SAP restructures to gain traction in the cloud.

As reported by GigaOM: “Bill McDermott, the U.S.-based co-CEO of German enterprise giant SAP, will take the full top job at the company, according to a new proposal. If approved, that means current co-CEO  Jim Hagemann Snabe will move to SAP’s supervisory board.”

SAP gave Snabe and McDermott the co-CEO roles in 2010 after SAP pushed out Leo Apotheker.  Apotheker went on to become the short-lived HP CEO.

While SAP beats their chest about their cloud computing capabilities, they largely fall short in execution.  However, they could be between the proverbial rock and the hard place when it comes to cloud-based migrations, considering that their core is enterprise software.  The movement to cloud computing tends to replace enterprise systems.  If SAP moves to the cloud, they will cannibalize their own market.  IBM and Microsoft are in the same boat.

The moves that SAP makes this year and next will point to the future growth of the company.  Leadership change was required, and I suspect that SAP will act like a very different company for the time being. However, their longer term success is still in question, unless we see a solid and understandable strategy from the new leaders.

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David S. Linthicum

SVP Cloud Technology Partners

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