Five IBM engineers left to build the software IBM refused to build — and outgrew IBM

In the early 1970s, a team of IBM engineers in Mannheim developed a prototype for real-time enterprise software — a system that could process business transactions (accounting, payroll, inventory) as they happened, rather than in overnight batch runs. IBM's management decided the product was not a priority. The mainframe business was profitable; the new software was a distraction.

In 1972, five of the engineers — Dietmar Hopp, Hasso Plattner, Claus Wellenreuther, Klaus Tschira, and Hans-Werner Hector — left IBM and founded SAP (Systemanalyse und Programmentwicklung) in a small office in Mannheim. They pooled their savings. Their first client was a chemical company that needed real-time accounting. The software they built became SAP R/2, then R/3, then the enterprise resource planning (ERP) standard that runs most of the world's large companies.

The story is told in interviews and in Hasso Plattner's occasional public remarks: the decision to leave IBM was not a rebellion but a calculation. IBM had the idea, the engineers, and the customers. What IBM did not have was the willingness to cannibalise its own batch-processing revenue. The five founders had nothing to cannibalise, so they built the thing IBM would not.