SAP Expands R&D in Shanghai

SAP Labs Opens New China Facility in Anticipation of Increasing Staff Levels to Meet Growing Global Development and Support Needs

SHANGHAI, ChinaSAP AG (NYSE: SAP) today announced the opening of a new research and development (R&D) facility in Shanghai to accommodate an expected strong increase in R&D staff in the coming years. The opening of the new facility for the current staff of more than 400 employees marks a strong beginning to a year of investment and expansion for SAP Labs China, bolstering its position as a world-class software R&D laboratory of the same high standards as SAP development facilities around the world. Products designed and developed at SAP Labs China are intended not only for SAP customers in the Asia-Pacific region but also for Europe and the United States.

“Over the last eleven years the lab has benefited from China’s growing pool of world-class IT and R&D professionals and from collaboration with China’s most prestigious universities and academic institutions,” said Claus Heinrich, member of the executive board, SAP AG, who was in Shanghai for the opening of the facility. “This combination has enabled the lab to make the leap from a localization facility serving Chinese customers to one of SAP’s premier global development centers.”

The strong growth of SAP’s business in China has encouraged the company to increase its investment in local R&D operations. With a compound annual growth rate of 70 percent over the last nine years, SAP is one of the most profitable foreign companies in China. Officially established in November 2003, SAP Labs China has grown to become SAP’s fifth largest development center, after SAP Labs locations in Germany, India, the United States and Israel. The new facility, on which construction began in March 2005, will enable the labs to move out of its currently rented quarters and into a permanent home that can accommodate future growth. SAP Labs China will begin to occupy its new facilities as of March 2006.

SAP Labs China focuses on software development for small and midsize enterprises (SMEs) with R&D work that encompasses the entire product life cycle from market research through prototyping, development, rollout and support. Concepts originated by SAP Labs China—such as the SAP® Best Practices Baseline Package of implementation procedures, documentation and preconfiguration settings, and the recently developed toolkit for the SAP Safe Passage program—have gone on to become mainstream offerings used by SAP customers around the world.

The Shanghai location also acts as a regional technology and solution center supporting fast-growing markets across Asia, including Australia, China, Japan, Korea, New Zealand and India. As part of SAP’s worldwide network of R&D operations, SAP Labs China collaborates closely with other SAP research facilities around the world as well as with SAP’s global field operations, partners and customers.

About SAP Labs
SAP Labs researches, designs, and delivers leading-edge software applications that enhance and extend SAP® solutions. SAP Labs locations also serve as a host to SAP Custom Development, an SAP organization dedicated to globally delivering solutions and services tailored to SAP customers’ unique business requirements. By creating knowledge, encouraging innovation and investing in people and technology, SAP Labs develops solutions that enable SAP customers to improve their business processes and achieve their business objectives. SAP Labs represents a dynamic community within SAP’s global research and development organization, sharing insights and promoting creativity on a worldwide basis. With operations in Bulgaria, Canada, China, Germany, Hungary, India, Israel and the United States, SAP Labs integrates 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.

About SAP
SAP is the world’s leading provider of business software solutions*. Today, more than 32,000 customers in more than 120 countries run SAP® software—from distinct solutions addressing the needs of small and midsize enterprises to suite offerings for global organizations. Powered by the SAP NetWeaver® platform to drive innovation and enable business change, SAP business solutions help enterprises of all sizes around the world improve customer relationships, enhance partner collaboration and create efficiencies across their supply chains and business operations. SAP industry solutions support the unique business processes of more than 25 industries, including high tech, healthcare, retail, public sector and financial services. With subsidiaries in more than 50 countries, the company is listed on several exchanges, including the Frankfurt stock exchange and NYSE under the symbol “SAP.” (Additional information at <http://www.sap.com>)

(*) SAP defines business software solutions as comprising enterprise resource planning and related software solutions such as supply chain management, customer relationship management, product life-cycle management and supplier relationship management.

Any statements contained in this document that are not historical facts are forward-looking statements as defined in the U.S. Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “project,” “predict,” “should” and “will” and similar expressions as they relate to SAP are intended to identify such forward-looking statements. SAP undertakes no obligation to publicly update or revise any forward-looking statements. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations The factors that could affect SAP’s future financial results are discussed more fully in SAP’s filings with the U.S. Securities and Exchange Commission (“SEC”), including SAP’s most recent Annual Report on Form 20-F filed with the SEC. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates.

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