All change at SAP

Den Howlett Profile picture for user gonzodaddy May 23, 2013
SAP has announced sweeping changed in the company's management. Many of these should be welcomed as they provide the bench that will define the company's future. Net-net it is all looking good.

SAPPHIRE NOW, Wednesday, May 19, 2010, Frankfurt, Germany
SAP has announced important management changes. Vishal Sikka takes charge of all development, Lars Dalgaard, former head CEO of SuccessFactors which was acquired by SAP in February 2012 is out and Bob Calderoni, former CEO Ariba, another acquired company is promoted to global go-to-market for all cloud solutions.  All of this is good news for customers. None of this is a surprise.

When SuccessFactors was acquired, the plan was to ring fence cloud applications while the main products continued under the existing SAP management. That made sense at the time.

What nobody factored in was the speed with which Sikka's team morphed HANA, the then database replacement into a fully fledged development platform and, as Sikka has consistently said, the basis for SAP's renewal.

What is less well known is that Dalgaard was always going to be a difficult fit for SAP. His exuberant sales led personality was not always matched by acceptance of the 'SAP way.' In promoting Calderoni, SAP brings much needed adult supervision to a group that was far from comfortable inside the SAP orbit. As Thomas Wailgum at ASUGNews said:

As I reported back in February (SuccessFactors’ “Cloud DNA” Slipping Away from SAP), a year after the SuccessFactors acquisition finalized, it was very apparent that many members of SuccessFactors’ core leadership team have left the building—and aren’t coming back.

First out the door was the CFO, a move that went largely un-noticed but which was deeply worrying for some people inside the organization and especially following reports that prior to acquisition, SuccessFactors was in trouble over revenue recognition. At that time, I described SuccessFactors as an out of control pup. A succession of departures left Dalgaard alone. His departure represents a final clearing of the decks. What does this mean for customers?

The customer impact

Brian Sommer provided some hints in his analysis of the most recent SAPPHIRE Now when he said:

  • SAP customers need to get off the non-cloud, on-premises versions of their ERP software soon.  The cost to maintain this bygone computing model has reached the end of its useful life for many firms.
  • These customers need to have their ERP data AND third party data accessible via in-memory analytic tools to gain the operational insights that will help them remain competitively relevant and vibrant. Keeping ERP data on fixed disk systems does not provide the speed and reaction that a modern business needs.

Analytics is one dimension, this latest set of moves needs to be seen in a broader perspective.

Thomas Otter, who recently rejoined SAP after five years at Gartner now heads development for Employee Central. This is crucial because customers were in the difficult position of not knowing how HR will be developed going forward and what piece parts would be taken to the cloud and which would remain in on-premise development. Otter has many years SAP experience and has also spent enough time outside to gain a solid perspective on the developing shape of the broader market. My sense is that under Otter's leadership, SAP will have a much more compelling and coherent HR story because he will know how best to take EC forward in the context of the broader HR picture and not as a point of confusion.

Bringing Calderoni and Rob Enslin (who leads global sales) together provides Sikka with the sales air cover and experience needed to take HANA well beyond the modest number of POCs and live customer numbers. It also exposes Sikka to enough of the sales cut and thrust for him to get closer to customers and so round out the experience necessary for bringing great products to market.

Net-net, this latest set of changes represents an intelligent re-organization that should enable SAP to make the much needed transition to becoming a 21st century cloud based vendor while ensuring that its legacy customers are not left behind.

There was only one small blot on this set of announcements. The departure of Luisa Delgado as head of SAP's internal HR is a sad loss. SAP has not done well in holding onto HR heads in the last few years so it will be interesting to see who succeeds her.

Image credit: SAP Techno

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