SAP’s CEO Bill McDermott exits office after a decade of service

EUROPE – Bill McDermott, the immediate former CEO of SAP retired from office in October this year and will be replaced by Jennifer Morgan and Christian Klein who will be working together as co-CEOs.

McDermott exits office after a decade building up SAP into the world’s leading enterprise software company.

Morgan and Klein will now oversee operations of the technology group having been handed the task of completing SAP’s transition to cloud computing by the exiting chief executive.

The executive changes which according to SAP took place with immediate effect occur at a time when the company posted its third-quarter results that showed it gaining traction in its drive to offer a more streamlined range of services and boost profitability.

The announcement brings down the curtain on an era in which McDermott struck a string of multi-billion-dollar deals that established SAP as Europe’s pre-eminent technology group but also created complexity that may have led to frustration among many clients.

“SAP would not be what it is today without Bill McDermott,” said Hasso Plattner, a co-founder of SAP who chairs the company’s supervisory board.

“Bill made invaluable contributions to this company and he was a main driver of SAP’s transition to the cloud, which will fuel our growth for many years to come.”

The new leadership according to Reuters combines Morgan’s focus on customer relationships in SAP’s North American markets with Klein’s background in process innovation that is rooted in SAP’s German heritage.

Morgan, a polished saleswoman who joined SAP in 2004, was handed board-level responsibility for cloud and ‘go-to-market’ operations.

Klein, who came to SAP as a student, was promoted to the position of chief operating officer.

He has managed SAP’s flagship S/4HANA database – the ‘brain’ for applications that include finance, human resources and logistics.

McDermott’s exit follows the entry this year of activist investor Elliott, amid broader market concern that his acquisitions – including last year’s $8 billion deal to buy customer relationship platform Qualtrics – had caused SAP to lose focus.

He responded by launching an efficiency drive, promising to expand profit margins by 5 percentage points through 2023.

After a wobble in the second quarter, SAP’s latest results showed the strategy shift was delivering positive results.

Growth in new cloud bookings more than doubled to 38%, lifted by a major three-year cloud deal with an unnamed partner, while operating margins expanded by an underlying 1.7 percentage points.

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