Strong sales focus as SAP shuffles the board
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."