SAP on Tuesday named Bill McDermott sole CEO of the enterprise applications giant. McDermott is the first American to run the company.
McDermott, a co-CEO since 2010 alongside Jim Hagerman Snabe, takes over amid a series of inflection points for SAP.
- SAP is transitioning .
- There's turnover among management as the company .
- SAP has to grow its HANA and cloud subscriptions at a rate fast enough to offset slowing application licensing over time. Does ? Is ?
- And SAP has to convince customers that it's an innovation partner in the long run as competition escalates in everything from CRM to human capital management to its core ERP.
The other wrinkle is that McDermott is from the sales side of SAP and has to win over the engineering crew based in Germany. SAP's tech lead, Vishal Sikka,and Shawn Price, president of SAP's cloud and line of business sales, also departed. In addition, SAP is rebalancing its workforce as it transitions to be more of a cloud player.
McDermott's big pitch to customers about those aforementioned inflection points begins at SAP's Sapphire conference in Orlando at the beginning of June.
For now, analysts are seeing SAP's moving parts as a reason for caution. However, McDermott's appointment as sole CEO may also indicate that SAP has become more global.
Speaking at SAP's Annual General Meeting of Shareholders on Wednesday, McDermott said:
"[Snabe's] vision and leadership have been instrumental in reinventing SAP and making it the company it is today. He has earned an extremely high level of respect, not only from our global customers, but also our employees. For his personal integrity, openness and always down-to-earth leadership style.
It has been the highlight of my professional career to work alongside Jim as co-CEO.
I’m honoured to build on the achievements of my esteemed colleagues and have your trust and support going forward as SAP’s sole CEO."
JMP Securities analyst Patrick Walravens said in a research note about SAP's management changes:
"Our view is that co-CEO Bill McDermott is consolidating his control as he prepares to become sole CEO in May – the fact that SAP is allowing an American to become sole CEO is quite a testament to how much this business has changed and globalized – such a thing would have been unthinkable 10 years ago."
It's hard to argue with Walravens' assessment.
Unfortunately, there are no fast conclusions in the SAP saga and McDermott's tenure. SAP and how it manages its culture, a cloud transition and innovates on the mobile front are a work in progress. McDermott's heavy lifting is just getting started.