Monday, May 14, 2007
WSJ thinks Wal-Mart runs SAP
Friday, May 11, 2007
WSJ revisits Shai Agassi vs. SAP
Shai Agassi left SAP a few weeks back. The Wall Street Journal has a sort of a post-mortem, with afairly simplistic piece on globalization within SAP.
The globalization challenge within SAP is not all that different from the one faced by many other companies around the world. Whenever the markets for large companies move - SAP's customer-base started in Germany/Europe, but now US is its #1 market and Asia is growing rapidly as well - turmoil is inevitable.
SAP has globalized and is a more diverse company today than ever before. That SAP has development centers in India, China and Eastern Europe is not surprising. That it has a development center in Silicon Valley is not that surprising either. What is cool and rather unique is that it moved a lot of decision-making authority from Walldorf, Germany, to Palo Alto, USA.
The first attempt to do so started with Hasso Plattner's move to take SAP into the dot-com era in the late 90s. The pendulum swung the Walldorf way again with the dot-com crash and Plattner's exit as CEO, but swung back again to Palo Alto with Shai Agassi's promotion. What will happen next is not clear.
My hope is that decision-making @ SAP spreads more universally. A lot of the ecosystem that sustains SAP (SAP implementation companies and SAP consultants) is now based in India. SAP's second-largest development center is in Bangalore. Yet, there is precisious-little decision-making happening in Bangalore.
If SAP manages to universalize itself more, it will have a massive edge over a relatively US-centric company such as Oracle.
Link
The globalization challenge within SAP is not all that different from the one faced by many other companies around the world. Whenever the markets for large companies move - SAP's customer-base started in Germany/Europe, but now US is its #1 market and Asia is growing rapidly as well - turmoil is inevitable.
SAP has globalized and is a more diverse company today than ever before. That SAP has development centers in India, China and Eastern Europe is not surprising. That it has a development center in Silicon Valley is not that surprising either. What is cool and rather unique is that it moved a lot of decision-making authority from Walldorf, Germany, to Palo Alto, USA.
The first attempt to do so started with Hasso Plattner's move to take SAP into the dot-com era in the late 90s. The pendulum swung the Walldorf way again with the dot-com crash and Plattner's exit as CEO, but swung back again to Palo Alto with Shai Agassi's promotion. What will happen next is not clear.
My hope is that decision-making @ SAP spreads more universally. A lot of the ecosystem that sustains SAP (SAP implementation companies and SAP consultants) is now based in India. SAP's second-largest development center is in Bangalore. Yet, there is precisious-little decision-making happening in Bangalore.
If SAP manages to universalize itself more, it will have a massive edge over a relatively US-centric company such as Oracle.
Link
Wednesday, March 28, 2007
Shai Agassi leaves SAP
Much has been said about Shai's decision to leave SAP. Jeff Nolan has a round-up of various opinions on this subject.
The "old guard" didn't want to hand over the reins to him is the consensus. I guess it's also time to ask the question what Shai's actual impact on SAP was in sheer revenue terms.
My take is that his impact was no more than a few tens of millions a year, if that.
From Financial Times:
So I didn't know that the plan was to make Shai and Leo co-CEOs. I guess that's what bothered Shai.
Link
The "old guard" didn't want to hand over the reins to him is the consensus. I guess it's also time to ask the question what Shai's actual impact on SAP was in sheer revenue terms.
My take is that his impact was no more than a few tens of millions a year, if that.
- Portal: The Portal that his company was acquired for makes no more than a few million a year, and is mostly given away. Remember, the acquisition cost SAP a few hundred million dollars. So the Portal returns to SAP are net negative.
- NetWeaver: Let's give Shai the credit for all the NetWeaver branding. The branding has cost SAP several hundred million dollars. It has also given the confidence to customers that SAP has a "platform", whatever it means. But mostly it has been a safe buzzword in light of the Oracle turmoil for jittery enterprise customers. NetWeaver infrastructure components like the SAP Application Server haven't been selling like hot cakes or anything. Branding SAP BW as NetWeaver was ingenious, but not really honest. So net effect of NetWeaver: < $100M.
- New products: Things like Duet, xApps etc. have had practically no revenue impact on SAP so far. Put this next to something like SalesForce.com or NetSuite's success and you have a net negative impact.
From Financial Times:
Germany’s SAP, the world’s biggest maker of business software, took another hit on Wednesday night with the departure of research and development head Shai Agassi, long tipped as the group’s future chief executive.
People close to SAP said Mr Agassi’s decision led to the appointment of marketing head Léo Apotheker to the new post of deputy chief executive, formalising his status as the heir apparent to Henning Kagermann.
These people said Mr Agassi seemed to have lost hope of speedy promotion or did not like the prospect of becoming co-CEO with Mr Apotheker. He did not appear to be switching to a rival software company, they stressed,
The loss of Mr Agassi, 39, a former software entrepreneur, could further worry investors beset by doubts that SAP can appeal to smaller businesses after coming to dominate sales to big companies.
Mr Agassi’s move comes only weeks after chief executive Henning Kagermann, 60, extended his contract by only one year – a clear sign he was preparing to hand over the reins of the company soon.
Though seen as a successor to the cerebral Mr Kagermann, Mr Agassi’s youth and his base in California always made him more contentious among SAP’s German staff than Mr Apotheker.
So I didn't know that the plan was to make Shai and Leo co-CEOs. I guess that's what bothered Shai.
Link
