Designing, not managing, right?

The starting point for the discussion among my regulars was two comments about the salary of SAP CEO Christian Klein on the web portal handelsblatt.com. To clarify: his salary is astronomically high for a DAX-listed company. Compared to other countries, and in particular the USA, it is a modest living. I think that he could earn even more if his SAP salary, including bonus and share program, is booked as "compensation for pain and suffering" - because who wants to work at SAP in these times? But that's another story.

One aspect of the discussion on handelsblatt.com was the relationship between salary and visible performance: does Christian Klein now shape SAP development or does he merely manage the assets? This question is of course of particular concern to us existing customers, because ultimately the future of our ERP depends on it. Are we customers of an innovator or is our ERP supplier in the innovator's dilemma, see Clayton M. Christensen (1952 to 2020)?

There are two commentaries on handelsblatt.com about SAP CEO Klein's salary: one pro and one con. The pro text was discussed much more emotionally at the SAP regulars' table, because although almost all the regulars are free of envy, they do not want to agree with the Handelsblatt author's argument. The latter justifies Christian Klein's salary with his innovative and forward-looking corporate management. In detail, the pro-commentary emphasizes cloud computing - which in our view is precisely the biggest SAP construction site and the cause of the rise and grow disaster.

SAP was led onto the cloud roadmap by former CEO Bill McDermott. His approach to this technology was of course purely commercial: he bought one cloud company after another until the coffers of then SAP CFO Luka Mucic were empty. His successor Christian Klein then had to clean up, consolidate and orchestrate. Klein turned the cloud conglomerate into a sufficiently consistent ERP landscape. He did not do this job voluntarily. He had to be actively motivated from the background by Hasso Plattner and Gerd Oswald. But the result is impressive, even if it is less innovative and far-sighted than technical and pragmatic.

However, the pro commentary ultimately emphasizes the small-scale vision of cloud computing and attempts to justify the high salary with this SAP cloud roadmap. However, my SAP regulars' table agrees that this is in no way the case: now that the hyperscalers have already set the direction and prices, and other IT providers such as Oracle and IBM have already set off in the direction of the cloud, SAP had no other chance than to follow this path as well. The start was bumpy and inconsistent. In the meantime, SAP has learned a lot about the cloud and the services make sense, albeit still at a far too high price - compared to the hyperscalers mentioned above.

There are regulars who successfully use SAP's selective cloud services. However, none of us would think of defining it as a stroke of genius by Christian Klein. The SAP CEO manages the legacy of Professor Hasso Plattner conscientiously and accurately, but ultimately he follows IT megatrends such as cloud and AI at a safe distance. SAP has long ceased to tread its own innovative paths. IT revolutions such as a three-tier client/server model or in-memory computing date back well over ten years.

What other IT groups leave by the wayside, SAP is happy to take up: A semantic layer for the SAP Business Data Cloud is currently being created from graph and vector databases, and around 300 AI functions for ECC 6.0 and S/4 based on the Business Technology Platform (SAP BTP) are being formed from the use of various LLMs. SAP is making rapid progress under Christian Klein and my regulars' table is grateful for this, but we would be even happier if more innovative and forward-looking design and less license-heavy management were implemented.