SAP Chief Steps Down Following Poor Results

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SAP chief executive Leo Apotheker resigned on 7 Feb after a “mutual agreement” was reached not to extend his contract

SAP CEO Leo Apotheker has resigned after he and the SAP Supervisory Board “reached a mutual agreement” not to extend Apotheker’s contract as a member of the SAP executive board, the Germany-based software and services company announced on 7 Feb.

With his resignation, the SAP Executive Board appointed two co-CEOs, Bill McDermott, head of SAP’s field organisation and Jim Hagermann Snabe, head of product development, the company announced. Both men were already members of the SAP Executive board. Apotheker resigned immediately from the Executive Board as well as CEO. Apotheker has worked at SAP for more than 20 years.

Furthermore SAP appointed Vishal Sikka, chief technology officer, to the Executive Board and said that Hasso Plattner, SAP co-founder and chairman of the SAP supervisory board will “continue to play a strong role in advising” the new co-CEOs on technology and product development.

Apotheker’s resignation comes as SAP remains locked in a fierce global market share battle with Oracle over the enterprise business applications that both companies develop and sell. These applications include accounting, financial management, general ledger, human resources and others that are the operational bedrock of all large enterprises.

It also comes little more than a week after SAP announced a 12 percent non-GAAP decrease in operating income for the full year 2009. Total non-GAAP revenue for the period declined 9 percent to 10.68 Euros from 11.73 billion Euros in 2008. GAAP software revenue declined 28 percent in 2009 to 2.61 billion Euros from 3.61 billion Euros in 2008.

His departure is the latest in a series of rapid changes in the company’s senior management over the past three years. Apotheker has been SAP’s sole CEO since May 2009 when the contract of Henning Kagermann expired. He had been co-CEO with Kagermann since April 2008.

Apotheker’s appointment came in the wake of the controversial March 2007 departure of Shai Agassi, former president of SAP’s product and technology group. Agassi had been seen as a front runner to replace Kagermann. But SAP decided to extend Kagermann’s contract through April 2009 meaning that Agassi would have to wait at least another two years before he would have a shot at a co-CEO position alongside Apotheker.

At the time of Agassi’s departure, Plattner told the media that after SAP decided to extend Kagermann’s contract “It became apparent to Shai that he was not comfortable committing a long-term, 10- or 15-year period to SAP and [he] responded that I should not consider him for the co-CEO or CEO position.”

Agassi has since become founder and CEO of Better Place of Palo Alto, Calif., a startup company that provides electric vehicle networks and services.

SAP is also locked in a bruising lawsuit with Oracle over claims that a now-defunct online customer support subsidiary, TomorrowNow, illegally downloaded copyrighted Oracle product support documentation and code. TomorrowNow was founded to provide online third-party application maintenance and support for the PeopleSoft enterprise business applications that Oracle acquired in late 2004.

After several unsuccessful settlement conferences in 2009, the lawsuit is currently scheduled to go to trial in U.S. District Court in San Francisco on 1 Nov, 2010.