Reactions to SAP co-CEO Snabe's departure range from cool to concerned

Over the weekend, SAP announced co-CEO Jim Hagemann Snabe will be stepping down in 2014. What it means depends on who you ask.

Reactions to news that Jim Hagemann Snabe is stepping down as SAP co-CEO ranged from muted to concern that SAP could become too sales focused, at least in the near term.

"My only concern is not having a product-side balance to sales and marketing," said Don Loden, a consultant and data specialist with Atlanta-based Decision First Technologies. "With Snabe, I think you had somebody that was both fully grounded in the products, and the stack of products. SAP has become much more complicated, with many more product lines," Loden said. 

Not having that solid product vision to complement co-CEO Bill McDermott's – whose background is in sales – could be "a mild concern," he said.

"I think they'll pull it off," Loden said.  "But the near term could be rocky."  

On Saturday, SAP announced that Snabe, who has operated as co-CEO along with McDermott since 2010, will be stepping down ten months from now, in 2014.  Snabe cited spending more time with family as the primary reason for the move.  He is expected to take a seat on the SAP supervisory board when he steps down, pending shareholder approval.

Others were less concerned about the news.

SAP routinely transitions its CEOs out every few years, and the co-CEO arrangement was never meant to be a long-term arrangement, according to Paul Hamerman, analyst with Cambridge, Mass.-based Forrester Research Inc.

"When Snabe and McDermott were installed as co-CEOs in 2010, SAP was coming off a low point, with [former SAP CEO Leo] Apotheker being fired. The co-CEO structure served SAP well as the company got back on track," Hamerman said.

While SAP is losing someone with a strong technical background in Snabe, SAP's Vishal Sikka has been taking on more responsibility, according to Hamerman. Sikka is on the SAP executive board and now oversees the development of all new technologies at SAP.

"Sikka has been groomed to take on increasing amounts of work around the product development strategy, from a technical side," Hamerman said.

Hamerman said he was glad to learn Snabe would stay involved with SAP, and pointed to the fact that Snabe wouldn't be stepping down for ten more months as proof that the move is amicable.  Still, he wondered if there wasn't more to Snabe wanting to spend more time with his family as the primary reason he's stepping down.

"It's hard to understand what the real reasons are, without being inside the company.  They're being a bit coy with the statements that they've made," Hamerman said.

SAP shift to mobile, in-memory analytics cited as factor 

Snabe's citing time with family as one reason to make a change was no doubt valid given the demands of the job, but Sikka's growing influence likely also played a role, according to Jon Reed, head of JonERP.com and an independent enterprise software analyst.  

"It did raise questions as to what Snabe's role would be," Reed said.

"Should customers be worried? No," Reed said.  "I don't really perceive SAP as having a leadership problem or challenge.  Their challenge is execution and cultural transformation into this cloud company that McDermott has proclaimed them to be."

Given Snabe's involvement with ERP software, his departure may underscore SAP's attempts to become an enterprise software company more focused on newer technologies like cloud, in-memory and mobile computing, according to John Evarts, chief operating officer (COO) and CFO of Mediafly, Inc., a Chicago-based manufacturer of multimedia services and systems.  

"I think for me, Jim really represents SAP and the core ERP systems that he helped develop.  My take is that this [represents] the next phase," Evarts said.   "The shift will only accelerate from here."

As senior vice president and chief operating officer (COO) of SAP's business solution group, Snabe was responsible for the design and production of SAP's flagship ERP software, as well as applications for the public sector and financial industry. He also led SAP’s industry business unit and was responsible for creating vertical applications for more than 24 industry segments, according to SAP.

Philip Adams, who chairs the UK and Ireland SAP User Group, said Snabe and McDermott had succeeded in establishing better lines of communication between the company and its customers.  Whether the new changes in leadership will undermine that remains to be seen, he said.

"It will be interesting to see if further changes are made to ensure there continues to be the same level of focus on product and customer value," Adams said in a statement.  "With Jim’s knowledge, expertise and experience retained on the supervisory board and Bill at the top, we hope SAP will continue to deliver value to its customers and prosper.”

Others said they don't know how Snabe's departure will  affect SAP. 

"I attended one Sapphire conference where Snabe spoke from Germany via video conference and aside from seeing him and the European team as the development side of SAP and the North American team more the marketing and admin group. I [don't] have much of an idea how this change would affect SAP," said Ed Broczkowski, a business director at candy company Just Born, Inc., and former head of its SAP ERP implementation division.  

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