January 20th, 2009
SAP's Kagermann to retire early
Reports coming out of Germany say that Henning Kagermann, co-CEO at SAP will retire earlier than expected. Heise Online says that Kagermann will leave at the end of January. The company has chosen not to comment on this event but “Market sources confirmed however the particulars.”
I’m not surprised. SAP is going through one of the toughest periods in its 36 year history. Yahoo Finance reports the company may miss its margin targets in 2009, sending the shares down in morning DAX trading:
Shares in SAP fall 5.5 percent, making them one of the top decliners among German large-caps, as Capital Magazine reports the software maker may push back the timetable for hitting its margin targets and not give a 2009 sales outlook this month. SAP declined to comment on the report. ‘What the magazine reports is fully realistic,’ says a Frankfurt-based trader.
In these circumstances, it makes sense for Kagermann to step aside and hand over the reins of leadership to co-CEO Leo Apotheker. Difficult times demand strong leaders who can take decisions unencumbered by the need to consult extensively.
The report in Capital also quoted Apotheker as saying SAP had to reinvent itself, be nimble, eliminate red tape and become more international.
I’m glad to hear that. That leaves open the question as to what shape any restructuring might take. Frank Scavo, who has been monitoring layoff rumors said earlier in the month that:
SAP layoffs: A source reports that SAP is making some deep cuts in SAP’s Strategic Growth Enterprise (SGE) unit (focused on the SMB space).
Update: a comment on this post indicates 300 sales-related positions were affected in North America.
I’ve heard all sorts of numbers but until Apotheker details the steps being taken, it is hard to know what’s really going on. I am surprised about talks on SGE because of recent murmurings that ByDesign will be relaunched at SAPPHIRE in May. That would be tough going if there are deep cuts in the SGE group.
I expect Apotheker will be a lot more aggressive in getting things done. He can swing the ax hard and early in the knowledge that he will have a short period of grace during which his battle skills are assessed. Those who have met him know he’s a tough sales person. My hope is that he can solve the 2-speed conundrum that exists within the company and which must be a drain on management time while figuring out what to do with ByDesign. He would also do well to find ways of addressing the continuing partner quality problems that bedevil contracts. The good news is that the company has a rich seam of talent and a rapidly evolving ecosystem that can serve it well if managed sensibly.
My one regret is that I won’t get to shake Kagermann’s hand one more time as an officer of the company.
Dennis Howlett has been providing comment and analysis on enterprise software since 1991. See his full profile and disclosure of his industry affiliations.
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