Development of the SAP Gateway
The development of the SAP Gateway was driven by the need for mobile access to business data. Watch the following video on the development of the SAP Gateway.
Explaining the OData Standard
From a development perspective, an important aspect of the architecture of the World Wide Web is the use of abstract interfaces for component communication. These abstract interfaces are presented as connectors. A client and a server each use a connector component.
The connector defines the application protocol and parameters required for establishing a connection and determines how data can be exchanged. It defines the documents, their format, and behavior.

By using the connector concept, both client and server are largely independent and exchangeable. Each connector translates the documents exchanged on the communication channel to the internal representations both on the server and on the client side, and vice versa.
The Open Data Protocol, or OData, provides the framework for standardizing these communications and the exchange of data. For example, a connector attached to an SAP back-end system translates between ABAP APIs and OData entities. The SAP Gateway is such a connector.
On the other side, a client connector translates between OData entities and the APIs of the consumer platform. The connector is specified here. As a consequence, any client platform with libraries supporting the contracted OData format can communicate with any server supporting the same contract.
Now, let's look in more detail at the OData protocol.
The Open Data Protocol
As you saw in the previous video, OData is a widely-used standard that provides a way to access and manipulate data in a simple and structured way, making it easier for developers to work with data across different platforms and technologies.

OData is an open standard originally developed by Microsoft but now managed by the Oasis Organization. It is based on the Atom Publishing and Atom Syndication standards, which, in turn, are based on XML (Extensible Markup Language) and HTTP(S) (HyperText Transfer Protocol (Secure)). JSON (JavaScript Object Notation) is an alternative to XML to structure data.
OData follows the Representational State Transfer (REST) architecture design paradigm in the sense that the protocol transfers representations of the state of resources. The term resource denotes data that is addressable and accessible. The standard address representation or resource is the Uniform Resource Identifier (URI). A client requests a resource from a server by sending a request to a URI. The server processes the request by translating the URI to internal address data to access or manipulate the data, and then assemble the response.
The main objective of the OData protocol is to provide a vendor-neutral, web-based API that fully complies with the design principles of Representational State Transfer (REST). This provides SAP application development with several compelling benefits.

Additionally, OData provides database-like access to server-side resources. In this context, OData is equivalent to ODBC for the web.
Note
Open Database Connectivity (ODBC) is a widespread database access method.
Finally, OData is also extensible. This enables SAP to supplement the data types used by OData with extra information from the ABAP Data Dictionary. Another example is metadata-driven development for Web and mobile like SAP Fiori elements.
OData is available in version 2 (V2), version 3 (V3), and version 4 (V4). The versions are built on each other extending the previous version by adding new features. The majority of OData services are based on V2. SAP Gateway supports OData V2 since AS ABAP 7.00 and OData V4 since AS ABAP 7.50. OData V3 was skipped in SAP Gateway and is therefore not supported.