What is SAP? Where SAP software is used? Guide for beginners

The term SAP is too common in the IT sector. Thus those who choose career in IT always search for what SAP is. Thus this article is intended for such people who intends for it.

SAP is not a single term. Even though we for convenience call it SAP, it should be called S. A. P. It is actually a German Company and thus this word is of a German origin. The expansion of SAP is Systems Applications Products in Data Processing. Even though, it not being a single term, majority calls it as single word. SAP SE is a Company formed in Germany in 1972 by 5 friends. The products of this Company were mainly linked to Business related functions such as, ERP, CRM, financial and the like. Thus they cover all business functionalities.

What is SAP?

How the SAP Company was formed?

In 1971, XEROX company while stopping their hardware business, they wanted their complete business process to be changed to IBM technology, thus outsourced it to IBM. After a span of time, IBM decided to stop this project. 5 friends were dedicatedly working in this development for XEROX with IBM, were so inspired by the scope of this work. They literally wanted to explore its possibilities and thus quit their job with IBM. They formed a partnership Company in 1972, known as SAP, which is now one of the biggest software development multinational Companies in the World. In 1972, while starting the Company, it was named as System Analyses and Software Development. It was known as SAP GBR, in German. As the Company grew, the name of it was undergoing change and ended in being named as SAP GMBH, and known as SAP SE.

The first client of the Company was Imperial Chemical Industries, for developing their payroll and accounting software. In those days, all Companies including IBM, data was stored in punch cards. The data analysis in punch cards took more time and thus this Company adopted a new method of centralized data concept, where all data were stored in a single database. This movement led to the growth of the Company.

In those days a Company was using different software for different department functionality. That is separate software for each department such as accounts department using one software, sales using separate software, and customer relations using another and so on. There was no centralized integration between the departments. If one customer contacts a department for a service or requirement, it may be necessary for that particular department to contact the other for checking the availability. That was not happening with these software as there was no data synchronization happening between the departments. As a result, ERP was evolved, where all functionalities were clubbed together under one umbrella. Likewise was the evolution of SAP.  SAP grew as a ERP software. It stored centralized data, where all functionality of all Company was stored under it.

In 1973, SAP launched their first accounting system, which had all centralized data for accounting system that was called SAP R1, their first version. Adding and working on this system and upgrading it with other functionalities like material management, production planning etc, they launched their second version, SAP R2, in 1979. Later in 1992, they launched SAP R3. They kept working on it and thus they have the unbeatable software that can handle any complex business functionalities. It shall be the biggest software that has N number of modules and functionalities. The best thing is all these were being worked in the most efficient and new technologies. They work on the latest technologies such as Cloud based, In memory database concept etc.

According to the reports of 2001, SAP is the third biggest software development Company. As per the records, they have more than 4, 25,000 clients spread in more than 150 countries.  

Now we have the idea as to how the company was formed and their growth chart. Even though they started as ERP software, now they have their foot on CRM and all other functionalities. Consequently they have diversified products on to their success list. In the line of business, they had acquired many Companies during their growth. They strengthened as they acquired cloud computing companies and also have tie ups with many other Companies as well. Their main competitors in ERP are Oracle, Micro Dynamics, but the majority share of market share is still with SAP.

The product details and their module details have been discussed in other articles. See the article about SAP products

Majority people look up to it as their career because, this software has majority share in the market and also many Companies use this software. There are plenty of openings in its development side as well as their operation side. Its implementation, technical and functional wings always call in for many openings as many are required for its functioning. Thus it stands as one of the biggest career in IT sector. Moreover, this career seems to be very highly paid also. Many online resources, online classes or regular classes for institutes are providing training for SAP. Also SAP, does provide its online certification directly for those who have completed the training. We have cover almost all aspects a beginner need to know about SAP. For more details, our other articles on SAP can help you. See the tutorial about modules in SAP.

Check SAP official website