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The Changes at SAP - What Matters and What Doesn't
Josh Greenbaum
JUL 30, 2013 08:00 AM
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SAP co-CEO Jim Hagemann-Snabe has resigned, and is likely to move up to the Supervisory Board. President and corporate officer Sanjay Poonen has also resigned, off to parts unknown, and SuccessFactors founder Lars Dalgaard resigned June 1. Ariba CEO Bob Calderoni has taken over as SAP's cloud leader. And Vishal Sikka recently added leadership of all of SAP's development efforts to his expanding portfolio.

Lots of changes at SAP, but what does it all mean? In a nutshell, less than it may appear. Solo-CEO Bill McDermott still has to execute on sales, especially given the less-than-stellar quarter, and Calderoni in particular still has to help cloud sales expand, as it was the cloud that rained on SAP's recent quarter the most. Considering Sikka's HANA is the foundation and the leading edge of all of SAP's product efforts, his move to head up all of development represents more of an acknowledgement of the status quo than anything particularly new. And with Snabe, the "other" technology guy out of the picture, Sikka gets to have sole ownership of this key portfolio, which may simplify things across the company.

Poonen's departure does put into question the fate of the company's mobile strategy, which was given to him as his next challenge following his success at driving SAP into the upper echelons of the BI/Analytics market. I wrote earlier in the year about the "end of mobile", which got me taken to the woodshed, Poonen-style (main weapon of coercion: lunch). Mobile revenues didn't make the highlight reel from last quarter, and my guess is that mobile is going to be a major issue in coming months as the company tries to boost revenue from the mobile assets it acquired over the last two years.

Also needing some attention will be the Asia-PAC markets, which definitely didn't perform up to expectations in the last quarter and are clearly slated for something new. I would expect that McDermott will be making some personnel changes in that part of the business soon-- it's too important to not shore up with some kind of personnel shift, if for no other reason than to make a statement that getting this market back on track is an important priority.

That's business as usual, but there's a lot more going on at SAP that will have a greater impact than the musical chairs at the top. I had a briefing recently about SAP's Connected Car strategy, which includes some fascinating new business models for generating revenue — and consumer customers — for SAP. Selling software and services that change how cars interact with their drivers — think of the car as a commerce platform, and not just a transportation machine — could have a major impact on SAP's revenues and overall business cloud moving forward. Ariba is another nascent opportunity, and the company has yet to really leverage its opportunity in synergy with SAP. Using Ariba to drive new business through a 21st century version of the dotcom era net markets concept has huge upside potential for SAP, and Calderoni and company have only just begun to get that effort started.

Suite on HANA, everything on HANA: that's also just getting started, with a huge potential for net new revenue on the horizon. The company's recent Cloud Extension strategy, which promises to provide some interesting contractual and maintenance incentives to customers that are shifting from on-premise to cloud deployments of SAP software, could really help keep SAP customers from straying to other cloud providers and tamp down revenue leakage by supporting customers' desires for a hybrid on-premise/cloud strategy. The Rapid Deployment Solution implementation model is beginning to have a huge impact on customer costs and innovation strategies, and even good old Solution Manager is going to see a new purpose, and a much more cost-effective implementation lifecycle, as part of the cloud push.

There's more, and that's the point. SAP's management structure is both broad and deep, and while the departure of a co-CEO is newsworthy, this departure means less than it might seem on face value. Don't get me wrong, Snabe is going to be missed, as a person and a business leader — though it's going to take 10 months for that to happen anyway, so we'll get to play Danish swan songs for while. More importantly, there are changes that will make a difference at SAP that will be felt for a much longer time than the impact of Snabe's resignation, and that's what really matters to SAP, it's customers, and its partners. I personally wish Jim all the very best, but I'll not mourn his departure. There's just too much else going on.

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