SAP is losing one of its younger, vibrant executives who was slated to become co-CEO of the company in a change that one analyst says marks a return to the old guard.
"It looks like the new guard is being pushed out by the old guard," said Denis Pombriant, managing principal at Beagle Research.
Shai Agassi, president of the product and technology group, will leave the company effective April 1, SAP said on Wednesday.
Agassi was scheduled to become co-CEO of SAP when Henning Kagermann leaves the job of CEO. However, SAP chairman Hasso Plattner asked Kagermann to retain his position until 2009 instead of leaving the job this year so that he could continue to lead the company through planned new product launches.
"Most likely, [Agassi] wasn't happy when I asked [Kagermann] to stay until 2009," Plattner said, speaking during a conference call to discuss the changes. "He has told me this is not the last thing he wants to do in his life."
Rather than wait additional years to take on the leadership position at SAP, adding to the time he'd spend working at SAP, Agassi decided to leave the company now to commit his time to other interests. He'll pursue new business opportunities in alternative energy sources and environmental policy, SAP said.
Leo Apotheker, currently president of customer solutions and operations, will immediately take on the new role of deputy CEO. Apotheker was previously slated to be co-CEO along with Agassi.
"I really want to reiterate again that Shai leaves on good terms," Plattner said. Agassi will continue to serve as a special consultant with Plattner on technology innovations and competitive trends, maintaining his office at SAP's Palo Alto, California, campus, Plattner said.
Despite reassurances from the remaining SAP executives, analysts wonder how the leadership changes will affect SAP's plans. Agassi is credited with spearheading SAP's NetWeaver and on-demand initiatives, Pombriant said. "These two things were absolutely critical to SAP's success," he said. "If he's not there to push these initiatives, I wonder if there's anyone else who can."
In addition, the initiatives Agassi developed will result in a change in the financial model at SAP from a licensing model to an on-demand model, he said. "The revenue streams are going to look very different, and that can be very challenging and upsetting to major investors," Pombriant noted. SAP may struggle in the face of that transition without Agassi's leadership, he said.
The executive changes are not at all related to the most recent lawsuit that Oracle filed against SAP, charging SAP with stealing corporate information, Plattner said.
SAP also outlined further organizational changes that will take place with Agassi's departure. Executives who run SAP's NetWeaver, SAP Business Suite, CRM, collaboration, and software development for the business user will report to Kagermann. Executives who run marketing, SMB, partner activities, and global regions, including Europe, the Middle East and Africa, the Americas, and Asia Pacific will report to Apotheker.
SAP also said it formed an executive council, made up of the company's corporate officers. The council reports to the executive board and will be responsible for customer-facing and product strategies.
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