SAP at 50: The software group is at a crossroads

These days, the town of Walldorf is not really in the mood to celebrate — even though the managers of SAP, which is headquartered there, have every reason to do so. After all, the software giant can look back on 50 years of successful company history. On April 1, 1972, five former IBM employees — Claus Wellenreuther, Hans-Werner Hector, Klaus Tschira, Dietmar Hopp and Hasso Plattner — launched SAP Systemanalyse und Programmentwicklung GbR. The foundation stone for the largest and most successful European software manufacturer was laid.

Half a century is an eternity in the otherwise fast-moving IT and software business. New technologies can sweep established providers from the market overnight and allow new players to rise meteorically. SAP has weathered all the changes and storms on the market and has held its own to this day. As a result, the German software manufacturer plays in the premier league of global IT providers and can even look back on a longer history than the software giants Microsoft (founded in 1975) and Oracle (1977).

So the company should be in party mood for its 50th birthday. However, the current global crisis is putting a damper on SAP’s celebrations, particularly since the software company was quickly caught up in the maelstrom of war following Russia’s brutal attack on neighboring Ukraine, which violated international law. The call for help from the Ukrainian government, led by President Volodymyr Zelensky, also went out to the world’s major software manufacturers — including SAP. Ukraine urgently called on Microsoft, Oracle, SAP, and others to cease doing business in Russia and thus stop supporting the war machine of Russian autocrat Vladimir Putin.

The appeal met with a sympathetic hearing at SAP. Chief Executive Officer Christian Klein strongly condemned the Russian assault: “An act as inhumane and unjustified as this is an attack on democracy and humanity,” he said in early March. “Its consequences affect us all.” Klein stressed the importance of economic sanctions against Russia. “We are in constant exchange with governments around the world, have every confidence in their guidance, and fully support the actions taken so far. We are stopping business in Russia and Belarus aligned with sanctions and, in addition, pausing all sales of SAP services and products in Russia.”

However, the leadership in Walldorf also seemed somewhat overwhelmed by the war situation and the publicity it was generating. The phones wouldn’t stop ringing after Zelensky approached SAP directly, insiders report. Discussions were raised about how far the consequences should go. To shut down the SAP cloud there? What about facilities such as hospitals or drug manufacturers in Russia that run SAP software? Drawing a clear line here was apparently difficult for SAP management. But in view of the brutal actions of the Russian army, the pressure was mounting. That’s why SAP stepped up its game once again and announced at the end of March that it would also discontinue its cloud operations in Russia.  

The software provider announced that it would continue to support the Ukrainian government and aid organizations with its own products. In addition, SAP has already collected more than €3 million in donations. More than 4,000 SAP employees have offered housing and other assistance to refugees from Ukraine. SAP also plans to provide office space to store donations such as medicine and food. “We stand united alongside the global community in all efforts to end this unjust war in Ukraine, and we continue to do everything we can to restore peace,” is the clear message from Walldorf.