Shai Agassi out at SAP

SAP said Shai Agassi is stepping down as head of the company's product and technology group. Agassi's departure was by "mutual agreement with the company.
Written by Larry Dignan, Contributor

SAP said Shai Agassi is stepping down as head of the company's product and technology group. Agassi's departure was by "mutual agreement with the company."

Agassi is leaving to focus on alternative energy and climate change. He was one of the front runners to replace CEO Henning Kagermann.

The Wall Street Journal first reported Agassi's departure and SAP followed up with a statement about an hour later.

In the statement, SAP said it named Leo Apotheker deputy CEO and outlined the circumstances of Agassi's departure.

"While we regret Shai's decision to leave, we congratulate him on his record of achievement at SAP," said Hasso Plattner, chairman of the SAP Supervisory Board and company founder."Shai drove the company's successful platform strategy, led innovation that helped SAP grow and continue market leadership, as well as set the stage for the future of business software. I had shared with Shai my plan that he should become successor to Henning Kagermann as a co-CEO for SAP. With the extension of Henning's contract to 2009, it became apparent that Shai was not comfortable committing to a 10- to 15-year period, which was not in keeping with his personal career timeline. Given this, I made the recommendation to the Supervisory Board that we change our plans and now adjust SAP's executive management team responsibilities."

Kagermann noted that SAP has a strong development team in place to move the company toward a services oriented architecture model. Kagermann and Apotheker will split duties and direct reports under a new management structure.

Agassi's departure is effective April 1 and he'll remain with the company as a consultant.

Reaction to the news was swift. Goldman Sachs analyst Christopher Sailer said in a research note:

"Agassi has been the leading technology visionary at the company, following former CEO Hasso Plattner's move to chairman from day-to-day executive management, and Mr. Agassi has lead the integration of SAP's infrastructure technologies under NetWeaver as well as its industry solutions. Mr. Agassi's departure should have little effect on the upcoming hosted solution for the mid-market, "A1S," as Peter Zencke has been the driving force behind it.
The departure is likely to continue to dampen sentiment around the stock given disappointing 4Q performance and significant milestones ahead. Mr. Agassi is the most senior executive at SAP running the company's product and technology strategy, and SAP is likely to make management changes to fill this gap. Reshuffling management entails execution risk, and 2007 is a critical year for SAP to deliver on its Business Process Platform (BPP) roadmap. However, SAP retains senior level technology expertise with Hasso Platner chairman of the Supervisory Board and Peter Zencke."

In many respects, Agassi was the face of a more nimble SAP. You can expect Oracle, which is suing SAP, to spread some FUD over Agassi's departure.

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