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SAP Parts Ways with the Pharmacist

SAP is having trouble feeding off of its own fat. The big German enterprise software firm has struggled of late, in part because its customers are sick of SAP salespeople repeatedly trying to foist more SAP technology on them. (It doesn't help that SAP's stuff tends to be huge, expensive, and, uh, problematic to install to begin with.)

All of that is a problem for SAP because the company has spent years now largely (maybe mostly) selling back into its existing customer base, which is massive and includes most of the big companies in the world in one way or another. The vendor fell way behind in terms of cloud innovation, effectively scrapping its software-as-a-service Business ByDesign initiative (or so we've heard) and failing to move down market as effectively as it would have liked. Supposedly Business ByDesign is going to make a grand return (entrance, really) in 2010. We'll see. (Incidentally, SAP has been talking about moving down market for at least a decade now and hasn't really ever been able to do it in a significant way.)

The year 2009 was a tough one for SAP financially, so with customers grousing and important initiatives falling by the wayside, a head had to roll. The head in this case was that of Leo Apotheker, whose family name means "pharmacist" in German. (See, Mrs. Fowler? I really am using my high school German in the real world. Danke.) Apotheker resigned -- suddenly, but not at all unexpectedly -- over the weekend.

There is good news and bad news coming from the periphery of this announcement for SAP. As for Apotheker, RCPU had little interaction with him. But your editor knew former CEO (and still founder and Chairman of SAP) Hasso Plattner pretty well some years back, so it's encouraging to read that Plattner will take a more active role in product development as part of the executive shuffle. Plattner is an extremely capable executive (to say the very least) and an experienced leader, and it's our observation here that SAP has never quite been the same since he stepped down from his full-time CEO duties about seven years ago. Think Bill Gates and Microsoft -- there's a similar dynamic there (no pun intended).

The not-so-good news is that SAP has decided to once again pursue a co-CEO strategy, settling up Bill McDermott and Jim Hagemann Snabe as joint chiefs of SAP. Now, SAP has gone the two-CEO route before, with Plattner and Henning Kagermann serving together in the late 1990s (although your editor kind of had the feeling back then that Hasso was the man), and with Kagermann and the Pharmacist himself teaming in 2008. Even though the model worked the first time -- although not so much the second -- we're not sure that the SAP mannschaft (it means "team" in German) needs two captains.

What SAP needs now is a clear vision of its future and somebody who can smooth relations with angry customers very quickly. Maybe McDermott and Hagemann Snabe are those guys -- but we're thinking that one visionary with a clear plan and more than a little charm would be a better choice than a two-headed leadership team. Maybe Hasso will have some serious influence in the executive's office. That would provide a positive influence for a company that's been floating rather aimlessly for the better part of a decade now.

Do you do business with SAP? What's your take on how SAP's executive moves will affect the company -- as well as Microsoft Dynamics? Send your thoughts to [email protected].

Posted by Lee Pender on February 08, 2010