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Farewell Leo: SAP CEO resigns

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8th Feb 2010
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SAP Leo Apotheker resigned unexpectedly on Sunday with immediate effect.

Apotheker has been with the company for more than 20 years and took over as CEO in May 2009 after a period serving as co-CEO withHenning Kagermann. His departure “by mutual agreement” and a return to a co-CEO set up between field chief Bill McDermott and head of product development Jim Hagemann Snabe will help SAP to “better align product innovation with customer needs”, the company said.

Analysts, however, pointed to the company's first drop in annual revenues since 2003 following a period of customer and staff discontent. SAP’s total revenues dropped 8% to E10.7bn in fiscal 2009, while software licence revenues fell by 28%.Just last week, Apotheker said that sales had picked up in the year's fourth quarter and that new product developments and efficiency measures were having a beneficial effect

But the company’s announcement on Sunday said the supervisory board decided against extending Apotheker’s contract, which would have expired at the end of the year.

Chief technology officer Vishal Sikka has been appointed to the SAP executive board and SAP founder and supervisory board chairman Hasso Plattner will play a strong role in advising the new leaders on technology and product development, the company said.

Thomas Otter, an analyst at market researcher Gartner and former SAP employee, told the Bloomberg news agency that the vendor needed to develop a “more compelling technological vision” and that a recent internal staff survey showed that Apotheker had failed to motivate them.
 
“The recent employee survey highlighted that under Leo, employee morale dropped significantly. This was a major influence on the board’s decision to change, probably more than the 2009 financial performance,” Otter said.

But Paul Hamerman, an analyst with Forrester Research, told Bloomberg that he believed Apotheker’s controversial attempts to change customer support contracts had not helped either and that SAP needed to look outside of the company for new ideas to revive growth.
 
“What happened during the past year was a contentious relationship that emerged with customers over enterprise support prices. They lost touch with their customers. I think Leo’s persona didn’t help. At times, he was defensive and condescending toward the media and the customers,” Hamerman added.
 
Peter Goldmacher, an analyst with Cowen & Company in San Francisco, was even more radical in his views, however.“I think SAP is structurally impaired and I don’t think anybody can change that and get them out of the tailspin. I don’t think SAP is competitive as an independent company. They need to be acquired,” he said.
 
But Goldmacher added that such a move was unlikely in the short-term as “management will exhaust every opportunity before seriously considering shopping around for a buyer”.

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By Epaminondas
11th Feb 2010 10:20

Farewell Leo

Interesting article but what the hell is SAP ?  Are we all supposed to know or couldn't you give us some help.

 

Perhaps it is an insider story. 

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By dhwallace
11th Feb 2010 11:06

What is SAP?

Haha.  Assuming you're not joking, SAP is both the supplier of and itself the world's biggest selling ERP software package.  It dominates the provision of finance systems to blue chip companies but as a true enterprise wide systems it is much than just a finance package as it has fully integrated modules for MRP, HR, Payroll etc etc...

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By User deleted
11th Feb 2010 11:47

DHW

What is ERP

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By kombe
11th Feb 2010 12:14

Which Strategy?

Whatever prompted the earlier decision to scrap joint CEO was an error in strategy. The current move is perhaps meant to provide some short term comfort as SAP tries to get some feet. However, there's need for a far more radical long term strategy and I think Hasso needs to empower the new leaders to gain focus.

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By dhwallace
11th Feb 2010 12:23

ERP

OK, you got me....

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Accountants & Business Advisers
By Gladstone
11th Feb 2010 12:42

SAP
I truly believe that SAP applications have great potential to current and future business needs. But saying that I must say that until its' applications are well understood by general user-base, it is not going to grow or improve. Lot of experienced people still find it difficult to understand the complex info on SAP applications about what they could do to solve the business problems.

I hope the company improves as am heavily involved in the ERP that SAP provides!

Rgds

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By User deleted
11th Feb 2010 13:50

do you know

what ERP stands for?

the previous poster that I asked apparently didn't kmnnow himself.

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By dhwallace
11th Feb 2010 17:55

ERP

Well, a quick search on that InterWeb thingy well tell you that ERP stands for Enterise Resource Planning.  It comes from MRP - Materials Resource Planning - which were production planning systems that were the origin of SAP.  But really ERP means an enterprise wide system that does finance and some other stuff....

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