To continue to win in the extremely competitive software industry, in 2007, SAP invested almost U.S $1.5 billion in the development of the tools and technologies of tomorrow. Research and development projects are distributed globally across SAP's infrastructure.

SAP Research is our worldwide reseach organization that is dedicated to capitalizing on pioneering trends and technologies in IT that we can incorporate into the development of our products. The group consists of 13 interconnected research centers on five continents. Each research center is located in close proximity to an SAP development center or a university campus. SAP Research operates a model of co-innovation: Hand-in-hand with prestigious universities, partners, customers, and product development groups at SAP, SAP Research employees pursue groundbreaking ideas and create prototypes – always striving to generate the greatest possible customer value for future markets. To this end, single customers get involved early on in our research undertakings with special "lighthouse projects", and dedicated "living labs" demonstrate technological research in real world settings, thus making prospective SAP solutions a tangible experience.

In addition to the global research and development network, SAP Ventures invests in companies that develop promising technologies and applications. Independent from SAP's overall strategy, SAP Ventures has the freedom to pursue a portfolio of different opportunities and is therefore able to invest in entirely new fields that offer the promise of very high profitability. At the same time, it carries the benefit of SAP's knowledge and market experience, which it can pass on to its portfolio companies. Examples of investments from 2007 include AmberPoint, Coghead, GroundWork Open Source, Right Hemisphere, JasperSoft, PayScale, Alfresco, Greenplum, and Endeca.

In the search for innovation, key impulses come from within the company, specifically from our employees. The SAP Inspire program promotes our employees� creativity and entrepreneurial spirit by providing support for their revolutionary ideas. The program nurtures new concepts until they are ready for use in a product. Currently, we are in the process of extending the program and combining it with other initiatives to form a global incubator program that will connect innovation efforts from within SAP and the world outside.

SAP product development units are responsible for the entire SAP product and solution portfolio. With operations in Bulgaria, Germany, France, India, Israel, China, Japan, and North America, SAP development units integrate ideas and leading-edge technologies that address the needs of specific industries and geographic regions, and keep SAP and its customers at the forefront of business success.