SAP's Succession Debate: To Soon To Tell
The enterprise software collective subconscious is working hard trying to figure out what will happen when SAP's top management faces some forthcoming deadlines about who is to succeed CEO Henning Kagermann in coming years. Sitting in a Berkeley coffee shop yesterday with two European business reporters, the Kagermann question came up again, and my hosts (they were buying the Peet's) were curious where I came down on the possibility that Shai Agassi, Leo Apotheker, or some unspecified outsider would soon assume the mantle at SAP.
Soon is the big question, with Kagermann's contract coming up for renewal this year. And the big answer is really that it's too soon to say. For one, I seriously doubt that Kagermann is ready to step aside. There was no apparent world-weariness when I had dinner with him last November, and no sense that there are better things that he could be doing -- no following in Hasso Plattner's footsteps sailing the seas or the like. And, more importantly, there is still a sense of mission and purpose that I believe will keep Kagermann at the helm for a couple more years at least. SAP is at the cusp of a huge inflection point -- multiple inflection points, really -- that will take a couple of years to really play out. And I don't see Kagermann giving up the opportunity to watch, and influence, the game that he has had such a large part creating. The competition with Oracle is too critical, the position of the company relating to key technology initiatives like SOA are too nascent, the overall opportunity to grow the SAP brand is too enormous for Kagermann to retire and watch from the sidelines. I say he's around for a good five more years at least.
The second big question is who would eventually succeed him, and, again, with the luxury of having decided that Kagermann is going nowhere, it's also too soon to say. The two obvious candidates that everyone has bandied about -- Agassi and Apotheker -- would both probably admit that the time isn't ripe for a major succession at this point. Either man would be a major asset to the company, but both are fulfilling equally important -- though less prestigious -- roles that need to be well-executed for the sake of the company as whole. And I believe that Agassi and Apotheker are more interested in maintaining the current momentum and settling the company's position in the marketplace than they are interested in the personal aggrandizement of taking over the world's top enterprise software company. There's time for entertaining those thoughts later.
Finally, just to finish a thought that started over coffee: would SAP ever bring in an outsider to take over when and if Kagermann leaves? My answer is no -- or, to be more precise -- only as an admission that something has gone terribly wrong with the company's direction. The strength of a German-managed company is the executive board that collectively helps run the company. This board has not just Agassi and Apotheker as members, but also some other serious talent in the form of Peter Zencke, Klaus Heinrich, and others. Whether in good times or bad, I think SAP would stick to promoting from within. And these and the other two board members would be the first choices, baring some catastrophe.
In the end, there will be no quick war of succession, not at SAP or Oracle or Microsoft, for that matter. All three of these companies are run by men who are still relatively young and still extremely focused on executing a comprehensive dream of extraordinary success. Until the dreams are realized, or played out, people like Kagermann, Larry Ellison, Bill Gates, or Steve Ballmer aren't going anywhere except to work every morning. There's still too much left to do.