Bravo, SAP CFO Dominik Asam

Judging by the current balance sheet and share price, SAP is more successful than ever. What are SAP CEO Christian Klein and his CFO doing better than their predecessors

SAP has always been a successful company. For many years, employees were proud of their company and SAP customers were satisfied to happy. During this golden age of users, partners, and employees, however, the share price was not always at the level that the Executive Board and Supervisory Board would have liked or expected.

It seems to be a characteristic of the past decades that there has rarely been a correlation between the sentiment in the SAP community and the share price. To put it in a nutshell: when the share price was high, sentiment was low; when SAP customers were satisfied, the SAP share price was below average.

The SAP community is experiencing another period of complete disharmony. Employees are being laid off or accepting severance packages; partners are fighting for their expertise as part of the S/4 conversion; SAP customers are losing their on-prem licenses and getting locked into SAP vendor lock-in with cloud subscriptions. Things look bad for the SAP community!

On the other hand, SAP's stock price is going from one all-time high to the next. Some financial analysts are predicting a share price of 300 EUR. In the eyes of shareholders, CEO Christian Klein and CFO Dominik Asam are doing everything right. Is SAP a Potemkin Village? When Christian Klein and Dominik Asam rave about cloud sales and present fantastic balance sheet figures, no one knows whether they mean hybrid, private, or public cloud. But the narrative is public cloud, and the financial analysts are delighted.

SAP CEO Klein likes to philosophize about AI and its widespread use at SAP, but hardly anyone can say whether it is machine learning, Hana and PAL (Predictive Analysis Library) or GenAI, whether with or without BTP (Business Technology Platform) or just an external AI service from the hyperscalers. It is not known. But it has to be AI and the share price will go up.

Christian Klein and Dominik Asam have mastered an excellent cloud and AI narrative: The term "Potemkin Village" comes from the unproven story that Field Marshal Grigory Potemkin set up scenes of villages and had the supposed inhabitants transported from one scene to the next in order to deceive Catherine the Great on a trip through Russia about the development and prosperity of the newly populated area, making it seem more successful than it actually was. Exactly what Klein and Asam are doing is not yet known to the SAP community, but is it perhaps not dissimilar to what Potemkin did.
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