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A Primer on SAP AG and SAP

SAP AG refers to the name of one of the largest software companies in the world, often referred to simply as SAP. The company, consisting originally of ex-IBM folks with a vision of creating an integrated enterprise software solution, is based out of Germany and has been in business since 1972. SAP is also the tag given generically to software created and marketed by SAP AG. The company's most popular application package by far was called SAP R/3, which competed in the collaborative business solutions category of software. It was designed to facilitate business operations such as order entry, materials and warehouse management, logistics, sales and distribution, financial and asset accounting, human resource management, and more. Today, SAP R/3 continues to live on at thousands of customer sites, though many of SAP's customers have deployed one of several follow-on ERP products.

Other applications created and marketed by SAP have become quite popular as well. We will cover many of these in detail later, but suffice it to say that SAP has offerings in data warehousing (SAP NetWeaver Business Warehouse, which includes Business Information Warehouse, or SAP BW), supply chain management (Advanced Planner and Optimizer, or SAP APO), customer relationship management (SAP CRM), product lifecycle management (SAP PLM), business-to-business procurement (Supplier Relationship Management, or SAP SRM), and much more. Today, it can be safely said that if there is any system or software need in the enterprise, SAP probably offers a product to fill that need. This is a much different scenario from a decade ago, when SAP was a synonym for a single business application, namely SAP R/3.

A History Lesson

A quick history lesson is in order before we go further. SAP, like its biggest competitors (and partners, incidentally), Oracle and Microsoft, is a business application vendor. All three companies develop and sell software geared toward enabling firms to conduct their day-to-day business. Each provides enterprise-class business software, solutions for small and midsize businesses, platforms for web and application development, software for integrating different systems into one another, and more. SAP comes to the software table from the application side of the house, whereas Oracle has its roots in database management systems and Microsoft is best known for its operating systems and office productivity suite.

SAP was founded to bring forth a novel idea: to develop a software package that integrated and combined a company's myriad business functions together in a manner that reflected business or industry best practices. In this way, a company could replace 10 different business systems of record—such as financials, warehousing, production planning, and so on—with a single system of record, and in the process gain the synergies and communication benefits inherent to maintaining a single version of the truth. Their idea grew into what soon became Systems, Applications, and Products in Data Processing (SAP), or in German Systemanalyse und Programmentwicklung.

The original ex-IBM engineers quickly delivered on their vision to create a multilingual and multinational platform capable of being easily reconfigured from a functional perspective (to enable flexible business processes) as well as from an underlying information technology perspective. Within a decade, SAP was gaining market share through a groundswell of activity propelled by the software's capability to establish standardized business processes in large, complex organizations. After another decade, the company realized growth due to its business application's platform independence, particularly its capability to allow organizations to migrate away from proprietary mainframe solutions to less-expensive infrastructure choices. All the while, SAP's capabilities matured and its market share continued to grow. Today, SAP supports more than 40 languages, 50 currencies, nearly 30 industry solutions, and more than 20 different combinations of popular hardware platforms, operating systems, and database releases.

In less than 20 years after its inception, SAP not only was Germany's top software vendor but was giving IBM and others a serious challenge in the enterprise marketplace; new, large entrants to the enterprise software field emerged during this time, including Baan, Oracle Corporation, PeopleSoft, and JD Edwards. Soon afterward, smaller players began gaining ground as well, including Great Plains and Navision. Though still widespread, mainframes had simply grown too cumbersome and expensive for the majority of companies and other large organizations to deploy and operate. Instead, IT organizations found that smaller, UNIX-based hardware platforms represented better value, while databases from vendors such as Oracle and Informix offered nice alternatives to the old mainframe database offerings.

By the mid-1990s, when SAP began supporting Microsoft Windows and SQL Server, and soon afterward Linux, SAP's place in the enterprise software market was firmly planted—the company's founders had truly delivered on their vision of a multinational, multilingual business solution capable of running on diverse platforms operated and maintained by equally diverse IT organizations. SAP changed both the business and IT worlds faster than anyone would have dreamed possible only a few years earlier. Today, SAP solutions serve more than 82,000 customers across more than 120 countries. And with employees numbering close to 52,000, and a partner ecosystem of several hundred thousand, it's safe to say that SAP is one of the world's largest and most successful employers.

SAP Business Suite Components: The Big Picture

Back in the heady days of 1999 or so, when everything was "dot-com this" and "dot-com that," SAP was already years ahead of the game. R/3 had been Internet-enabled since the introduction of version 3.1G, and the timing was right for SAP AG to introduce a new e-enabled vision of its growing product line. Out of this vision came mySAP.com, an umbrella term used to refer to the entire breadth and depth of SAP's e-business solutions and products. Today, mySAP.com has evolved to reflect a broad collection of business solutions (or application families)—the SAP Business Suite.

The SAP Business Suite can be thought of as an umbrella encompassing a wealth of general business applications or functionality that represents in turn additional umbrellas underneath which lie specific point products. That is, underneath the SAP Business Suite umbrella are the actual software products that will eventually be used by an end-user community. These software products are generically referred to as components. The SAP Business Suite currently comprises five general business application families (see Figure 1.1):

  • SAP ERP (Enterprise Resource Planning)
  • SAP CRM (Customer Relationship Management)
  • SAP PLM (Product Lifecycle Management)
  • SAP SCM (Supply Chain Management)
  • SAP SRM (Supplier Relationship Management)
Figure 1.1

Figure 1.1 The SAP Business Suite.

How to Speak SAP: Terms and Terminology

We have already covered quite a few terms and acronyms. However, especially if you are new to or a bit rusty in using SAP's general terminology, you should understand the following list (don't worry about memorizing this right away—to keep the book useful to all levels of readers, we will continue to spell out acronyms and explain key terms throughout the book):

  • SAP component—One of SAP's business applications or other products (as opposed to an umbrella term that might instead reflect a group of applications such as SAP Financials).
  • Instance—An "installation" of an SAP product that equates to an SAP component with its own set of work processes.
  • SAP ERP—An online transaction processing (OLTP) system, the most popular and prevalent SAP component. It includes functionality such as Asset Management, Financial Accounting, Plant Maintenance, Production Planning, Quality Management, Sales and Distribution, Materials Management, Business Work Flow, and more.
  • Landscape—The collection of systems supporting a single solution (SAP component) such as CRM, PLM, SCM, and so on. Note that each solution requires its own SAP system landscape.
  • Three-System Landscape—Typically, each SAP solution requires a development environment, a quality assurance/test environment, and a production environment.
  • Central Instance (CI)—The main "SAP" installation in a system (as opposed to the "database server" installation or dedicated application server instances, and so on). The CI is responsible for managing locks, interserver messaging, and queuing and can be thought of as SAP's executables or binaries.
  • System—A collection of SAP instances. For example, an SAP ERP system may consist of a database instance, an SAP CI, two batch server instances (for processing batch or background jobs as opposed to real-time business transactions), and five application server instances (the instances used by end users executing their day-to-day work).
  • Client—A legal entity or "business" within an instance—this is what end users actually log in to with their unique user IDs and passwords.
  • SAPGUI—SAP's "classic" graphical user interface, which provides a Windows-like look and feel. Other accessibility options exist as well, including a number of web-based user interfaces.

Other terms, such as SAP NetWeaver and SAP in particular, require a more in-depth definition, even for this introductory chapter, and are covered in the next section. For a truly comprehensive list of SAP acronyms and terms, refer to Appendix B, "SAP Acronyms."

SAP NetWeaver: Enabling Business Solutions

Whereas SAP's business solutions (by way of the SAP Business Suite) represent the applications to be used by a community of end users, there's another set of SAP technologies and products developed to enable these solutions. Labeled under another umbrella called SAP NetWeaver, these are SAP's core underlying technology offerings that make it possible to tie together Business Suite components into a unified solution (see Figure 1.2). They include

  • Portal and collaboration components
  • Business intelligence, knowledge management, and master data management components
  • Application platform development tools (J2EE/Java and SAP's proprietary Advanced Business Application Programming, or ABAP)
Figure 1.2

Figure 1.2 SAP NetWeaver components.

SAP's NetWeaver Application Server, formerly Web Application Server (WebAS), acts as the technical foundation for most of SAP's components. Through the NetWeaver Application Server platform, SAP not only supports a variety of database and operating system alternatives but also enables communication with external applications created with Microsoft's .NET or IBM's WebSphere development tools. This gives SAP the capability to create extended enterprise solutions crossing diverse product and application classes.

SAP Component Naming Conventions

The underlying software components of any given solution are neatly prefaced with the simple term "SAP" or "SAP NetWeaver," as in SAP ERP HCM (SAP's Human Capital Management solution within the ERP component) or SAP NetWeaver BW (SAP's business intelligence offering). As you can tell, these products fall under the overall umbrella of either SAP NetWeaver components or SAP Business Suite components. To complicate matters, though, the term SAP is often misused to refer to any business or technical component developed by SAP. For the remainder of this book, we will continue to distinguish between SAP's Business Suite and its NetWeaver offerings. Keep in mind that others will use the term "SAP" to refer generically to any SAP product or component, or to the company itself.

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