Thursday, February 11, 2010

Not a good week for SAP

There are more management changes in Waldorf, with SAP announcing more changes to its executive board. But the big disappointment is the resignation of John Schwarz, former CEO of Business Objects, which SAP acquired in 2007.

Why is he leaving? Most likely because he didn't get the CEO job, which went to Bill McDermott, head of the field operations, and Jim Hagemann Snabe, head of product development, who will now share the top job.

The loss of Schwarz is a body blow to SAP for at least three reasons:
  • First, Schwarz was slated to run product management for SAP which is in desperate need of strengthening. Confusion over the role of SAP's new Business ByDesign is just one example.
  • Second, as the former head of Business Objects, his resignation has to be a discouragement for the top Business Objects people, who SAP needs to keep, as business intelligence is one of the few bright spots for new sales in SAP’s portfolio right now.
  • Finally, Schwarz was a test case for whether an outsider could survive in the top ranks of SAP management. His departure has to be seen as a failure for SAP to accommodate someone without a long tenure within SAP at that level.
Dennis Moore has a good write-up on these latest management changes at SAP.

Update: Forrester's Paul Hamerman thinks SAP needs to follow through on its intent to "changing its meandering direction." He writes, "Failure to do so will result in a loss in market value and eventual acquisition."

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