The management upheaval at SAP AG may reflect a battle over the company’s strategy that was resolved with the departure of executive board member Shai Agassi, says an industry analyst.
Agassi, who had been president of the technology and products group of the German-based enterprise resource management software company, resigned Wednesday over his future with the company.
But Daniel Sholler, vice-president of research firm Gartner and lead SAP analyst, his departure could have wide ramifications.
“Shai was really the catalyst for a change in strategy (at SAP) to get them to move on the notion of technology and platform [SAP’s Web-based NetWeaver] versus just thinking about business applications,” Sholler said Thursday.
The NetWeaver side of the business has been growing stronger in the last several years, with mySAP moving from a client-sever-based application to a Web-based suite.
SAP has also been pushing NetWeaver as an integration and application platform for building an organization’s IT services oriented architecture for SAP and other software.
But Sholler said, “there have been a lot of signs of the pendulum swinging back to a renewed focus on the tradition applications business.”
Officially, Agassi and SAP executives painted the departure as over who would occupy the chair of CEO Henning Kagermann, whose contract was set to expire at the end of this year until it was extended in February by the board to 2009.
Yesterday, Hasso Plattner, chairman of the SAP supervisory board and company founder, told reporters that he told Agassi he wanted him to share the CEO post with an unnamed person – which most analysts assume was Leo Apotheker, president of SAP’s customer solutions and operations, and, like Agassi, a member of the executive board.
But “with the extension of Henning’s contract to 2009, it became apparent that Shai was not comfortable committing to a 10-to 15-year period, which was not in keeping with his personal career,” Plattner said.
With Agassi’s departure Apotheker, responsible for the applications side SAP, has been named deputy CEO.
The change will not mean the killing of NetWeaver, Sholler said, but it could mean that the company will now lead with applications rather than the platform. Officials have been talking lately of a new product to help it attack the mid-market, Sholler said.
It already has All-in-One, a version of its enterprise-sized mySAP suite tailored for relatively fast implementation and which partners are being signed to build vertical market solutions around, and Business One, a Windows-based suite for small to mid-sized organizations.
At least one Canadian SAP partner shrugged off the shake-up. “I’m not really too much concerned,” said Derin Hildebrandt, vice-president of Project Line Solutions of Saskatoon, which resells and implements Business One in three Western provinces.
“There’s a solid management there with, particularly with Leo (Apotheker). . . Leo in particular has been a strong manager.”
Similary, Joel Martin, IDC Canada’s vice-president for enterprise software said that “this is just part of doing business.” Look, he said, at the revolving doors at Cisco Systems and Oracle.
“But SAP has to explain what this means for NetWeaver,” he added. “Shai really lead a lot of the initiatives at SAP around partners and the ecosystem around NetWeaver, which brought more value to SAP components.
While SAP is still the leading brand in ERP software, it faces increasing challenges from Oracle and Microsoft. Oracle has been quietly merging its applications after buying J.D. Edwards and PeopleSoft two years ago, but Martin expects it to be more active in Canada this year.
“It’s very clear that (Agassi’s) vision was to try to unify the (SAP) technologies as much as possible on top of the NetWeaver platform,” said Sholler, “which then would create the potential that technologies created for one market segment could be delivered more easily to another.
“It’s not clear if that drive to unification will continue” with Agassi’s departure. “We would suspect that part of what we’ve seen in this evolution of strategy in the last year is less and less of a desire for that and more to go to a portfolio approach where they will have multiple products they will sell to different but overlapping markets.”
Born in 1968, Agassi received his bachelor in computer science from Technion, Israel’s institute of technology. In 1992 he founded TopTier Software in Israel, then moved the company’s headquarters to California. He came to SAP when it bought TopTier in 2001.