SAP has been a part of my portfolio for a long time. I recently wrote on its acquisition of Signavio, a move I find very inspired! SAP was one of the first shares I ever bought. Understanding a huge company like SAP is a challenge. The annual report alone is some 270 pages long. So you can dig for weeks on end if you so desire. That is not what I do here because a) I just don’t have the time for that and b) I don’t think investment decisions should take weeks of research. My methodology is following what I outlined in my article here. So without further ado, let’s dig in. [Before, if you are the kind of person who needs a disclaimer, there is one at the end of this piece.]
The larger the company, the more diversified its products and activities tend to be and the harder it is to wrap your head around what exactly they are doing. SAP is a German technology company, focused mainly on enterprise software that revolves around resource planning, aka. ERP systems. They are in the midst of moving from on premise software to cloud software and intend to migrate their customers to their new product suite and database technology, S/4Hana. Besides their ERP system, SAP has a large portfolio of software solutions, including CRM systems (customer relationship management), SCM (supply chain management) and related products, and some industry specific solutions for all sorts of industries.
Some companies use SAP technology or products and tweak it in order to sell it to specific industries. This is the case for instance of Aareon, part of Aareal Bank, which provides an ERP system for the housing industry based on SAP.
Then there are a bunch of additional solutions. Actually, there is a Wikipedia article listing all those products: https://en.wikipedia.org/wiki/List_of_SAP_products
Typically, SAP solutions are the kind of software that one guy (or gal) or team or division in the company running it will be specifically trained to use. It is a powerful but hard to use tool, looking at the user interface alone gives most people the creeps.