Why SAP needs Kagermann for a while longer

SAP renewed CEO Henning Kagermann contract for 17 months. Now all the speculation about his successor can die down...

SAP renewed CEO Henning Kagermann contract for 17 months. Now all the speculation about his successor can die down...for a few weeks.

SAP's move says one thing: It didn't have a clear successor lined up and the favorite Leo Apotheker wasn't seasoned enough to fill the Kagermann's shoes.

The company line is a bit different. In a statement SAP said:

"The supervisory board again has expressed its confidence in Henning Kagermann and recognized his extraordinary achievements in leading SAP's successful strategy of organic growth during his tenure," said Hasso Plattner, chairman of the SAP Supervisory Board. "Under his guidance, SAP has significantly extended its global market leadership in the business software space while delivering breakthrough innovation in the software industry. We are committed to further pursuing this successful course."

Overall, it just made sense for SAP to buy some time and extend Kagermann's contract. Consider the moving parts:

  • SAP just rolled out a plan to target the mid-market and it is in a dogfight with Oracle.
  • The company may not need another CEO should it be acquired. It's a long shot, but those ill-fated talks between SAP and Microsoft still make a lot of sense.
  • SAP is also transitioning its products to a service oriented architecture platform.
  • Oracle would use Kagermann's exit to create FUD.

In other words, the last thing SAP needed right now was management distractions. Kagermann is a steady hand who can keep SAP focused on the task at hand.

Will this end speculation about SAP's next CEO? Doubtful. That said I might as well get a head start--Shah Agassi will be Kagermann's successor. He has the energy and moxie to take SAP forward as enterprise software evolves.

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