Triple farewell

The real story begins where SAP co-founder and judge of character Dietmar Hopp finally left his company.

Hopp has many extraordinary talents, but his knowledge of human nature is what sets him apart: He put together the team that founded SAP almost fifty years ago.

For him, it was a logical step, because to this day Dietmar Hopp has remained a team player and he sponsors numerous team sports with a lot of his own money. The five founding members have grown into a leading global group.

But because Hopp withdrew from the Executive Board and Supervisory Board at an early stage, a gap was created that has not been closed to this day and leads to escalations at SAP at regular intervals.

Human resources management, the selection of suitable top executives, the retention and further development of top managers - all this is a major construction site at SAP.

Hasso Plattner, like Dietmar Hopp, is endowed with many talents. Since he has chaired the Supervisory Board, one personnel disaster after another has occurred. Until this year, however, SAP's foundation was robust and his fellow board members experienced enough to preserve the values that had been handed down.

Now there is a triple farewell: Two top managers have left the Group for whom there will hardly be any replacements in this form; and the paradigm shift to a sales culture has been initiated.

This year, SAP is probably saying goodbye to its tradition of being a technically innovative manufacturer of standard business software.

When SAP CEO McDermott wants more revenue and more products on the shelf, he no longer commissions his own developers, but takes over other companies for a lot of money. This is a farewell to the successful SAP virtues.

McDermott not only fired his fellow board member Bernd Leukert in a cloak-and-dagger move and let his president for SAP Cloud Platform go - probably to Google - but also threw his own employees under the bus with the $8 billion purchase of Qualtrics last year.

Now it lacks the best man for its cloud-first strategy, and thousands of developers, programmers, and Hana and Abap experts are being laid off worldwide (see also www.thelayoff/sap-ag).

The first goodbye: Bernd Leukert's star began to fall about 18 months ago. At that time, McDermott increased the pressure on the Executive Board to generate more revenue. At the time, an SAP Supervisory Board member told E-3 magazine: "The Executive Board is all about sales, sales, sales.

Perfect training

Bernd Leukert is an SAP native and an old hand. He joined SAP immediately after graduating. Executive Board member Gerd Oswald became aware of Leukert and took him on. The conscientious Oswald did not want to leave the service area to just anyone after his retirement.

Oswald originally set his sights on Michael Kleinemeier as his successor, but Kleinemeier also had other plans outside the SAP universe. Michael Kleinemeier had already been Managing Director at SAP partner Itelligence before becoming SAP's Managing Director for Germany.

Kleinemeier therefore knows the inside and outside view of SAP. Leukert, on the other hand, only knows SAP and was thus a good and reliable replacement in Gerd Oswald's training program.

However, Oswald and Leukert made their plans without the "risk factor" Hasso Plattner.

After Plattner made his first "adopted son," Israeli Shai Agassi, Chief Technology Officer against some resistance and then just as quickly dumped him, Plattner found an equal successor in mathematician Vishal Sikka.

Sikka is from India and studied at Stanford University in California.

Together with Vishal Sikka and Alexander Zeier, Professor Plattner developed the in-memory computing database Hana at the Hasso Plattner Institute at the University of Potsdam.

There was another rift in the SAP house: Vishal Sikka had to leave overnight. There were rumors on Friday, the Supervisory Board met on Sunday evening, and on Monday Bernd Leukert presented himself as the new Chief Technology Officer.

That was in 2014. Sikka went to Infosys as CEO, where he also only lasted three years. Neither Shai Agassi nor Vishal Sikka are currently known to have any significant professional activities.

On Monday, May 5, 2014, Bernd Leukert will be introduced as the new Chief Technology Officer, and by the end of the week he will already be on a plane to Palo Alto to clean up what Sikka left behind.

After twelve years, Vishal Sikka left the company without giving any reasons, and Hasso Plattner also remained silent.

The fact is, however, that it had already been planned for some time that co-CEO Jim Hagemann Snabe would move to the Supervisory Board, making Bill McDermott the sole head of SAP, which would have made Sikka his logical deputy.

Agassi, Sikka and Leukert

Was history repeating itself back then? There was visible tension between ex-SAP CEO Henning Kagermann and Chief Technology Officer Shai Agassi. Now, ex-chief technology officer Vishal Sikka apparently failed against SAP CEO McDermott and supervisory board chairman Plattner.

There are two more important events from 2014 that should be noted, because they have a lasting impact on the present and, in retrospect, heralded the departure from the "old" SAP business model.

First, Bill McDermott successfully "ousted" his co-CEO to the Supervisory Board, where the latter had long been traded as a successor to Supervisory Board Chairman Hasso Plattner. But Jim Hagemann Snabe preferred to leave the "snake pit" SAP and become Chairman of the Supervisory Board at Siemens.

Second, because Bernd Leukert became the quick replacement for Vishal Sikka, Gerd Oswald was left overnight without a verified successor.

The problem was solved by extending Oswald's contract several times until Michael Kleinemeier became available again after his journey of experience outside the SAP universe and moved directly into the SAP Executive Board as Oswald's successor.

It now seems to be an irony of history that, following a reorganization on the SAP Executive Board, Leukert should actually have been Kleinemeier's successor. But now, after Leukert's departure, Kleinemeier in turn has extended his Executive Board contract by one year, as Oswald did before him.

Oswald extended his contract three times, each time by one year - we'll see how often Michael Kleinemeier is persuaded to do so. In the meantime, Gerd Oswald has joined the SAP Supervisory Board, where he is being considered as Plattner's successor instead of Jim Hagemann Snabe.

As a member of the Supervisory Board, Oswald was unable to prevent the departure of Bernd Leukert and thus also the departure of a successful SAP concept.

Bill McDermott seems to have not only successfully gotten rid of his ex-co-CEO Snabe, but also seems to have successfully transformed his SAP into a sales organization that no longer develops products, but buys products and market share!

After 25 years with SAP, Bernd Leukert is no longer a member of the SAP Executive Board as of 0:00 on Thursday, February 21, 2019.

Before that, he had to give up his engineering job in the fall to the new "Plattner stepson," Jürgen Müller, who earned his doctorate at the Hasso Plattner Institute at the University of Potsdam.

SAP announced that Bernd Leukert, member of the Executive Board, has mutually agreed with the Supervisory Board that he will leave the company immediately.

At the same time, SAP's Supervisory Board decided to extend Michael Kleinemeier's Executive Board contract until the end of 2020.

SAP's press release quotes Professor Plattner:

"Bernd Leukert has contributed a great deal to SAP's success. We thank him for his commitment and his many years of service to the company. Michael Kleinemeier is highly valued by our customers. We are pleased that he will continue to be available to the company in the future."

Leukert and Kleinemeier

Leukert, who headed the Digital Business Services unit together with Kleinemeier, has a long history as an executive at SAP.

In his career, he has been successfully involved in numerous initiatives and developments. On topics such as business applications, Industry 4.0 and digitalization, he enjoys an excellent reputation in the technology industry.

"I am very proud to have been part of the SAP Board and to have introduced the most groundbreaking innovation in our industry, SAP S/4 Hana, to the market"

Leukert said.

"I sincerely thank Hasso Plattner and the Supervisory Board for their many years of trust and support."

Anyone who can read understands: In the press release there is neither the name nor a quote from SAP CEO Bill McDermott!

Unlike the two previous terminations of the respective SAP Chief Technology Officer by Hasso Plattner, this time Bill McDermott is likely to have been the driving force - anyone who knows Bernd Leukert well will no doubt find this development logical.

In recent years, McDermott transformed its board into a sales organization. Sales and profits matter more than customer loyalty, reliable roadmaps and sustainable product development.

The confrontation with an experienced Chief Technology Officer was inevitable. It may be comforting for Bernd Leukert that any other "technician" would also have clashed with the "salesman" McDermott.

Whereas on Wednesday, February 20, the matter passed off relatively quietly. Bill McDermott took precautions so that there was no escalation - but the extent to which this was an amicable solution will be definitively clarified in the future.

Officially, Leukert's Executive Board contract would have been valid until March 2021.

Goal: Sales organization

The messed-up conditions at SAP are not made any better by the change in paradigm from an IT systems house with strong in-house software development to a sales organization that buys products and market share.

On the contrary, the marketing and sales performance of a Bill McDermott is not made any more credible by farewells like that of Björn Goerke.

For many years, McDermott has focused on the "cloud computing" paradigm.

He never tires of preaching his cloud-first strategy, and it's in this situation that he loses his most important man.

Actually, in a double sense, because Björn Goerke was not only SAP Chief Technology Officer (CTO) and President SAP Cloud Platform, but also Bernd Leukert's unofficial deputy.

When Leukert was unable to attend, Goerke would come with his unique, unrivaled SAP TechEd keynotes.

No one else at SAP lived "technology" like he did. Björn Goerke not only explained NetWeaver, Abap, Hana and the cloud platform, but also invented wonderful sci-fi stories to go with it.

He combined visions of SAP with real-life situations that took him to Mars (The Martian - Save Mark Watney) or to the command bridge of Starship Enterprise.

If Björn Goerke really does go to Google, many SAP mentors could follow him and develop on Android instead of programming in Abap in the future. However, it is also known that Goerke is a big Apple fan and lives near Palo Alto, California.

Hana needs a makeover: In one of his first press conferences as Chief Technology Officer, Bernd Leukert hinted that there was plenty to clean up after Vishal Sikka.

Among other things, he used the word "retread" in connection with the in-memory computing database Hana. Which subsequently did not really succeed, even though in 2016 at SAP TechEd in Barcelona it was precisely Leukert who presented the "Hana 2" product.

Engineering Virtues

Bill McDermott is saying goodbye to SAP's engineering, which has fatal consequences: The purchased products such as SuccessFactors, Concur, Ariba, Fieldglass, etc. are only rudimentarily synchronized with the SAP core system.

The "single point of truth" is in no way guaranteed with S/4 and Hana, nor do the purchased cloud solutions have amazing lives of their own.

SAP's existing customers are busy with interfaces and import and export functions - while McDermott and his board members sell, sell, sell. Could Bernd Leukert have reported these "skeletons in the SAP closet" to Hasso Plattner?

The fact is that McDermott said goodbye to many SAP engineering virtues and ultimately said goodbye to Leukert before the latter spilled the integration beans to Plattner.

But how the 8-billion-dollar Qualtrics thing will ever be integrated into ex-Hybris, now C/4, and how this merger with the SAP ERP core can take place is a very big Walldorf mystery to the vast majority of experts in the SAP community.

Seen in this light, some SAP employees were not entirely unhappy about the replacement of Bernd Leukert as Chief Technology Officer - not all of them trusted him with the difficult job of integration and consolidation. Whether his successor Jürgen Müller will make it is far from decided.

But how Bill McDermott will survive without Björn Goerke and with a heterogeneous cloud landscape is also unknown.

In addition, he has the problem of needing a successor for Michael Kleinemeier in the next 24 months.

However, the short-term danger seems to have been averted that someone will tell Hasso Plattner that the cloud solutions bought together by McDermott don't really want to harmonize and that orchestration may still take years, during which Salesforce, Workday, Microsoft and IBM will escape uncatchable.

Technologically, things look very sad for the ingenious salesman Bill McDermott: The departure of Bernd Leukert, Björn Goerke and the more than 4,000 SAP technicians and programmers up for termination is a disaster for existing customers and the SAP community.

What will happen to Hana when, for example, entire Hana labs with 250 SAP employees are dissolved (see www.thelayoff/sap-ag)?

Summary

The old order would have been restored. Bernd Leukert would have succeeded Board member Michael Kleinemeier in the Digital Business Services unit.

At one time, Leukert was prepared for this role by ex-SAP board member Gerd Oswald (now an SAP supervisory board member) because Kleinemeier was planning to retire at the end of 2019. Now Kleinemeier has extended his term by one year and will have to look for a new successor.

What Bernd Leukert will do is not yet known, and whether Gerd Oswald thinks this development is right from the perspective of an SAP Supervisory Board member is also unknown.

The fact is, however, that years of personnel planning at SAP are imploding: Leukert will not succeed Oswald Kleinemeier, and the new SAP Chief Technology Officer is not Björn Goerke, but Jürgen Müller - you have to study in Potsdam.

Goerke is rumored by the SAP community to be moving to Google.

SAP CEO Bill McDermott doesn't have an easy year ahead of him, and if SAP's share price doesn't pass the 100-euro mark soon, McDermott will also have to fear for his job.