Gartner | SAP: New CEO Means More Products, More Acquisitions Likely

On 2 April 2008, Germany-based software company SAP announced the appointment of Leo Apotheker, previously SAP deputy CEO, to co-CEO, effective immediately. Additionally, SAP announced three new board members, effective 1 July 2008. Analysis In April 2007, following Shai Agassi's departure, Leo Apotheker, then president of customer solutions and operations, was appointed deputy CEO and was thus anointed as the likely successor to current CEO Henning Kagermann. With this new appointment, SAP passes into Apotheker's hands, and things will remain relatively stable at least until Apotheker assumes the sole CEO role. Leo Apotheker's key task will be to boost sales for SAP. After years of developing the technology and platform to provide a single product strategy, SAP has executed a subtle shift to a portfolio strategy. The launch of Business ByDesign and the acquisition of Business Objects are manifestations of that shift, and these appointments will continue that trajectory. Until the Business Objects acquisition, SAP had acquired mostly small vendors, with functionality that filled a small, but specific hole in SAP capability. The Business Objects acquisition not only brought additional capabilities and product overlaps but also brought SAP a new and growing segment of business users. The appointment of Leo Apotheker, who has a sales background, to co-CEO, and the board appointments of others who also have sales backgrounds — Bill McDermott, now in charge of global sales, Erwin Gunst, now Chief Operating Officer, and Jim Hagemann Snabe, newly appointed head of development — will significantly fortify the sales orientation of the SAP executive team. This change in the makeup of the board will likely accelerate SAP's move to a portfolio approach and may make it more acquisitive, as SAP searches for additional products that can be quickly added to its price list. The challenge for SAP will be the continued rationalization of current product overlaps, product development alignment and innovation, and management of a multiproduct company. These challenges also face competitors such as IBM and Oracle.

Recommendations

SAP customers and prospects: Continue to push SAP for clarity and commitment regarding future functional requirements as SAP juggles investments among the major pieces of its portfolio — Business ByDesign, Business Optimization Platform and the traditional business applications. http://www.gartner.com/DisplayDocument?doc_cd=157016&ref=g_homelink