Top exec at SAP – a major competitor with SAS and IBM – resigns

Updated Feb. 8, 2010 at 5:57 a.m.

Top exec at SAP – a major competitor with SAS and IBM – resigns

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CARY, N.C. – Top executives at SAS such as Chief Executive Officer Jim Goodnight and top marketing officer Jim Davis like to say that continuing disruption in the business intelligence software and services space only helps the Cary-based firm.

More turbulence struck Sunday.

In Frankfurt, Germany, the chief executive of global giant SAP AG, Leo Apotheker, resigned after his contract was not renewed and two new co-CEOs have been named, the company said.

SAP is one of the world’s largest providers of business intelligence software and services and is one of the major competitors for Cary-based SAS as well as IBM and Oracle.

SAS grew its revenue more than 2 percent in 2009 despite the global recession and as other BI providers were either distracted by acquisitions and lingering absorption issues – or were acquired. SAP, IBM and Oracle have all been at the forefront of buying firms in seeking greater market share for the booming BI business.

At SAS, the company has refused offers of acquisition, has remained privately held and continues to grow its workforce while offering more products and services. (See LTW coverage here about SAS revenues and SAS' positioning for 2010.

SAP, meanwhile, now will have to deal with a management change.

Neither SAP nor Apotheker, who has been with company since 1988 and CEO since 2008, said why the decision was made not to renew his contract.

Apotheker is a casualty of SAP's recent struggles, Cowen & Co. analyst Peter Goldmacher said Sunday.

"When companies have rough years, somebody has to take the bullet," he said.

But Goldmacher said he believes SAP's structure is "impaired," and doesn't think anyone can pull it out of its "tailspin." He thinks the company isn't able to compete on its own and needs to seek a buyer who can "really leverage the business."

Another analyst was surprised by the move, according to Reuters.

"This step comes as an absolute surprise," DZ Bank analyst Oliver Finger told clients in a research note, Reuters reported. Finger said the change "should increase short-term uncertainty about SAP's future strategy" and hit SAP shares.

The company's supervisory board, the German equivalent to a U.S. board of directors, did appoint two co-CEOs: Bill McDermott, head of field organization; and Jim Hagemann Snabe, head of product development. Both men are on the company's executive board.

In a brief statement, SAP, based in Walldorf, said its "supervisory board has reached a mutual agreement" not to extend the contract.

McDermott joined SAP in 2002 and oversees global field operations for the company. He joined its executive board in 2008. Hagemann Snabe joined SAP in 1990.

SAP also said Vishal Sikka, its chief technology officer, was appointed to the company's executive board and its co-founder, Hasso Plattner, who chairs the supervisory board, "will continue to play a strong role in advising the new leaders on technology and product development."

Plattner said the executive board's new setup would let the company "better align product innovation with customer needs."

Last month, SAP, whose programs help companies do back-office work such as payroll, inventory management and accounting, said its fourth-quarter net income fell 12 percent to euro727 million ($995.3 million) because of difficult market conditions, but said it expected an improvement this year.

Tags: Hot Off the Wire, SAS, IBM

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