SAP boss Apotheker out as company returns to dual CEO structure 8 February, 2010 By Mark Cox

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In his place the SAP Executive Board, in agreement with the SAP Supervisory Board, has appointed two Co-CEOs: Bill McDermott, head of field organization and Jim Hagemann Snabe, head of product development, both already members of the SAP Executive Board. In addition, Vishal Sikka, Chief Technology Officer, has been appointed to the SAP Executive Board.

Hasso Plattner, Co-Founder of SAP and Chairman of the SAP Supervisory Board, was very opaque about the specific reasons Apotheker was replaced in a media conference call on Monday. He said that reports of differences between Apotheker and himself on strategy were false. He said that press reports that the lack of success of SAP Business ByDesign, their on-demand offering for the mid-market and below, placed a part was false as well. Plattner gave the impression that Apotheker either fell on his sword -- or was asked to fall on it -- because fairly or not, he had become the public face for several SAP problems in the past year, most notably a decision to try and raise customer maintenance fees and large scale layoffs that undermined employee support..

"I was also part of the decision to raise maintenance fees," Plattner said. "Unfortunately SAP made some errors. This is not something that was put in Leo's shoes. We made a mistake. Now we have to regain the trust from the customers who were more than upset. Unfortunately the head of the company takes the blame."

Plattner admitted that the negative attitude of SAP employees to Apotheker played a factor, and that a recent SAP employee survey had not been good here.

Warren Shiau, Lead Analyst, IT Research,The Strategic Counsel, agreed that Apotheker took the fall for tough decisions he had to make in the recession.

"Apotheker had a lot of difficult things to face down," Shiau said. "Bad times hit and he was the one that had to make big layoffs --the first layoffs of that sort of scale that SAP ever had. There was a botched attempt to raise services revenues by moving customers onto higher priced maintenance fee programs/schedules in the middle of the economic crisis last year, which turned customers against him. The company's rank and file turned against him; and eventually the supervisory board (which I think we can take to include Hasso Plattner, pointedly) turned against him."

So where does SAP go now?

"This is not a short term solution," Plattner said of the co-CEO setup, in which McDermott will focus on sales and Hagemann Snabe on internal product development. He pointed out that is a very common setup in Europe, and that many American companies use a similar system by splitting up the top company ranks between two people.

"We will have changes in management style, with more agile product teams," Plattner promised. He said that the upcoming years will be dominated by super-large computers, with on-demand systems and cloud computing.

"We will see a dramatic shift about what is possible in enterprise computing," Plattner said. "Radical changes have to take place where the opportunity presents itself, and SAP is more than prepared to take advantage of this."

But first, he said, SAP has to regain trust -- with its customers and with its' own employees.

"What SAP has to re-establish is trust between all involved parties," he said. "We have lost here and there the trust, and we are committed to change this and change this quickly." He gave a message to SAP's customers that they had not forgotten them.

"I will do everything possible to make SAP a happy company again," he said. "And to do that we have to make customers happy as well."

This kind of comment also suggests that Plattner is going to play a larger role than he had been recently, as The Stategic Counsel's Shiau commented.

"The double CEO structure and some statements from SAP would lead me to believe Plattner is going to get somewhat more involved in things again," Shiau said.