In a tightly worded press release, SAP has announced that Leo Apotheker has resigned as CEO with immediate effect:
"The SAP Executive Board, in agreement with the SAP Supervisory Board, has appointed two Co-CEOs: Bill McDermott, head of field organization and Jim Hagemann Snabe, head of product development, both already members of the SAP Executive Board.
In addition, Vishal Sikka, Chief Technology Officer, has been appointed to the SAP Executive Board. At the request of the SAP Supervisory Board, Hasso Plattner, Co-Founder of SAP and Chairman of the SAP Supervisory Board, will continue to play a strong role in advising the new leaders on technology and product development."
It won't take a nano-second for the enterprise pundit tongues to start wagging. I'll kick it off. Leo's departure has long been predicted. In private conversations stretching back to last fall, I initially thought he would survive through SAPPHIRE but more recently thought the company would get the Q4 earnings out the way and then make changes. So it seems.
The choice of new leaders should not be surprising but hardly imaginative. In effect, SAP has chosen 'last men standing' rather than taking what some of us thought might be a bold move by appointing an outsider.
Leo won't be missed at Walldorf. As a sales person there was no way he could realistically bring the powerful engineering groups under control. Under Jim Snabe's leadership, supported by Vishal Sikka and underpinned by Hasso Platter, there is reason to hope that this group will be brought into the 21st century rather than continuing to behave as the entitlement group they had become.
Including Bill McDermott as co-CEO is a smart move. It reinforces the need for SAP to be seen as more sales led, especially as it gears up for the general release of Business ByDesign.
There will be a conference call on Monday 8th February at 8.30am ET to discuss the changes. More later.
Though a seasoned executive with over 20 years with SAP, Leo was in the wrong time wrong place. He was responsible for doing a bang up job in sales when Henning Kagermann (i.e. the former CEO) was around. In fact, he made Henning look good despite the difficulties in launching mySAP ERP 2007, SAP ByD, and a host of other failed projects. Unfortunately, he entered a down market while in charge of a sinking ship. Low morale among the Walldorf engineering team, the issue with Enterprise Support and maintenance, and uncontrollable poor quarterly performance proved to be factors beyond his control. Customers over the past 2 to 3 years began to wonder how to tap SAP’s innovation. A clear need emerged for having more technologists at the helm.
UPDATE 2: Forrester's Paul Hamerman says the co-CEO route seems a 'stopgap' and that outside visionary leadership is needed:
What SAP needs at this time is more charismatic and visionary leadership. In this new configuration, McDermott will evidently provide the charisma and Snabe the vision for innovation. We shall see how well this works over the next year or so. For SAP to get back on track and reassert market leadership on all fronts, it may need to continue to look for a strong leader from the outside.
UPDATE 3: Vinnie Mirchandani talks about the impossibile position in which Leo found himself and challenges the new leadership to change:
Are they ready to dismantle the past, seriously put their weight behind cloud computing and take on the partners who add little value?
Thomas Wailgum talks about SAP's succession planning that seems to have gone wrong. It went wrong a long time ago.