Shai Agassi out at SAP

Shai Agassi out at SAP

Summary: SAP said Shai Agassi is stepping down as head of the company's product and technology group. Agassi's departure was by "mutual agreement with the company.

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TOPICS: SAP
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SAP said Shai Agassi is stepping down as head of the company's product and technology group. Agassi's departure was by "mutual agreement with the company."

Agassi is leaving to focus on alternative energy and climate change. He was one of the front runners to replace CEO Henning Kagermann.

The Wall Street Journal first reported Agassi's departure and SAP followed up with a statement about an hour later.

In the statement, SAP said it named Leo Apotheker deputy CEO and outlined the circumstances of Agassi's departure.

"While we regret Shai's decision to leave, we congratulate him on his record of achievement at SAP," said Hasso Plattner, chairman of the SAP Supervisory Board and company founder."Shai drove the company's successful platform strategy, led innovation that helped SAP grow and continue market leadership, as well as set the stage for the future of business software. I had shared with Shai my plan that he should become successor to Henning Kagermann as a co-CEO for SAP. With the extension of Henning's contract to 2009, it became apparent that Shai was not comfortable committing to a 10- to 15-year period, which was not in keeping with his personal career timeline. Given this, I made the recommendation to the Supervisory Board that we change our plans and now adjust SAP's executive management team responsibilities."

Kagermann noted that SAP has a strong development team in place to move the company toward a services oriented architecture model. Kagermann and Apotheker will split duties and direct reports under a new management structure.

Agassi's departure is effective April 1 and he'll remain with the company as a consultant.

Reaction to the news was swift. Goldman Sachs analyst Christopher Sailer said in a research note:

"Agassi has been the leading technology visionary at the company, following former CEO Hasso Plattner's move to chairman from day-to-day executive management, and Mr. Agassi has lead the integration of SAP's infrastructure technologies under NetWeaver as well as its industry solutions. Mr. Agassi's departure should have little effect on the upcoming hosted solution for the mid-market, "A1S," as Peter Zencke has been the driving force behind it.

The departure is likely to continue to dampen sentiment around the stock given disappointing 4Q performance and significant milestones ahead. Mr. Agassi is the most senior executive at SAP running the company's product and technology strategy, and SAP is likely to make management changes to fill this gap. Reshuffling management entails execution risk, and 2007 is a critical year for SAP to deliver on its Business Process Platform (BPP) roadmap. However, SAP retains senior level technology expertise with Hasso Platner chairman of the Supervisory Board and Peter Zencke."

In many respects, Agassi was the face of a more nimble SAP. You can expect Oracle, which is suing SAP, to spread some FUD over Agassi's departure.

Topic: SAP

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5 comments
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  • Truth = FUD?

    No, Oracle has accused SAP of theft, no FUD involved.
    No_Ax_to_Grind
    • Well said...

      I think that the timing is unfortunate for SAP; poor quarterly results, a theft lawsuit and the sudden resignation of an executive are tough to explain to shareholders.
      jojo26
  • Congratulations Shai

    "Agassi is leaving to focus on alternative energy and climate change."

    Here is one executive who should be heartily congratulated for realising that there are more important things in life than ERP software.

    Well done!
    jorwell
  • Not All Net in Weaver!

    The problem with SAP is that most people implementing the system simply do not know the functionality as it is provided. In the wake of implementations from 1994 to 2004 that have all had to Shut-up And Pay....SAP is left with an installed base in the sub Fortune 500 market that is less that pleased with Pie in the Sky ROI.

    NetWeaver ideas were never going to be a way to cover-up the sins of the fathers...and customers are beginning to realize that when the core system that SAP vends is in disarray.....NetWeaver simply adds incremental costs to an already too high total cost of ownership. Shai is good I am sure, but SAP needs to solidify its CORE R/3 product and ECC systems and make sure that existing customers are doing things right first. The consultant community overall is weak and weakening relative to the SAP product offerings because there is simply too much MUDA piled on top of a crumbling backend environment.

    Fortunately for SAP, the switching costs from SAP to Oracle or other systems is simply too high......better to dance with a misstepping devil that to see who is ready to tango in the singles market!!!!
    rbjabbour
  • Not All Net in Weaver!

    The problem with SAP is that most people implementing the system simply do not know the functionality as it is provided. In the wake of implementations from 1994 to 2004 that have all had to Shut-up And Pay....SAP is left with an installed base in the sub Fortune 500 market that is less than pleased with Pie in the Sky ROI.

    NetWeaver ideas were never going to be a way to cover-up the sins of the fathers...and customers are beginning to realize that when the core system that SAP vends is in disarray.....NetWeaver simply adds incremental costs to an already too high total cost of ownership. Shai is good I am sure, but SAP needs to solidify its CORE R/3 product and ECC systems and make sure that existing customers are doing things right first. The consultant community overall is weak and weakening relative to the SAP product offerings because there is simply too much MUDA piled on top of a crumbling backend environment.

    Fortunately for SAP, the switching costs from SAP to Oracle or other systems is simply too high......better to dance with a misstepping devil than to see who is ready to tango in the singles market!!!!
    rbjabbour