Research and Development
Resources for R & D
Fourteen Percent of Revenue Plowed into R & D
We must continuously improve our portfolio of products if we wish to maintain and build on our current leading position as a vendor of business software. Our R & D activities in 2007 centered on our new SAP Business ByDesign solution. This new solution strategically extends our existing portfolio for small businesses and midsize companies, which also includes the SAP Business One application and the SAP Business All-in-One solutions.
In 2007, our R & D expense rose 9% to €1,458 million (2006: €1,335 million; 2005: €1,089 million). We spent 14% of total revenue on R & D in 2007 (2006: 14%; 2005: 13%).
The importance of R & D was also reflected in the breakdown of employee profiles. In 2007, our total FTE count in development work was 12,951 (2006: 11,801; 2005: 10,215). This is 30% of all Group employees and represents a 10% rise in the number of R & D employees since the previous year. Of the employees working in R & D, 48% (2006: 52%; 2005: 57%) are employed in Germany, 25% (2006: 22%; 2005: 18%) are in our high-growth development centers in China and India, and about 27% (2006: 26%; 2005: 25%) are in our other development locations.
The expenses for R & D include employee salaries and the cost of externally procured development services.
