SAP: No Change at the Top as Board Extends CEO Contracts

SAP announced Thursday that its supervisory board has extended the contracts of co-CEOs Jim Hagemann Snabe and Bill McDermott until June 30, 2017, in a move that could give customers confidence that the company remains committed long-term to its strategies for mobile computing, analytics and SaaS (software as a service).

McDermott and Snabe made their mark on SAP shortly after being appointed co-CEOs in early 2010, following the departure of CEO Leo Apotheker, who since took the top job at Hewlett-Packard.

Last May, SAP purchased Sybase in a US$5.8 billion deal that gave it a mobile middleware platform, databases and other technology. The company has also been pushing on-demand software products such as Business ByDesign, an ERP (enterprise resource planning) suite that also serves as a development platform for other SaaS applications.

The HANA (High Performance Analytic Appliance) in-memory computing engine is another major area of focus for SAP of late, although executive board member Vishal Sikka and SAP co-founder Hasso Plattner are considered the main driving forces behind it.

Snabe and McDermott’s contract extensions recognize “their extraordinary achievements in leading SAP’s successful growth performance during their tenure,” Plattner said in a statement.

Also Thursday, SAP said that it has extended executive board member and chief operating officer Gerhard Oswald’s contract through June 30, 2014.

The board’s decision means a couple of other things, according to one observer.

“They still believe in the co-CEO role,” said analyst Ray Wang, CEO of Constellation Research. “The company’s big enough and complicated enough that the responsibilities can still be divided between the two.” Snabe oversees product development, while McDermott concentrates on sales and channel development.

It also means “there are no other successor candidates in the background,” Wang added.

SAP customers should take note of the contract extensions, Wang said. “Stability of leadership is important. SAP is going through a transition, and the important thing to know is the leaders that have been picked are going to be around for a while.”