SAP AG primarily uses its worldwide network of subsidiaries to market and distribute SAP products and services locally. Those subsidiaries have entered into license agreements with SAP AG pursuant to which the subsidiary acquires the right to sublicense SAP AG's products to customers within a specific territory and agrees to provide primary support to those customers. Under these agreements, the subsidiaries retain a certain percentage of the revenue generated by the sublicensing activity.

We began operating in the United States in 1988 through SAP America, Inc., a wholly-owned subsidiary of SAP AG. Since then, the U.S. has become one of our most important geographic regions.

In certain countries, we have established distribution agreements with independent resellers rather than with subsidiaries. In addition to our subsidiaries' sales forces, SAP has developed an independent sales and support force through value-added resellers who assume responsibility for the licensing, implementation, and support of SAP solutions, particularly the SAP Business One application and qualified SAP Business All-in-One partner solutions.

Capitalizing on the possibilities of the Internet, we actively make use of online marketing. Some of our solutions can be tested online via the Internet demonstration and evaluation system, which also offers special services to introduce customers and prospects to new solutions and services.