Supply Chain · Profile from Supply Chain Research Companion
SAP
The Walldorf, Germany software company whose enterprise resource planning (ERP) system is the system of record for a large share of the world's big manufacturers, retailers and distributors — founded on 1 Apr 1972 by five former IBM employees (from memory, verify date), made dominant by R/3 (1992), moved to the in-memory S/4HANA (2015) and, since 2021, to cloud subscriptions ("RISE with SAP"). Its US business, run from Newtown Square, Pennsylvania (verify), includes many of the US consumer-goods and industrial companies in this knowledge base — and some of its most cited failures: Hershey (Jul 1999), whose ~$112m SAP R/3–Manugistics–Siebel programme left ~$100m of Halloween orders unfilled; Waste Management, which sued SAP in 2008 (reported); Target Canada (2013–15), whose SAP-based replenishment ran on bad data; and Revlon (2018). In Europe the defining failure is Lidl, which abandoned its SAP for Retail project "eLWIS" in Jul 2018 after ~€500m of spending (reported). SAP's growth since 2021 has come from moving its installed base to the cloud ahead of the end-2027 end of mainstream maintenance for ECC 6.0 (extended maintenance to end-2030 at a premium; a conditional "transition option" for private-edition customers to 2033, announced 2025). In 2025 SAP reported revenue of €36.8bn, cloud revenue of €21.0bn (+23%) and non-IFRS operating profit of €10.4bn; in Q3 2026 revenue passed €10bn in a quarter for the first time (€10.27bn, +13%), with cloud revenue €6.67bn (+26%) and a current cloud backlog of €24.1bn (+28%) (company). It also settled US bribery charges for >$220m in Jan 2024 (DOJ and SEC).
At a glance
- Founded
- 1972 (1 Apr, from memory, verify) in Weinheim, Germany, by Dietmar Hopp, Hasso Plattner, Claus Wellenreuther, Klaus Tschira and Hans-Werner Hector, ex-IBM (well documented, not re-checked)
- Headquarters
- Walldorf, Germany; SAP America in Newtown Square, Pennsylvania (verify); major labs in Palo Alto, Bangalore and elsewhere
- Ownership / structure
- Listed (Frankfurt: SAP; NYSE ADRs since 1998, verify); founders (Plattner, Hopp, Tschira foundations) remain significant holders (verify current stakes); SE (European company) since 2014 (verify)
- Leadership (2026)
- Christian Klein (CEO; co-CEO from Oct 2019, sole CEO from Apr 2020, verify); Hasso Plattner chaired the supervisory board until 2024 (verify successor)
- Segments / lines
- Cloud ERP Suite (S/4HANA Cloud, RISE and GROW with SAP, and the modules sold with them); other cloud (SAP Business Network incl. Ariba, Concur, SuccessFactors, Business Technology Platform, Business Data Cloud); software licences and support (on-premise ECC and S/4HANA); services
- Scale
- 2025: total revenue €36,800m (+8%; +11% at constant currencies), cloud revenue €21,020m (+23%), current cloud backlog €21.05bn (+16%; +25% cc), total cloud backlog €77.29bn; Q3 2026: revenue €10,270m (+13%), cloud €6,668m (+26%), Cloud ERP Suite €5,924m (+29%), current cloud backlog €24,144m (+28%); 113,076 FTEs (30 Sep 2026) (company)
- Financials
- 2025: IFRS operating profit €9.83bn (margin 26.7%), non-IFRS €10.42bn (+28%), free cash flow €8.24bn (+95%); Q3 2026 IFRS operating profit €2,930m, non-IFRS €3,030m, FCF €1,718m; FY2026 outlook: cloud revenue at the upper end of €25.8–26.2bn (cc), non-IFRS operating profit €11.8–12.2bn (cc), FCF ~€10bn (company, 21 Oct 2026)
- Signature moves (incl. failures)
- Founding (1972); R/3 (1992); the Y2K wave and Hershey's go-live (1999, failure — customer side); the Waste Management suit and US implementation disputes (2008, failure); Ariba (2012, ~$4.3bn); S/4HANA and the 2027 deadline (2015–); Lidl eLWIS abandoned (2018, failure); Taulia (2022); restructuring, the FCPA settlement and the Business AI pivot (2024)
9 strategic moves analysed
Each one gets a full strategy file in the companion: context, the decision, the financing, what happened, and the lesson.
1972
Founding and Real Time Standard Software
Founding
1992
R3 Client Server ERP
Technology bet (new platform)
1999
Hershey Go Live and the Y2K Implementation Wave
Customer contract — failure (implementation at a flagship US customer)
2008
Waste Management Lawsuit and US Implementation Disputes
Regulatory or legal action — failure (customer lawsuit over a failed implementation)
2012
Ariba Acquisition
Acquisition (procurement software and supplier network)
2015
S4HANA and the 2027 Deadline
Technology bet (new ERP generation) and pricing/service change (maintenance deadlines, RISE with SAP)
2018
Lidl eLWIS Abandoned
Customer contract — failure (a flagship European retail implementation abandoned)
2022
Taulia Acquisition
Acquisition (working-capital and supply-chain finance software)
2024
Restructuring FCPA Settlement and Business AI
Restructuring / regulatory or legal action / strategy pivot (AI)