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Frequently Asked Questions

SAP SE

Company

When was SAP founded?

In 1972, five former IBM employees founded the company they call SAP Systemanalyse und Programmentwicklung ("System Analysis and Program Development").Taking the initial form of a private partnership under the German Civil Code, the company establishes its headquarters in Weinheim, Germany, and opens an office in nearby Mannheim. However, SAP's five founders spend most of their time in the data centers of their first customers, which include the German branch of Imperial Chemical Industries in Östringen.

Further information can be found on the SAP History page.

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What does the acronym "SAP" stand for?

"SAP" stands for Systems, Applications, and Products in Data Processing.

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What is SAP’s vision and mission?

In the digital era, data is the “new currency” in an enterprise. Businesses that are able to harness their data faster and more effectively will be the ones that succeed through disruption.

As the world’s largest enterprise software company, SAP offers perspective on the massive scale and power of data. Our customers have a vast amount of enterprise data assets flowing through our SAP ERP and cloud applications and business networks every day. Our enterprise resource planning applications touch 76% of global transaction revenue, we run the world’s largest business network with over US$2.6 trillion in commerce annually, and we have over 170 million users of our cloud applications.

SAP software and technologies can deliver deep value to our customers by providing the tools to harness the power of the data flowing through their systems. Our vision for the intelligent enterprise is an event-driven, real-time business powered by intelligent applications and platforms. In this vision, enterprise data sits at the core of a virtuous cycle whereby:

  • Enterprises will combine proprietary data assets from their internal systems of record with real-time, external data feeds to train intelligent algorithms.
  • Intelligent algorithms will be embedded into core business processes to enable enterprises to increase their awareness of events and respond in real time.
  • As the cycle repeats itself, enterprises will produce even richer datasets based on business outcomes that can be used to train the next generation of increasingly intelligent algorithms.

By embedding intelligence in core processes, businesses of all sizes will benefit from the automation of routine tasks and improved decision-making driven by advanced analytics.

Combining intelligent algorithms with empowered employees will allow companies to free up scarce resources to focus on what matters most – driving value for their customers. In this way, we can fulfill our promise of enabling our customers to Run Simple, while helping the world run better and improving people’s lives.

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What is your business outlook for 2018?

Due to the strong momentum in SAP’s cloud business, the Company is raising its outlook for the full year 2018:

  • Non-IFRS cloud subscriptions and support revenue is now expected to be in a range of €5.150 billion to €5.250 billion at constant currencies (2017: €3.77 billion), up 36.5% to 39.0% at constant currencies. The previous range was €4.95 billion to €5.15 billion at constant currencies.
  • Non-IFRS cloud and software revenue is now expected to be in a range of €21.150 to €21.350 billion at constant currencies (2017: €19.55 billion), up 8.0% to 9.0% at constant currencies. The previous range was €20.85 to €21.25 billion at constant currencies.
  • Non-IFRS total revenue is now expected to be in a range of €25.200 billion to €25.500 billion at constant currencies (2017: €23.46 billion), up 7.5% to 8.5% at constant currencies. The previous range was €24.80 billion to €25.30 billion at constant currencies.
  • Non-IFRS operating profit is now expected to be in a range of €7.425 billion to €7.525 billion at constant currencies (2017: €6.77 billion), up 9.5% to 11.0% at constant currencies. The previous range was €7.35 billion to €7.50 billion at constant currencies.

While SAP’s full-year 2018 business outlook is at constant currencies, actual currency reported figures are expected to be impacted by currency exchange rate fluctuations as the Company progresses through the year. See the Q3 Quarterly Statement for the currency impacts expected in Q4 and FY 2018.

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What is SAP´s mid-term outlook (2020)?

Looking beyond 2018, SAP is updating its 2020 ambition. This update reflects the strong momentum in SAP’s cloud business, the acquisition of Callidus Software as well as a more challenging currency environment compared to 2017.

SAP now expects 2020 non-IFRS cloud subscriptions and support revenue in a range of €8.2 to €8.7 billion (previously: €8.0 to €8.5 billion).

SAP continues to expect:

  • €28 to €29 billion non-IFRS total revenue
  • €8.5 to €9.0 billion non-IFRS operating profit
  • The share of more predictable revenue (defined as the total of cloud subscriptions & support revenue and software support revenue) in a range of 70% to 75%.

The updated ambition is based on estimated average 2018 currencies, assuming the current foreign exchange environment prevails until year-end. The previous ambition was based on average 2017 currencies. The change in currency assumptions negatively impacts the cloud subscriptions and support revenue ambition by approximately -€0.35 billion, the total revenue ambition by approximately -€1.0 billion and the operating profit ambition by approximately -€0.4 billion. These negative impacts are now included in the updated 2020 ambition.

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Are you planning to grow organically or through acquisitions?

Organic growth remains the primary driver of our strategy. We will continue to invest in our own product development and technology innovation, improving the speed, number of projects, and innovations brought to market. We will also continue to acquire targeted, strategic, and “fill-in” technology and software to add to our broad solution offerings and improve coverage in key strategic markets. By doing so, we will strive to best support our customers’ needs for simplified operations. Additional information can be obtained here.

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Where can I find information about SAP's most important acquisitions?

Detailed information on our acquisitions can be found in section Acquisitions.

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What is SAP's current headcount?

On December 31, 2017, we had 88,543 full-time equivalent (FTE) employees worldwide (December 31, 2016: 84,183).

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Do SAP employees participate in the company's success?

SAP offers its employees and managers various investment programs.

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Can you explain SAP’s commitment to sustainable business practices?

Sustainability is core to the overall business strategy at SAP and our vision to help the world run better and improve people’s lives. For us, sustainability means holistically managing the financial, social, and environmental dimensions of business, in order to reduce economic risks and to seize opportunities for increased profitability. As our Integrated Report 2014 shows, SAP is committed to not only providing a comprehensive view of the dependencies between our economic, social and environmental performance. It also helps us move closer towards a sustainable business strategy. Such a strategy is defined by embedding sustainability deeply into how we create value for our customers in the first place, i.e. through the software we create for businesses around the world.

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Why can’t I order a printed annual report anymore?

SAP, as a digital leader, in now taking a digital-first approach to reporting. Further, this approach supports our environmental goals to reduce printed material.

Therefore, SAP has decided to provide a small number of printed reports at the Annual General Meeting of Shareholders only. The full SAP Integrated Report is available online and for download at www.sapintegratedreport.com.

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Where can I read current SAP business and financial news?

Current SAP business and financial news are listed under Financial News and in the Press Room.

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European company (SE)

What is an SE?

The European Company (Societas Europaea, SE) is a supranational legal form under European law for commercial enterprises within the territory of the European Union.

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Why was SAP AG converted into an SE?

The change of legal form from a stock corporation under German law to a European Company was made to manifest SAP’s self-image as an international player with European roots. Presenting itself as a European Company thus reflects the importance of the Company’s European and international operations.

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What were the advantages of the conversion for SAP?

The legal form of the European Company enabled the Company to develop, together with representatives of the European workforce, a model for the involvement of employees which was tailored to the needs of the Company. It could thus be ensured that both the corporate governance structure of SAP and the work of its corporate organs were optimized. An important step in this development was the opportunity to be able to limit the size of the Supervisory Board to 18 members. Without the change of legal form to the SE, in contrast, a larger Supervisory Board comprising 20 members would have been inevitable having regard to the development of the number of German employees, which would have adversely affected the efficiency of the work of the Supervisory Board. SAP’s aim was a Supervisory Board size of 18 members. This had been determined in an agreement between the central management of SAP AG and representatives of the European workforce on the involvement of the employees in SAP SE. Furthermore, it is provided in the Employee Involvement Agreement that the shareholders have the possibility to reduce the size of the Supervisory Board in the future (i.e. at the earliest in the Annual General Meeting of Shareholders in 2018, with effect from the Annual General Meeting of Shareholders in 2019) to 12 members. Following the change of legal form to the SE, the Supervisory Board is of course still required to be composed of an equal number of shareholders’ and employees’ representatives, i.e. half of its members are employees’ representatives. However, these representatives are no longer exclusively – directly or indirectly – designated by the German employee representatives of the SAP Group and the German trade unions, but also – directly or indirectly – with the involvement of the employees and trade unions from other member states of the EU or signatory states to the agreement on the EEA. The legal form of a European Company thus presented an opportunity for the Company to reflect its international character even more strongly now also with regard to the employees’ representatives on the Supervisory Board.

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How was the conversion achieved?

The conversion required that the Annual General Meeting of Shareholders consented to this measure on the basis of the Conversion Plan established by the Executive Board, and approved the Articles of Incorporation of SAP SE. Such consent and approval were granted by a resolution of the 27th Annual General Meeting of Shareholders of SAP AG on May 21, 2014. Furthermore, the procedure for the involvement of employees in the SE had to be conducted, which in the case of SAP resulted in the conclusion of an Employee Involvement Agreement between the central management and representatives of the employees from all over Europe. The conversion became effective on July 7, 2014, upon registration in the commercial register of the Company, i.e. the commercial register at the Local Court of Mannheim.

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How are the European employees involved in the decision-making within SAP SE?

In connection with the conversion of an AG to an SE, a procedure for the involvement of the European employees in the SE had to be conducted in order to secure the rights acquired by the employees of the AG as regards their involvement in company decisions. That procedure resulted in the conclusion of an agreement on employee involvement, which governs on the one hand the participation of the European employees in the Supervisory Board of the SE and on the other hand the procedure for informing and consulting the European employees through the SE Works Council. For more information on the Employee Involvement Agreement, please click here.

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What were the costs of the conversion?

The costs amounted to approximately €4 million.

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What were the consequences of the conversion in terms of corporate law and accounting?

The conversion of SAP AG to an SE did not result in the winding-up of the company or the creation of a new legal person. The legal and economic identity of the company was preserved by the change of legal form. For this reason, there was also no transfer of assets. The law applicable to SAP SE largely corresponds to the law applicable to a German stock corporation. As regards the annual financial statements, the management report, the group annual financial statements and the group management report, the same provisions apply to an SE as to an AG.

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What were the consequences of the conversion for the shareholders?

The shareholdings of the shareholders remained unchanged following the conversion to an SE. The shareholders retained the same number of shares that they had held in SAP AG immediately prior to the effective date of conversion. The notional portion of the capital stock represented by each no-par value share also remained the same as immediately prior to the effective date of conversion. There are no differences between SAP AG and SAP SE as regards the dividend entitlement of the shareholders. As at SAP AG, the General Meeting of Shareholders decides on the appropriation of retained earnings at SAP SE.

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What were be the tax consequences of the conversion?

The conversion of the company to an SE has not had any income tax effect nor triggered any obligation to pay German VAT or property transfer tax. Furthermore, the conversion has not resulted in a taxable profit or a loss that is relevant for taxation purposes for the shareholders. SAP SE is treated like a German corporation and is subject to corporate income tax and trade tax in the same way as SAP AG previously was. Disposals of shares in SAP SE are generally treated, at the level of the shareholders of SAP SE, in the same way as disposals of shares in SAP AG formerly were, unless applicable law or the factual circumstances change. The same applies to dividend distributions.

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What were the consequences of the conversion with regard to the shares and the stock exchange listing?

The conversion of SAP AG to SAP SE did not have any serious implications relating to the shares in the company and its listing. As the legal identity of the company was preserved by the change of legal form, the shareholders of SAP AG became shareholders of SAP SE upon the conversion. Exchange trading in SAP shares was not affected by the conversion, either. Only the quotation had to be adjusted to “SE” due to the change of name.

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Products and Markets

What products, solutions and services does SAP offer?

As market leader in enterprise application software and cloud company with the greatest number of users, SAP pursues a commitment to helping companies of all sizes and industries run better. With its software and services offering - whether deployed in the cloud or on-premise -, SAP empowers people and organizations to work together more efficiently and use business insight more effectively to stay ahead of the competition. 

More information can be found on the SAP Solutions page. See also the Products, Research & Development, and Services  section of the Integrated Report.

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What is Cloud Computing?

Cloud Computing is a generic term for flexible, IT-related services available through, or hosted on, the Internet for consumers and business, including storage, computing power, software development environments, and applications, combined with service delivery. Accessed as needed “in the cloud,” these services eliminate the need for in-house IT resources. 

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What is SAP HANA?

SAP HANA is our in-memory computing platform that lets companies accelerate business processes, deliver more business intelligence, and simplify their IT environment. SAP HANA removes the burden of maintaining separate legacy systems and siloed data, so companies can run live and business people can make better business decisions in the new digital economy. Emphasizing our cloud-first strategy, SAP HANA can be deployed on several public cloud infrastructures.

With our second version of SAP HANA, we launched a truly next-generation platform. It enables the reduction of time-consuming database and data management tasks and delivers intelligent applications that leverage advanced analytic processing and empowers all users with deeper insight into any data from anywhere. 

You can find an overview at: https://www.sap.com/products/hana.html

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How much revenue do the most important solutions earn for SAP?

SAP does not publish a breakdown of revenue by product.

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Where are SAP solutions developed?

Research and Innovation – Innovating for Future Growth
Nearly all of our software products are developed at our 15 SAP Labs locations in 13 countries across the globe. This global reach means that we have access to leading talent worldwide; in addition, we can collaborate with top universities throughout the world and have access to major technology hubs as well as diverse and vibrant startup communities. By understanding trends in different regions, as well as the specific needs of our customers that operate there, SAP has a major strategic advantage in developing products and services for the future.

In addition, through the SAP Innovation Center concept, we explore unconventional ideas and develop inspiring proofs of concept in a startup-like environment. We strive to open up new markets for SAP software and accelerate the integration of emerging technologies into our core products. Some of these innovations include:

  • Machine learning – Making all existing SAP solutions intelligent, bringing machine-learning services and APIs to our platform, and building intelligent business solutions in new and adjacent markets. To emphasize the importance of this topic, we have introduced the new brand SAP Clea that represents our entire machine learning portfolio.
  • Blockchain – Exploring the potential of digital finance to radically change how business transactions are conducted in the future and its impact on existing products and innovation potential of blockchain across industries.
  • Future enterprise applications – Enabling companies to successfully lead the next economic revolution by developing game-changing business applications to process intangible assets, provide contextual user assistance, and manage new business models.

We draw on the ideas of customers, partners, startups, academia, and, most importantly, our own employees. We want to foster organic innovation and support the transformation of great ideas into profitable business.

For more information see http://www.sap.com/corporate/en/company/innovation/sap-labs.html

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What is R&D expense?

In 2017, our IFRS R&D expenses as a portion of total operating expenses remained stable at 18.0% compared to the prior year. Our non-IFRS R&D expense ratio remained stable at 18.4% year over year. At the end of 2017, our total full-time equivalent (FTE) headcount in development work was 24,872 (2016: 23,363). Measured in FTEs, our R&D headcount was 28% of total headcount (2016: 28%).

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What is SAP S/4HANA?

SAP S/4HANA, our next-generation business suite, allows our customers to embrace the digital economy. The digital core is the foundation for running a Live Business: 

  • Immediate – Empowering business users with insights to act in the moment
  • Intelligent – Going beyond automation to provide predictive suggestions
  • Integrated – Connecting not only customer functions but also people, things, and businesses

Based on SAP HANA, SAP S/4HANA software can store and process huge amounts of data while significantly reducing an organization’s data footprint. This means our customers can save time and cost.

Available in the cloud, on premise, or as a hybrid deployment, in 2016, SAP S/4HANA evolved from a finance-focused offering into a full digital-age ERP system. It enables insight and understanding so businesses can predict outcomes and use that data to make decisions live, which helps companies stay competitive in the digital economy. SAP S/4HANA can replace a traditional ERP solution across all lines of business (LoBs), such as finance, human resources, sales, service, procurement, manufacturing, asset management, supply chain, and research and development (R&D).

Customers recognize the benefits and power of SAP S/4HANA and, at the end of September 2018, more than 9,500 customers had chosen the suite to support their digital transformation. 

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Is SAP S/4HANA available in the cloud?

In addition to our on-premise suite SAP S/4HANA, we further strengthened our SAP S/4HANA Cloud offering, delivering the power of a digital core with the key benefits expected from a software-as-a-service solution. It provides the scalability, ease of management, and security required in today’s digital economy. A quarterly release cycle helps ensure that customers can benefit from regularly delivered innovations with minimum disruption to their business.

SAP S/4HANA Cloud is comprised of various solutions targeted to meet the specific business needs of our customers and enable their journey to the cloud. For example, the SAP S/4HANA Enterprise Management Cloud solution provides a next-generation ERP suite in the cloud with integrated, end-to-end processes. 

SAP S/4HANA Cloud was developed to co-exist in a heterogeneous system landscape with native integration to other SAP solutions and open interfaces for further integration and extensions using SAP Cloud Platform (formerly called SAP HANA Cloud Platform). The solution also supports specific industry and LoB requirements with preconfigured content from SAP Best Practices packages and uses the award-winning SAP Fiori user experience (UX) to provide simplified, role-based usability.

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What is SAP Cloud Platform?

SAP Cloud Platform is our strategic platform-as-a-service offering.

Providing both ease of use and flexibility, this cloud platform allows our customers and partners to build, extend, run, and sell applications and services in the cloud.

SAP Cloud Platform includes infrastructure, data, and storage, as well as a toolbox of platform and application extension services.

Moreover it enables connectivity between SAP solutions, including on-premise software such as SAP Business Suite as well as software-as-a-service offerings such as SAP SuccessFactors solutions. 

For more information see: https://cloudplatform.sap.com/index.html

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Why does SAP invest in Business Networks?

Our business networks are best-in-class cloud applications that connect a global ecosystem of customers, suppliers, and partners. The products and services go beyond the four walls of a business to integrate and connect systems, services, partners, and data – creating more efficient, more powerful, and far simpler ways to manage key business functions. They provide the outcomes and experiences business users need through open and connected platforms.

Included in the business networks portfolio are SAP’s market-leading Concur, SAP Ariba, and SAP Fieldglass solutions, which are at the center of our business network strategy. 

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Sustainability

What is SAP’s sustainability strategy?

We define sustainability as the creation of social, environmental, and economic value for long-term business success and responsible global development. In line with this definition, we aim to move from a separate sustainability strategy to a sustainable corporate strategy. This means we seek to embed sustainability in everything we do: our solutions, our operations, and our social investment.

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What is integrated reporting and what is SAP’s involvement in it?

The International Integrated Reporting Council (IIRC, http://www.theiirc.org/) defines integrated reporting as "a process that results in communication, most visibly a periodic‚ integrated report, about value creation over time. An integrated report is a concise communication about how an organization’s strategy, governance, performance and prospects lead to the creation of value over the short, medium and long term." SAP published its first Integrated Report in 2013 (for the 2012 year). The current SAP Integrated Report may be found at www.sapintegratedreport.com

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What are SAP’s carbon targets and strategy?

SAP aims to achieve a net-zero carbon footprint for SAP’s operations by 2025. This includes all direct (scope 1), indirect (scope 2), and selected categories of value chain (scope 3) greenhouse gas emissions (GHG) such as business flights, employee commuting, and co-locations of data centers. SAP will continue existing initiatives and programs to drive efficiency and innovation to avoid and reduce GHG emissions, following our approach “avoid – reduce – compensate.”

  1. Avoid: Whenever possible, SAP aims to avoid the creation of GHG. This is our priority (e.g., usage of virtual telecommunication instead of business flights).
  2. Reduce: If we cannot avoid GHG emissions, we aim to drive efficiency and reduce GHG emissions for all type of emissions (e.g., carpooling and car sharing, e-mobility).
  3. Compensate: Compensation / offsetting is only the last option. We extend our existing proven compensation models by enlarging our embedded internal carbon pricing model for CO₂-free travel by train and airplane. Another example is the implementation of carbon neutral fuel cards for company cars. 
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What is the employee engagement index?

We define employee engagement as a score for the level of employee commitment, pride, and loyalty, as well as our employees’ feeling of being an advocate of SAP. It is calculated based on the results of regular employee surveys. Employee engagement remains one of SAP’s four corporate strategic goals, along with growth, profitability, and customer loyalty. In 2017, we again achieved an employee egagement score of 85%. For 2020, we aim to reach an Employee Engagement Index between 84% and 86%. For more information, visit the SAP Integrated Report, Social Highlights section.

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What are SAP's global policies that govern employee behavior and avoid corruption?

Our compliance management system details our policies and procedures for ensuring ethical business conduct. Our policies govern the conduct of our management, employees, suppliers and partners, as well as critical areas of our business such as sales, vendor selection, and payroll. In addition, we train employees on the SAP Code of Business Conduct for Employees, which includes guidelines on bribery, antitrust, and a host of other topics. In the case of any breaches of compliance, we take appropriate remedial action. You can find more information in the SAP Integrated Report, Business Conduct section.

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How is SAP's sustainability department structured?

At SAP, we believe that it is not enough to simply have a sustainability strategy but that, instead, our overall corporate strategy must itself be sustainable. Only by achieving this can we fulfill our vision to help the world run better and improve people’s lives. We therefore strive to promote sustainability across our entire business. Led by our chief sustainability officer, a dedicated team works to embed sustainability into our corporate strategy and promotes new sustainability initiatives across the organization. Our chief financial officer (CFO) is the sponsor for sustainability on the Executive Board, and we also have a dedicated person in charge of sustainability in each area of the business. These individuals are responsible for embedding sustainability in their business practices, for example, by setting relevant targets and implementing related programs. They are held accountable for their achievements in review meetings with the CFO and the chief sustainability officer that take place twice a year.

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How does SAP ensure data privacy and security

We have implemented safeguards to help protect the fundamental rights of everyone whose data is processed by SAP, whether they are our customers, prospects, employees, or partners. In addition, we work towards compliance with all relevant legal requirements for data protection. Our secure software development lifecycle conforms to the ISO/IEC 27034 standard for application security and is closely embedded into our ISO 9001-certified process framework for developing standard software. Our secure operations strategy focuses on the security principles of “confidentiality, integrity, and availability” to support overall protection of our business, as well as our customers’ businesses.

Industry best-practice certifications are key success factors for our secure operations strategy. Many of our cloud solutions undergo Service Organization Control (SOC) audits ISAE3402, SSAE16 SOC I Type II, and SSAE16 SOC II Type II. The SOC standards are harmonized with a number of ISO certifications including ISO 9001, 27001, and 22301. SAP is committed to ensuring compliance with the harmonized European data protection law, the General Data Protection Regulation (GDPR). We have implemented a wide range of measures to protect data controlled by SAP and SAP customers from unauthorized access and processing, as well as from accidental loss or destruction. These include, among others, the implementation of our data protection management system (DPMS) in areas critical to data protection. This system is certified on a yearly basis by the British Standards Institute.

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