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Power behind throne to depart as SAP enters a new era

Board chairman Hasso Plattner lines up successor to take ERP giant into uncharted territory

SAP has begun the succession process which will see the replacement of co-founder Hasso Plattner as chairman of the German software giant's supervisory board amid a seismic change in technology landscapes.

The company has proposed that former Deloitte CEO Punit Renjen stands for election as a new member of the power team and is designated successor to Plattner, who helped launch the company in 1972.

Under the plans, the handover will take place when Plattner's current term expires in May 2024, three months after his 80th birthday.

Although he has not held a direct managerial position since he stepped down as co-CEO in 2003, Plattner has exerted influence over SAP by helping select company leaders and, on occasion, making his feelings known.

As a custodian of SAP's founding vision – which saw it embed the concept of ERP in the tech world's collective consciousness – his presence was perhaps difficult to ignore.

Since handing over direct operational control, Plattner has overseen the appointment of several CEOs including US executive Bill McDermott, who became the co-CEO of SAP in 2010 and then sole CEO in 2014. He instigated an acquisition spree that saw Sybase, SuccessFactors, Ariba, Concur, Qualtrics and Fieldglass among others come under the German vendor's ownership. During McDermott's tenure, SAP's market value increased from $39bn to $156bn. Despite the epic rise in shareholder valuation, Plattner voiced reservations.

"For Bill McDermott, competition was the priority. For me, it was always the customer," he told German business paper Handelsblatt in May 2020 [PDF].

"The idea of simply letting every company run independently and autonomously may even have made sense from a business viewpoint. It even stimulated a certain growth dynamic. Nevertheless, technologically, we didn't make the right decision. That cost us a year and a half to two years, but mentally the toll was a lot more," he said.

"SAP definitely needs a core system. That's been the case since our founding in 1972. And as we now move to the cloud, all our services and applications are naturally required to adapt. This takes time."

Following McDermott's resignation to lead ServiceNow, SAP refocused on its core ERP and took on moving its latest iteration – S/4HANA – to the cloud with renewed vigor. SAP adopted a joint CEO model for a second time, appointing American Jennifer Morgan and German Christian Klein. It lasted less than a year. Morgan departed in April 2021, leaving Klein as sole CEO.

Klein then launched the RISE with SAP program, designed to shift ERP customers to the cloud with a combination of SI partnership and cloud deals, which SAP offered to front on customers' behalf.

Whether Renjen's expected arrival sees the continuing focus on core product is not clear at this stage, but the challenge is significant.

S/4HANA had more than 20,000 customer sales, with around 60 percent net new customers, in the final quarter of calendar 2022. But Gartner figures show the latest in-memory iteration of SAP's ERP system has not been licensed by two-thirds (69 percent) of clients using ERP Central Component (ECC), the version before S/4HANA.

Renjen's ascension will coincide with another important change in SAP's leadership. CFO Luka Mucic is set to step down in March after eight years in the role. He will hand over to Airbus's Dominik Asam.

Asam was "the right person to continue powering SAP's successful cloud transformation," said Plattner of the appointment.

Plattner's departure comes hot on the heels of the company's 50th birthday. Investors and customers alike with be keen to see if SAP's singular vision survives the departure of its long-serving co-founder. ®

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