Opening up of the Software Industry: The Case of SAP

With globalisation, outsourcing, changing regulations and rapid technological innovations, companies are forced to embrace more agile business architecture. This in turn calls for enterprise applications that are based on open standards, simple to implement, and easy to modify and upgrade. In response to these structural changes in the market and customer demands, and facing fierce competition in a saturated market, SAP had to rethink its strategic position. This case discusses how SAP transformed itself by turning its proprietary software products to an open development and integration platform so that customers could modify them to suit their specific needs. The implications of this new strategy for software industry as a whole are discussed.