customers, the local branch of Imperial Chemical Industries (ICI). By the end of its first year of operation, SAP employed 9 people and had generated DM 620,000 as revenue.
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