The SAP Story: Evolution of SAP within the German Software Industry Timo Leimbach Fraunhofer Institute Systems and Innovation Research The success of the German company SAP and its enterprise software contradicts the widespread assumption of American dominance in the computer software industry. In this combined business and technology history of SAP, the author explores the individuals and ideas behind the concept of standardized, integrated business software and how SAP developed from a small company to a global market leader. ‘‘In fact, Germany was the only country besides the United States to have a significant player in software products.’’ 1 Martin Camp- bell-Kelly was referring, in his book on the software industry, to the German company Software AG, a company founded in Darm- stadt in 1969 that had early success in the American market with its Adabas database in the 1970s. Nonetheless, it is certain that he also had the story of SAP in mind, the only non-American case study detailed in his work. 2 This assessment of importance is affirmed by James Cortada, who cited Micro- soft and SAP as equitable examples in his latest work of the American economy’s digitaliza- tion, and by Alfred Chandler’s book on the ‘‘electronic century,’’ in which SAP is also mentioned. The limited substance of these works concerning SAP, however, quickly be- comes clear upon closer review. Little is known about SAP’s origins and its advancement to become the global leader in a crucial segment of the software market. 3,4 Like in the US, German historians often face problems in researching the origins of software companies. Many companies no longer exist, having since been dissolved or acquired. SAP itself has no main inventory of historical company documents. The analysis I present here is thus based primarily on oral interviews, along with business reports, docu- ments obtained by chance from within SAP, and contemporary magazine and newspaper articles. 5 The only other source literature bearing mention is a publication by Gerd Meissner, a former journalist for the news magazine Der Spiegel, and a number of hand- books and scientific research papers contain- ing scattered references to SAP’s history. 6 All this demonstrates the limits of any attempt to compile a company narrative: the evolution of SAP’s organizational structure, for example, cannot be depicted here because of the lack of sufficient documentation. I have founded my theoretical analysis of SAP on the widespread presumption in litera- ture that software industry success is based on cooperatives and other company networks. My reasons include the industry’s rapid tech- nological and strong economic dynamic. 7 This leads to recursive, nonlinear, multiphase in- novation processes characterized by signifi- cant uncertainty with regard to time, econom- ic and financial aspects, and scientific and technological aspects in both situation-based and strategic development. However, models that integrate both dynamics, the demand-pull (provoked by markets and customers) as well as the technology-push (innovation pressure triggered by scientific and technological de- velopment), are still exceptions to the rule. But companies often find themselves caught in a somewhat intermediary role between these two positions and the associated technologi- cal, strategic, and financial insecurities because they often face the problem of accommodat- ing influences from both sides under time and budget restrictions. To reduce this uncertainty, the theory of innovation networks assumes that companies join forces with each other and with other players—such as users, scientific research institutes, and state-run facilities—in self-or- ganized social networks. Such networks fea- ture relatively long-term, informal, personal, mutually interactive relationships based on trust between heterogeneous, autonomous, strategic, and interdependent entities volun- 60 IEEE Annals of the History of Computing Published by the IEEE Computer Society 1058-6180/08/$25.00 G 2008 IEEE