SAP was established in 1972 in Germany by five entrepreneurs who had a vision for the business potential of a technology. Fifteen years later the company had grown to a couple of hundred employees and reported sales of nearly 150 million Deutsche Mark. In fact SAP was still a very German organization – extremely product-oriented and quality-focused. Most of its profits were invested back into the product development.
In 1988 SAP converted into a publicly traded company and was ready to take on the world. It was then when SAP decided to embark on Marketing, even though at that time marketing meant mainly Events and Collateral. Marketing collateral, called silver brochures were not even free. Customers needed to pay for them like for all marketing activities such as events and trade shows attendance. Perceiving marketing as something more than a cost center was born right there.
The first SAP operation outside Germany was established in the mid-1980s with the creation of a Swiss-based subsidiary, SAP International, in Biel, Switzerland. SAP got a good deal from the city, which went almost bust after the Watch Crisis, and offered many tax and other benefits to new companies. The expansion, that would make SAP a truly international player in the global client-server software market, had just started.
In 1988 SAP America was founded in Philadelphia, and was initially staffed with transplanted German managers. However, the SAP executives soon realized that an American team was more likely to succeed in the new business world of America and began hiring US professionals. One important result turned out to be the abandonment of traditional German business practices in favor of a more American approach: lifting limits, for example, on how much salespeople could earn in commissions and submitting budgets in which one-third of all annual resources were devoted to product marketing. Fueled by the release of R/3 in 1992, SAP America began to grow and soon became SAP AG’s most profitable subsidiary.
Now back to Marketing. I have 3 interesting stories, which illustrate the marketing challenges that SAP was facing on its way to becoming a global player.
German Engineering and Coca Cola
It was I believe one of the first press interviews in a leading American business paper where one of SAP’s founders – Hasso Plattner was interviewed.
‘We Germans could never invent such a simple product as Coca Cola. The more complex, the better’.
Well, the journalist was certainly stunned by this statement. People immediately started talking how dare Hasso speak about such an iconic brand as Coke so ironically. But the truth was that Hasso simply wanted to emphasize the quality and the pride of the German engineering. So much about lost in translation.
CEO and Mathematical Formulas
Another interesting incident was an interview with Prof. Dr. Henning Kagermann, former CEO of SAP, during SAPPHIRE. Henning is a very kind, hardworking and structured executive. The interview started well with questions about innovation and globalization. At the end of the interview the journalist asked Henning if he could ask a personal question. Henning agreed and the journalist asked him, when he was not working on a weekend, which seemed to be rare, what would he do in his spare time? Henning reflected for a moment and said:
‘If all work is done on Sunday after lunch he would take out some of his old books from school and try to see if he can still solve the mathematical problems’
He once told us it was a good training for the mind. You can imagine the surprise in the journalist’s eyes when he heard that. He told me later that usually executives at this level rather talk about Elephant Hunting Trips to Africa or Sailing around Antarctica. I told the reporter that this is the real Henning and that our CEO reflects the diversity and humbleness of SAP in a positive way.
Demand Generation and Fax Machines
It was one of the first global Marketing Meetings ever staged in Walldorf. I was a very very young guy barely able to spell the word marketing in the late eighties. Hasso Plattner was chairing the meeting and we were not more than 12 global marketing colleagues. At that time we were considered a cost center and were not much respected. Nevertheless we had ideas, we were creative and loved working for a global company with great values and customer focus. In the opening statement Hasso told us:
‘You guys are all very young and energetic with lots of ideas but let me tell you how we do marketing in SAP.’ ‘We wait at the Fax machine until an order comes in’. Our products sell for themselves – they are made with and for the customer and have no flaws’
The good thing is that Hasso had to leave the meeting due to a customer call and we continued with our brave plans and ideas to tell the world that SAP is not the biggest secret ever.