‘Wrong place at wrong time’ for SAP's Apotheker

No longer SAP AG’s CEO after the company announced his resignation on Sunday, Leo Apotheker was likely in the wrong place at the wrong time as he tried, in a down market, to manage a sinking ship that really needed a technologist at the helm, said one analyst.

Ray Wang, partner with the enterprise strategy group with San Mateo, Calif.-based Altimeter Group LLC, said Apotheker deserves some credit for driving sales at a time when SAP was doing well, but that the problem currently is products, not sales.

“We are hearing he was not loved in Walldorf by the engineers but will be missed by the sales teams,” said Wang. “SAP needs a good technologist in place as they have to right-side the roadmap.”

The decision, disclosed by the German-based enterprise resource planning technology vendor on Sunday, sees SAP returning to a co-CEO structure with Jim Hagemann Snabe, head of product development, and Bill McDermott, head of the field organization. Also, chief technology officer Vishal Sikka was appointed to the executive board.

Wang said Apotheker’s departure could have been due to a variety of issues, including the need for a technologist, how customers were treated during the maintenance price hike, poor quarterly results, or a disagreement with company direction.

Not having a contract renewed is a serious thing by SAP’s standards considering the company prides itself on having good leadership transition plans, said Wang, who described Apotheker’s exit as “sudden.”

On Monday, SAP co-founder and chairman Hasso Platner, refused to divulge why Apotheker had resigned, instead choosing to list what were not the reasons. He said it’s not due to a lack of success with SAP’s Business ByDesign, with which Apotheker was instrumental in refocusing. He added that he is optimistic that this year will be a good one for Business ByDesign with the upcoming release of version 2.5.

Apotheker’s departure is also not due to a disagreement about company direction, said Platner. “There was no difference of opinion between Leo and myself on strategy,” he said.

The co-CEO approach is not a short-term solution for SAP, and while it’s not a common structure for North American companies, it has worked well for SAP in the past, said Platner. “For most of SAP’s history, we have lived that way even if it was not legally expressed that way,” he said.

Platner said he trusts that that new leadership will continue to execute on SAP’s strategy of focusing equally on growth, margins and innovation “because they fit together.”

In tandem with the announcement of Apotheker’s resignation, Platner committed to re-establishing trust internally and externally, and to building a “happy company” again.

All that will happen through changes to SAP’s management and development styles, said Platner. There will be fewer hierarchical levels and more agile project teams with a flat structure. And while SAP has traditionally favoured incremental improvement in product development, Platner said making “radical changes” will allow SAP to take advantage of upcoming dramatic shifts in technology like cloud, mobile and in-memory analytics.

Platner also sent a message out to end users, committing to making it easier to maintain existing infrastructures moving forward. “Please trust SAP, we have not forgotten you,” he said.

Wang said SAP has got to reward its customers and employees. The common customer complaints he hears are that SAP must complete its promised roadmap, make it easier and cheaper to own SAP, make it possible to extend existing platforms, perhaps through software as a service,and make it easier to build atop tools like NetWeaver.