SAP Solution Manager is a centralized support and system management suite. An SAP system landscape may include a large amount of installed SAP systems. SAP Solution Manager tries to reduce and centralize the management of these systems.

In such a landscape, SAP Solution Manager is the managing system, and the business suite applications (e.g. ERP, CRM, BI, EP) are the managed systems.

The current version of SAP Solution Manager is SAP Solution Manager 7.1.
SAP Solution Manager provides an extensive set of features in the IT Support area for enhancing, automating and improving the management of SAP systems:

Central System Administration
Project Management
Test Management
System Monitoring
Business Process Monitoring
E2E Root Cause Analysis
IT Technical Reporting
Centralized Alerting
Installation Keys
Early Watch Reporting
Change Management (Change Request Management & Maintenance Optimizer)
Service Desk

SAP is actively improving and extending all these areas, so this list may be outdated.

SAP Solution Manager helps in implementing and managing complex system landscapes. Globally, systems are being distributed across geographies and business processes cover more than one system. In such complex scenarios, integrating technical and business requirements is important for the success of IT. SAP Solution Manager provides SAP customers with an efficient means of handling both the technical and business process side of solution implementation.