history

SAP was founded in 1972 as Systemanalyse und Programmentwicklung ("System Analysis and Program Development") by five former IBM engineers in Mannheim, Baden-Württemberg (Dietmar Hopp, Hans-Werner Hector, Hasso Plattner, Klaus E. Tschira, and Claus Wellenreuther).

As part of the Xerox exit strategy from the computer industry, Xerox retained IBM to migrate their business systems to IBM technology. As part of IBM's compensation for the migration, IBM acquired the SDS/SAPE software, reportedly for a contract credit of $80,000. The SAPE software was given by IBM to the founding ex-IBM employees in exchange for founding stock provided to IBM, reportedly 8%. Imperial Chemical Industries (ICI) was SAP's first ever customer in 1972.

The acronym was later changed to stand for Systeme, Anwendungen und Produkte in der Datenverarbeitung ("Systems, Applications and Products in Data Processing").

In 1976, "SAP GmbH" was founded and the following year, it moved its headquarters to Walldorf. SAP AG became the company's official name after the 2005 annual general meeting (AG is short for Aktiengesellschaft).