Thursday’s announcements of additional SAP leadership changes raise more questions than they answer, but a commitment to changing the direction of the company is clear. SAP announced the departures of John Schwarz, head of the SAP Business Objects unit, and Erwin Gunst, Chief Operating Officer. Gerhard Oswald, Executive Board member in charge of global services and support, assumes the role of COO. In addition, Peter Lorenz has been promoted to Corporate Officer, looking after the SAP SME solutions portfolio. These moves follow the resignation CEO Leo Apotheker a few days ago, as well as the appointments of Bill McDermott and Jim Hagemann Snabe as co-CEOs.
Gunst’s departure, due to health reasons, was expected and was mentioned on Monday in a call with analysts and press. More surprising is the departure of Schwarz, formerly CEO of Business Objects, a respected executive who led the integration of Business Objects following SAP’s acquisition 2 years ago. It is appears that Schwarz’s departure had something to do with his not being named CEO or co-CEO, but the real reasons are likely more complex. SAP appears to be in the midst of a transition to younger and more energetic leadership, and Schwarz’s career may have had limited upside given that Executive Board members are encouraged to retire at age 60 (he’s 59).
The changes are consistent with Chairman and co-founder Hasso Plattner’s return to hands-on leadership of the company. The remaining SAP Executive Board members, co-CEOs McDermott and Snabe, CFO Werner Brandt, COO Oswald, and CTO Vishal Sikka, will be expected to carry out Plattner’s directives to restore the company’s momentum.
On Super Bowl Sunday, February 7, 2010, SAP announced that CEO Leo Apotheker’s contract will not be renewed and his resignation is effective immediately. In his place, the company appointed co-CEOs Jim Hagemann Snabe and Bill McDermott. Both executives are already members of the SAP Executive Board, with Snabe in charge of product development and McDermott in charge of field operations prior to their appointment as Co-CEOs. More importantly, perhaps, Supervisory Board Chairman and cofounder Hasso Plattner has stepped up to take a more active role in overseeing the company’s direction. Apotheker’s departure was not a surprise for most industry followers. His contract was up for renewal things were not going so well for SAP of late. Just a week and a half prior to today’s announcement, SAP reported its 2009 financial results, in which total revenue declined 9% for the year (to €10,671) and software revenues declined by 28%. During his watch, customers become disenchanted over the mandatory migration and price increase related to Enterprise Support, as well as overly aggressive sales of featured products, including analytics. Mr. Apotheker couldn’t have been expected to perform miracles in a down economy, and can’t be blamed for the false starts with Business ByDesign that he inherited. In fact, Business ByDesign has seen significant progress during his tenure and is now ready for market. In addition, Apotheker was instrumental in launching SAP’s strong commitment to sustainability during the past year. With the appointment of co-CEOs Snabe and McDermott, SAP continues a long-standing tradition of promoting CEOs from within. Co-CEOs, in fact, have been used before, most recently with Apotheker serving as co-CEO with his predecessor, Henning Kagermann, during the transition period leading up to Kagermann’s retirement.