On 7 February 2010, SAP announced that Leo Apotheker had resigned from his position as CEO and would be replaced by co-CEOs Jim Hagemann Snabe and Bill McDermott. At the same time, CTO Vishal Sikka was appointed to SAP's executive board. SAP also said that its supervisory board has asked SAP's co-founder and chairman of the executive board, Hasso Plattner, to "continue advising the new leaders on product and technology development."

For this latest change in leadership, SAP has returned to the co-CEO model, which it has often followed in the past. This time, however, Gartner believes its use of this model represents a compromise, rather than a particular strategy, and suggests that SAP did not have a clear succession lined up. Although neither Snabe nor McDermott has ever led a software company before, they both played a significant role in sales during SAP's recent high-growth period. Snabe has most recently been the leader of marketing and development for SAP's business applications; McDermott has led its field organization.

Apotheker’s short tenure, which took place in the midst of a struggling economy, was plagued by customer satisfaction issues that we believe were directly linked to Apotheker’s maintenance strategy. Under his leadership, SAP failed to offer a compelling and clear strategy for the longer-term future of its solutions. Gartner believes that employee dissatisfaction with Apotheker played a major role in the decision to replace him.

This leadership change likely heralds SAP founder and Chairman Hasso Plattner's increased involvement in the company's operations and strategic direction. While Plattner's presence may bolster confidence and, to some extent, unify the company's strategic vision, it will also minimize the impact of a co-CEO structure. The most likely scenario under this structure will see McDermott continuing to lead sales while Snabe leads product strategy and development, with Plattner assuming strategic leadership. We believe that within 18 months, one of the two co-CEOs will assume strategic leadership, at which point Plattner will begin to play a less active role.

Regardless of SAP's organizational structure, the biggest challenge it faces is revitalizing its position as a technology leader without adversely affecting the performance of its current product portfolio. In undertaking this daunting task, SAP will benefit from its strong foundation, which has made it one of the few companies able to deliver a global, integrated suite of applications that covers a broad range of functions across many industries. SAP has previously succeeded under similar circumstances, such as the R/2 to R/3 transition, in which SAP managed to protect technology investments while also offering technology advancements. To succeed this time, SAP must walk a fine line between remaining overly focused on short-term sales and margins and becoming overly invested in pursuing leading technology that may not immediately benefit its installed base.

Current and prospective SAP customers:

• Take advantage of SAP's renewed attention to customer/vendor relationships by engaging in short- and long-term planning with your account executives, who may have become more receptive to such discussions.
• Prepare for SAP to take a more aggressive direction with its technology. Closely monitor SAP's strategic direction for any direct impact on your specific implementation.

• "SAP Reintroduces Standard Support: Customers Should Choose Carefully"— SAP is allowing all customers to choose SAP Standard Support at 18% as a low-cost option for maintenance and support of all installed software from 2010 and will allow switching. By Peter Wesche, Bob Igou and Yvonne Genovese
• "Vendor Rating: SAP"— SAP has good financials and a broad product portfolio, including a suite considerably strengthened by its acquisition of Business Objects, but concerns remain regarding maintenance changes, Business ByDesign delays and a lack of a software-as-a-service offering. By Thomas Otter and others

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