SAP Cloud Effort Pushes Forward Despite Exec Turnover, Official Says

SAP cloud evangelist Nick Brown says Vishal Sikka and others will be missed, but that the software company's cloud strategy is strong and growing.

BOSTON—The recent executive shakeups at enterprise software giant SAP hit the company's cloud computing business particularly hard, with some of the top people in that unit exiting.

Vishal Sikka, SAP's CTO in charge of products and innovation and a key developer the company's HANA in-memory database, resigned May 4. HANA has proved to be a highly successful product for the company and has become the primary platform for SAP's cloud computing ambitions.

Days later, it was announced that Shawn Price, who in January took over as head of SAP's cloud unit, was ousted, continuing a trend at the company of instability in a key business for SAP as it looks to compete with the likes of, Oracle and Microsoft in the all-important cloud arena. Price had taken over for Robert Calderoni, who had taken the reins from Lars Dalgaard in a tenure that lasted only months. Dalgaard had been CEO of SuccessFactors—a Web-based human resources software maker—until SAP bought it in 2012 for about $3.4 billion.

Sikka was replaced by two other executives, Robert Enslin and Bernd Leukert, on SAP's executive board. Price reportedly will not be replaced.

The executive-level shakeups have led to questions from industry observers about the state of SAP's direction, particularly in the cloud.

"Any time you have a cluster of executive departures like this, it suggests a certain amount of turmoil going on behind the scenes," Charles King, principal analyst with Pund-IT Research, told eWEEK. "It could also be that the company is evaluating—or re-evaluating—what it's doing in the cloud, and whether it might need a new viewpoint and some fresh blood."

Despite the changes at the top, SAP will continue to push its cloud strategy, which has been a focus of the company for more than a year. And because of the work done by Sikka and others, SAP's plan for the cloud is a solid one, according to Nicholas Brown, the company's senior vice president of cloud strategy and evangelism.

"Vishal has done a lot, from my perspective," Brown told eWEEK in an interview here just after news of Sikka's resignation became public but before Price's departure was announced. "He was a great leader. I'll miss him. … A lot of work still needs to be done, but it's really just the work. A lot of the vision and strategy is already in place, and a lot of that is because of Vishal."

Much of that strategy focuses on HANA as the company's cloud platform. HANA was launched in 2011, and it now has more than 3,200 customers. The company's SAP Business Suite powered by SAP HANA accounted for another 1,000 customers, and SAP said applications for HANA are being built by 1,200 startups globally.

SAP executives also see HANA as the foundational platform for its cloud efforts. Talking about the first-quarter financial numbers earlier this year, SAP CEO Bill McDermott said in a statement that the company is "well on our way to becoming the cloud company powered by SAP HANA with fast growth in the cloud and broad adoption of HANA as a real-time business platform. We offer our entire Business Suite in the cloud … and our customers can manage all workers, goods and services through the world's largest business network in SAP cloud."

The effort is paying off. In the first quarter, SAP officials reported the company's 60 percent increase in cloud subscriptions helped fuel a 3 percent increase in revenue, to $5.11 billion over the same period last year.

Brown, who has been with SAP since 2007 after stints with such vendors as Oracle and Siebel Systems, said the financial numbers are an indication that SAP is on the right track with cloud. HANA represents a persistent layer the company can build off of, and bringing such enterprise software tools like SuccessFactors and Workday to the cloud are easing the way for customers who want to make the move to the new compute model.