The latest executive promotions and departures show that SAP is bringing younger executives into leadership positions and that the enterprise applications company sees midmarket and cloud computing software products as essential to its future growth.
The management shakeup continued at SAP
on Feb. 11, with the enterprise business software company named a new chief
operating officer and elevating the executive overseeing the small and midsize
enterprise product lines to the Executive Board.
Gerhard Oswald, the executive board member who managed SAP's
Global Service and Support business, was appointed COO
to replace Erwin Gunst, who resigned on Feb. 7 due to health reasons. Peter
Lorenz, executive vice president of SME (Small and Midsize Enterprises), has
been named a corporate officer.
Lorenz's promotion is a sign of the importance SAP
is placing on the small and midsize business sector as the source of future
sales growth, and he has some major challenges on his plate. Lorenz has been
supervising the development of key SMB products, including Business ByDesign, SAP
Business One and SAP Business All-in-One. He
will continue to report to Jim
Hagemann Snabe, who was named co-CEO on Feb. 8 along with Bill McDermott.
SAP has worked through long development
cycles for these SMB products and the company is counting on them to drive sales
profit growth in 2010.
SAP also reported that the Supervisory
Board had accepted the resignation of John Schwarz, a 38-year IT industry
veteran, who was the Executive Board member responsible for SAP
BusinessObjects, the Global Ecosystem and Partner Group, and Corporate
Development. "We regret that John Schwarz has decided to leave the
company. He has been instrumental in achieving the successful integration of
BusinessObjects in record time and helping to build SAP's
market leadership in business intelligence," SAP
said in a statement.
While most of the changes are predictable, the departure of Schwarz was
something of a surprise, because he was seen as instrumental in the successful
integration of SAP's $6.8 billion
acquisition of BusinessObjects into the larger parent company, said Paul
Hamerman, a Forrester Research analyst.
"The obvious implication is that he was passed over for a CEO
or co-CEO position. But I think the reasons
were probably a little more complex than that," Hamerman said, adding that
it may have been a move to get younger executives into leadership positions.
Snabe and McDermott are in their mid-40s, while Schwarz is 59 and was
approaching the SAP mandatory retirement
age, he pointed out.
However, there is an also an alternative view that SAP
"was sort of overzealous in pushing BusinessObjects products on all of the
customers" and that this added to a general feeling of discontent among
many customers, Hamerman said.
Customers were already upset by hefty increases in software maintenance and
support and "some felt that SAP was
pushing a lot of products on them that they didn't necessarily need right
now," he said.
Indeed, in announcing the appointment of Snabe and McDermott as co-CEOs, SAP
Chairman Hasso Plattner said one of the top goals of the new management would
be to restore
trust with SAP
employees, partners and customers and to "make SAP a happy company
The management restructuring became known when SAP
announced on Feb. 7 the resignation of CEO
Leo Apotheker, little more than a week after the company reported a 12 percent
drop in operating income and a 9 percent drop in revenue for 2009.
Peter Lorenz's appointment as a corporate officer is recognition that he is
managing an important part of SAP's
business, Hamerman said.
"They have invested a huge amount of capital [in] Business ByDesign,
which hasn't been successful to date," Hamerman said. Business ByDesign is
a suite of SAAS (software as a service) business applications. "They have
done a lot of work on it and it looks like they are going to relaunch it this
year," and try to sell the suite to more midmarket customers, he said.
Business ByDesign and the two other midmarket products, Business One and
Business All-in-One, all have to be successful because the best prospects for
future sales growth are in this sector, Hamerman said.
Plattner has identified SAAS, cloud computing, parallel application
processing, large in-memory database and the use of phones as major computer
access terminals as the trends that SAP will
emphasis in its future product development and marketing efforts.
John Pallatto is eWEEK.com's Managing Editor News/West Coast. He directs eWEEK's news coverage in Silicon Valley and throughout the West Coast region. He has more than 35 years of experience as a professional journalist, which began as a report with the Hartford Courant daily newspaper in Connecticut. He was also a member of the founding staff of PC Week in March 1984. Pallatto was PC Week's West Coast bureau chief, a senior editor at Ziff Davis' Internet Computing magazine and the West Coast bureau chief at Internet World magazine.