Future of SAP

I had the opportunity to spend a few days with SAP executives and found that, despite proven successes, there is a great deal of uncertainty and nervousness at the SAP leadership level.

Of course, the planned departure of CFO Luka Mucic has thwarted, if not destroyed, some SAP plans. In SAP's fifty-year history, Mucic is only the third CFO. You'd look in vain for this continuity in other board positions. Most SAP executive board positions already have almost double-digit turnover.

None of the people I spoke to really wanted to comment on this departure, which came as a surprise to many. Of course, everyone involved knows that Professor Hasso Plattner is very unhappy with the current SAP stock price and repeatedly voices his displeasure at Supervisory Board meetings. Plattner's criticism may be correct, because it is obvious that the low share price is not only due to the current world situation. SAP bears a lot of its own guilt and responsibility here. This circumstance needs a pawn. Of course, it is also possible that SAP and Luka Mucic simply drifted apart - this is said to happen in many marriages.

In the past, Christian Klein and Luka Mucic have repeatedly called for a higher share price based on SAP's successes. It may be that many financial analysts have used double standards here: If SAP were a start-up with its cloud offering, the share price could possibly be twice as high. What SAP must be blamed for in any case is the very rudimentary and inadequate communication. Is there an impressive narrative for SAP's future? Is there a comprehensible strategy? Storytelling at SAP boils down to three terms: Hana, S/4 and Rise.

During my conversations, I was able to hear that despite all the past successes, Professor Plattner does not feel much like celebrating. There was a 50-year celebration in Hamburg at the Elbphilharmonie, and there is to be another event at the SAP Arena. At the end of his term on the SAP Supervisory Board, he wants to be elected Chairman for another two years. Is his SAP imploding? The CFO is leaving the (sinking) ship, his planned successor (Gerd Oswald) will in all likelihood not be available as Supervisory Board Chairman, SAP has poor communication, no narrative, no storytelling for the financial analysts and no product strategy for beyond Hana and S/4.

In my current conversations, it almost sounded like an apology: But we promised that S/4 would remain in maintenance until 2040. That may be a nice message for the many existing SAP customers who won't have completed their S/4 conversion until beyond 2030. But it's no help to me. I have to develop an ERP future concept for my own board in the next three years - that's why I was with SAP executives for a few days. I wanted to get information about an S/5, S/6 and S/7 and finally find out how to proceed with Hana, because I haven't believed in a Hana 3 for a long time, like Editor-in-Chief Färbinger.

I can now well empathize with Hasso Plattner's desperate situation: I felt the speechlessness, the lack of a narrative and the disorientation. All my interlocutors were anxious and committed. But at the same time they seemed overwhelmed and helpless in the face of a low share price, the ongoing loss of CRM market share to Salesforce, and the cloud threat from ServiceNow, Workday, Google, and many others.

It must also be said that SAP made many strategic mistakes: dropping Celonis and relying on Signavio, which is to be saved with the help of Professor Scheer, is not a brilliant performance by Rise inventor Christian Klein. And not even Rise gets SAP to fly. So the nervousness and dissatisfaction have their reasons. So the result of my visit was not the arming with new arguments, but the realization that the future of SAP seems very diffuse at the moment.