SAP makes more executive changes

John Schwarz, seen by some as a potential future CEO, is out of the company

The high-profile shakeup at SAP's top executive levels continued Thursday with the announcement that executive board member John Schwarz, viewed by some observers as a potential future CEO at the company, has resigned.

Earlier this week, SAP replaced CEO Léo Apotheker with board members Jim Hagemann Snabe and Bill McDermott, returning to the co-CEO format it has used in the past.

Schwarz arrived at SAP when the company acquired BI (business intelligence) vendor Business Objects. Before his resignation, he oversaw that technology area as well as SAP's ecosystem and corporate development efforts.

In a statement, Schwarz said the decision to leave SAP was his, and provides him with "an opportunity to step back and think through how I can continue to contribute to an industry of which I have been part for 38 years."

In addition, SAP named Gerhard Oswald, a board member in charge of SAP's service and support operations, as chief operating officer. He succeeds Erwin Gunst, who left his post due to health issues.

Also, Peter Lorenz, executive vice president of small and midsize enterprises (SME), has been awarded a corporate officer post.

The rash of high-level executive changes at SAP follows a rocky couple of years for the enterprise software giant, as license sales slowed due to the weak economy and customers bristled over support fee increases imposed in 2008.

During a conference call this week, co-founder Hasso Plattner pledged to spark new innovation, rebuild trust with customers and restore morale at the vendor.

All told, the changes represent "part of a grand scheme for Hasso to reassume control and direction for the company," said Forrester Research analyst Paul Hamerman. "SAP needed sort of a kick in the pants. The direction they were going in was not good."

But another observer saw Schwarz's departure as "a surprising and rather troubling development."

"We'd been expecting that after a year or so of the new co-CEO set-up, Schwarz might be ushered in as solo CEO," said 451 Group analyst China Martens via e-mail. "That move could also have reconfirmed the continued successful integration of SAP's largest-ever acquisition. We wonder, if like Shai Agassi several years back, Schwarz just wasn't prepared to wait for that kind of a development."

Schwarz was also recently given responsibility for helping turn customer requests into new products, Martens said. Therefore, he could have seen himself playing an awkward middleman's role between Snabe and McDermott, who focus on technology and sales, respectively.

Overall, "Schwarz was a test case for whether an outsider could survive in the top ranks of SAP management," said Frank Scavo, managing partner of the IT consulting firm Strativa, via e-mail. "His departure has to be seen as a failure for SAP to accommodate someone without a long tenure within SAP at that level."

His resignation has to be a discouragement for the top Business Objects people, who SAP needs to keep, as business intelligence is one of the few bright spots in SAP’s portfolio," Scavo added.

Analysts were more positive about the other personnel changes announced Thursday. Oswald is one of Plattner's "trusted lieutenants" and has "the credibility and experience to execute" his new role, Altimeter Group analyst Ray Wang said in a blog post.

Lorenz's appointment to corporate officer, meanwhile, highlights the significance of SMEs to SAP's strategy, analysts said.

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Chris Kanaracus

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