SAP Releases

SAP R/2

Initial SAP release was known as SAP R/2. This release was designed to work on mainframe computers. Mainframe computing is two tier architecture. The database and application sits on the mainframe computer and users access the application through terminals. Terminal is simply a dumb box without a CPU; keyboard and a monitor is attached to this box. In comparison to three-tiered architecture you can think mainframe as applications server and a database server combined and a terminal as a presentation layer

SAP R/3

The next generation of SAP software was called SAP R/3.This was the most popular release. Even today the term SAP is used synonymously with SAP R/3 (the usage may not true anymore). SAP R/3 was based on client server architecture. The presentation layer and the business logic would reside on a desktop. The database would run on a database server. All desktops would connect to the database server to write and read data. If one has to upgrade the business logic then the entire desktop would need to be patched.

SAP ECC

Finally SAP ECC arrived. ECC stands for ERP Central Component. SAP ECC is based on three tiered architecture (Presentation Layer, Business Logic Layer, Database Layer).This architecture is very flexible and scalable and would also support SOA as well. The main strength of SAP ECC in the NetWeaver software running underneath it as a common technology. SAP ECC is the latest generation of SAP business software.

Primary objective of a company is to make money. A business produces either a product or a service in order to make money. Products or services are sold to customers. The raw material and operating supplies are purchased from vendors. The company needs to manage customers and vendors. Also the company would produce reports each month (or each period) showing the progress of the business. Also the company would need to manage all aspects of the business e.g. employees, bank accounts, inventory etc.In order to make things manageable there would be various departments in the company each looking after a particular aspect of the business e.g. Finance Department, Manufacturing Department, Human Resources Department etc. Each department would need to use some kind of software in order to manage their day to day activities. Enterprise Resource Planning (ERP) software is an enterprise wide solution. ERP software consists of modules. Each department of the company could use one or more modules (specific to that department) of the ERP software in order to manage its day to day tasks. All modules of ERP software are connected. This way management can have a view on the company as a whole. SAP is leading ERP software with largest market share.

Usually the term SAP refers to both the company and its software.SAP AG is a company based in Walldorf, Germany. AG in German stands for "Incorporated". SAP is pronounced as s-a-p, not as sap.

SAP was founded in 1972 in city of Mannheim, Germany. SAP AG is an older company than both Oracle and Microsoft. A group of five ex-IBM engineers formed this company. The idea was to develop a software that integrates business functions in a manner that reflects industry best practices. This way a company could replace multiple software (financial, warehousing, production planning) with one single software having integrated modules. Maintaining a single version of truth results in: synergies and communication benefits. This idea soon evolved into a product called "System, Applications, and Products in Data Processing" (SAP). 
In German SAP stands for "Systemanalyse und Programmentwicklung".

SAP was designed in such a way that it could be installed on a variety of hardware platforms and could work with variety of back-end databases

This gave its customers flexibility and is a major factor in propelling SAP into forefront.

SAP supports:

§  More than 40 languages

§  More than 50 currencies

§  More than 30 industry specific solutions

§  More than 20 combinations of hardware platforms/database/operating systems

Within two decades of its birth, SAP was not the only business software vendor. IBM was facing a tough competition from SAP

Various players emerged including:

§  BAAN

§  Oracle Corporation

§  PeopleSoft

§  JD Edwards

Some small players start gaining grounds as well including:

§  Great Plains

§  Navision SAP remained the leader throughout, mainly due its support for diverse platform.

JD Edwards was purchased by PeopleSoft, which was later on purchased by Oracle Corporation. Currently, Oracle Corporation is number one rival for SAP with its software called Oracle E-Business Suite.

SAP AG is based in Germany and listed on New York Stock Exchange (NYSE) under the symbol of SAP. The company has about 43,000 employees. SAP has about 2000 support partners. About 46,000 customers have purchased SAP software and more than 100,000+ installations are in place around the globe. The company does business in more than 50 countries. There are more than one million SAP end-users. Primary competitors of SAP are Oracle and Microsoft.

All three, SAP, Oracle, and Microsoft provide:

§  Business software for large enterprise

§  Solutions for small and medium sized business

§  Software development platforms

§  Ability to tie together disparate systems (Integration Solution)

All three help sustain one another. Examples are:

§  Most installation of SAP runs on Oracle database (Oracle Corporation makes database as well as their own business software).

§  Microsoft Windows is most popular desktop operating system to access SAP software