Léo Apotheker’s Leadership Opportunity: SAP At the Crossroads

Léo Apotheker is slated to take over the helm of SAP this January, and while many have worked with him, broken bread with him, and generally admired his business acumen and very successful career, there’s one problem with his ascension to the top executive position in the enterprise software market: No one knows what Léo actually plans to do when he takes over.

Sure there are some indications here and there, and some basic notions like “grow market share”, “grow stock price”, “grow revenues and customers” that go without saying, but beyond those generalities, there is little known – or said – about what the Apotheker Era will look like.

I’ve written about what I think he has to do already – but my guesswork doesn’t replace some specific direction about where he plans to take the company, its customers, its employees, and its partners. Not to mention his competitors and shareholders. There’s no doubt he will have his hands full – a resurgent Oracle, more nasty allegations about SAP’s conduct in the TomorrowNow suit, a spasmodic global economy, a complicated merger with BusinessObjects, restless customers – and his carefully weighed words will by necessity be even more carefully weighed as he tries to sort these issues out.

But having just had my nth conversation with an SAP employee on the subject of the Apotheker Era, which followed quickly upon a similar nth conversation with an SAP customer and an SAP partner, I think it’s time for Léo to make a statement about what he plans to do, and make that statement now.

I’ve even prepared a draft for him to try on for size, it goes like this:

Welcome to the new SAP, which promises to be much like the old SAP, only better. My name is Léo Apotheker. For the record, Léo rhymes with mayo, and Apotheker rhymes with… nothing, so just call me Léo. Please try to pronounce (and spell it) it correctly. I promise I’ll be gracious if you get it wrong and appreciative if you get it right.

We have a lot of challenges ahead of us, and together we’re going to surmount them. We also have a lot of opportunities, and together we’re going to take advantage of them and make the company grow significantly. We’ve been executing well, and our stock price is leading the market in terms of maintaining its value in the last quarter. My primary goal is to maintain this momentum in the market, and keep moving the company forward, despite the economic uncertainty: we can and will continue to prove that investing in SAP products can improve productivity and profitability, even in a down market. .

Now let’s talk specifics, and I’ll address comments to each of my stakeholders, as well as my competitors.

To my employees: There will be no shakeups, no layoffs, no restructuring. Your jobs are safe, so stop worrying and speculating and get back to work. We’ll be watching closely to make sure we improve overall productivity and revenues per employee, as well as our margins, so don’t think for a minute you can relax: we expect to keep working as hard or harder than we do now. Most importantly, my goal is to maintain our key initiatives pretty much as-is for now: we will be reviewing and modifying our strategy going forward, but the processes will be very similar to what we’ve used before, which means there will be no rocking the boat for the foreseeable future. On January 1, 2009, the biggest change you’ll see is…no change.

To my customers: Your priorities will be our priorities, and the first thing I’m going to do is make sure everyone one of you understands the value of the license and maintenance revenue you’re paying us. We didn’t do a good job of explaining why we upped your maintenance to 22 percent, and we owe you a better explanation of what in it’s for you than we’ve done to date. The second thing I’m going to do is make sure you understand how our existing products and our roadmap give you competitive advantage today and in the future. The third thing I’m going to do is commit to lower your total cost of ownership significantly. And the fourth thing I’m going to do is listen to you more than ever before. This company cannot exist without happy, satisfied customers, and my number one goal is to make sure every customer fits that description.

To my partners: Mi ecosystem es tu ecosystem. Together we have a tremendous competitive advantage, and the work our ecosystem team is doing is unlike anything in the industry. We’re going to keep moving towards an ecosystem that is healthy, symbiotic, and not just about making SAP look good. You’ll get a bigger stake in the growing market with us. Just hang in there while we get a few more kinks out of the system: once we’re ready, we’ll take it to the bank, together.

To my competitors: That stumble we announced earlier this year regarding Business ByDesign was just that, a stumble. We’re coming back to the table with an invigorated and highly competitive BBD next year, along with a half-dozen other market-shaking innovations. We also have an existing portfolio of innovative products, products that have suffered from a lack of strategic focus, that we’re going to put some marketing clout behind. We’re going to catch up in social media, we’re going to maintain our lead in vertical industry functionality, and we’re going to make the fruit of our Business Objects acquisition your worst nightmare. We’re going to change the market’s thinking about the necessity of Oracle’s database, make our total cost of ownership unrivaled in the industry, and we’re going make sure that our users are the most productive and the most efficient in the industry. And we’re going to be a lot less shy and quiet about it. Mark my words. This is your last warning.

To my shareholders: I promise more of the relative value you’ve seen in the last three months, during which our stock price has grown 5 percent, compared to competitors like Oracle and Salesforce.com that have taken a 20 - 25 percent hit. If we can focus on the above goals and make them real, we’ll be taking marketshare and returning profits that ought to make the market skeptics shut up once and for all. Hang in there, it’s going to be a great ride up.

In sum, the coming years will see a bigger, stronger, more influential SAP than ever before. And we’ll do it the SAP way: calmly, deliberately, steadfastly. Or my name isn’t Léo Apotheker.

Thanks for listening.

Would Léo ever actually say these things? Hard to tell – as I’ve said, not a lot is known about what he’s really thinking. But if he doesn’t say something to this effect, and say it soon, my sense is that it will be a cold day in January when he finally takes over the helm Personally, I think SAP would be better served by getting off to a hot start to the Apotheker Era. The sooner, the better.