Strong sales focus as SAP shuffles the board

Strong sales focus as SAP shuffles the board

Summary: Following today's announcement of board changes at SAP, it is clear the company is looking to strengthen sales representation. As I suggested earlier Henning Kagermann will retire next May handing over the CEO's spot to Leo Apotheker.

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Following today's announcement of board changes at SAP, it is clear the company is looking to strengthen sales representation. As I suggested earlier Henning Kagermann will retire next May handing over the CEO's spot to Leo Apotheker. He will be supported by Bill McDermott who now has a global sales role for large enterprise as well as an overseeing sales role. Peter Klaey, who has been spearheading the Business By Design unit will take responsibility for smaller business sales.

In the last year, SAP has been fighting an uphill struggle for public mindshare as rival Oracle has successfully bedded down its acquisitions. This has seen Oracle accelerate revenues, which until recently had included healthy license sales growth. Strengthening the board in this way changes SAP's emphasis and I suspect it will mean the company becomes more aggressive in the sales cycle.

The appointment of Erwin (Ernie) Gunst as COO represents a further strengthening of SAPs sales team. On the call, co-founder Hasso Plattner said the company 'desperately' needed someone capable of moving internal processes forward that would get SAP closer to customers and speed up the sales cycle.

One huge surprise is that when Peter Zencke retires at the end of they year, he will not be replaced. Plattner said Zencke's duties will be distributed around the other board members. Zencke will retain a consulting role. Zencke is the man who led the Business By Design engineering effort and not having a direct replacement is a mis-step if SAP is to achieve the large numbers of sales it has been predicting. Whether Klaey can take up the sales slack remains to be seen, but with a de-emphasis on design and engineering, it is hard to see how SAP will maintain the momentum for this product line which is only at version 1 status. SAP will argue that its bench depth will mean the company doesn't miss a beat but I would be surprised if that's the case.

UPDATE: I subsequently spoke with Redmonk analyst James Governor. His view was broadly similar to mine. He added: "I don't know anyone who is intimately involved with SAP as a buyer who doesn't admire the engineering effort the company puts into its products. I hope this doesn't signal a reaction to Oracle and that the engineering effort will continue.  The company has plenty of talent it can promote, that's evident from the changes it has announced today. It's for that reason that I'm less concerned about Business By Design."

Topics: CXO, Enterprise Software, Legal, SAP

Dennis Howlett

About Dennis Howlett

Dennis Howlett is a 40 year veteran in enterprise IT, working with companies large and small across many industries. He endeavors to inform buyers in a no-nonsense manner and spares no vendor that comes under his microscope.

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7 comments
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  • Zencke

    Zencke was a force at that company. He had the ability to get people deep inside engineering to move on customer problems quickly. He was one of the few people, inside the company that can easily turn the ocean liner of engineers in WDF. I am sad to hear he is leaving.
    dan_mcweeney
    • Consulting

      He will retain a consulting role but the more important point is that there is no-one being appointed to pick up the slack. I really think that's a mis-step.
      dahowlett9
  • Considering their culpability in the WM fiasco...

    I am not surprised to see a management shake-up at SAP.

    However, seldom does the removal of one man change a corporate culture. I am sad to say that I expect more of the same from SAP until it either loses a huge lawsuit (with huge penalties) or until it loses enough customers to realize that it can't keep lying to them.

    While all ERP vendors seem to be a PITA to work with, the stories I am hearing about SAP from my contemporaries make Oracle look positively friendly -- and any of you other Oracle customers know how hard that is.

    If SAP wants to survive they will need to dramatically change the way they interact with customers; both before and after the sale.

    Regards,
    Jon
    JonathonDoe
    • If you'd like to...

      email me directly: dahowlett [at] gmail [dot] com then I'm more than happy to have words and find out what I can.
      dahowlett9
      • Hi Dennis,

        I'd be glad to speak with you. What would you like to find out?

        Perhaps my post was less than clear? If so, I apologize.

        The WM debacle I am referring to is their failed implementation at Waste Management, which is now the topic of an ongoing lawsuit.

        While all the facts are not yet in (and frankly, only the jury will get to hear them all) it appears from the complaint that SAP misrepresented what they could do for WM. While this is not atypical in an ERP sales call, is seems endemic to how SAP does business.

        In the case of WM's team, the management appears to failed to do due diligence in fact-checking SAP's claims. However, under contract-law being an optimistic buyer and believing the vendor is not a crime ... telling the lies to close the sale is.

        While I am not a SAP customer, many of my contemporaries are. The undertone of their conversation is that it was only a matter of time before SAP got caught with their pants down on something like this.

        That sort of behavior doesn't go on for this long without it being pervasive throughout the corporate culture, so I think that the "shake-up" has more to do with SAP trying to preserve some credibility rather than this individual's performance ... and I think that changing the figurehead is unlikely to change the culture.

        Regards,
        Jon
        JonathonDoe
        • Keep WM out of it

          Jonathon,

          Your anonymous comment is both irrelevant to the management changes and erroneous with respect to the likelihood that the WM suit will survive in court or have a material impact on SAP. The management changes announced today have been in the works for months, and the timing of the suit is pure coincidence. As for the merits of WM's complaint, I think in the end WM's management will have to fess up to its potentially greater share of the blame.

          Josh
          josh16
  • Hi Josh, Clearly we disagree.

    (no text)
    JonathonDoe