Investors puzzled by shock exit of SAP boss

City A.M. Reporter
GERMAN software group SAP has ditched its chief executive of just seven months, surprising a market he failed to win over during his tenure and leaving investors wondering where the world’s top business software firm heads next.

SAP announced Leo Apotheker’s abrupt departure, replacing him with immediate effect with a new management team expected to inject a clearer sense of direction at the helm.

“This step comes as an absolute surprise,” DZ Bank analyst Oliver Finger told clients in a research note. “[It] should increase short-term uncertainty about SAP’s future strategy” and hit the firm’s shares.

SAP said it was returning to its traditions of split leadership with Bill McDermott, head of the field organisation, and Jim Hagemann Snabe, product development chief, both already members of the executive board, taking the helm.

McDermott, who is based at SAP’s US headquarters in southeastern Pennsylvania, played a lead role in sharply raising SAP’s share of the key US market. Snabe, a mathematician, is in charge of rolling out SAP’s Business ByDesign software suite after several missteps and delays.

It said Apotheker ’s departure was by mutual consent and did not elaborate on why he had been eased out. He was behind SAP’s $7.5bn (£4.8bn) acquisition of business intelligence maker Business Objects -- SAP’s only acquisition to date on this scale. Software licensing and maintenance fees account for the bulk of sales at SAP, whose main competitors include Oracle and IBM. The stock closed down 2.5 per cent €32.56 (£28.51).