SAP's Tough Guy Ready to Rumble

New deputy CEO (and likely next top boss) Léo Apotheker is not afraid of Oracle's Ellison, or of any other challenge facing the software maker

by Jack Ewing

Léo Apotheker, deputy chief executive officer of German software maker SAP (SAP), tells about riding in the cab of a giant forklift recently at a vast Coca-Cola (COKE) plant in northwest France. The facility is a showcase for SAP's warehouse management software—even the forklift cabs are equipped with touch screens that drivers use to continually enter information that is then fed into a central database. "I wanted to see how these guys work," said Apotheker.

But as he clung to the speeding vehicle, Apotheker realized how tough it was for the operator to accurately tap in data while wearing gloves and driving 20 mph indoors. "The guy actually turned to me and said, 'You're from SAP. Can you help me?'" Apotheker recalls.

If anyone can, he can. Named deputy CEO in March, Apotheker has become the overwhelming favorite to succeed current CEO Henning Kagermann when he retires in 2009. Apotheker, 53, will be the first SAP CEO who comes from a background rooted in customer relations and operational management, in contrast to the software developers who have run the company since its founding in 1972.

A Worthy Rival

Apotheker will be a departure for SAP—as well as corporate Germany—in other ways, too. Though born in Aachen, Germany, Apotheker grew up in Antwerp and later spent a decade studying and working in Israel before settling in Paris, which he still calls home. An urbane wine connoisseur fluent in six languages, Apotheker is known for toughness and will likely take a more confrontational stance toward Larry Ellison, CEO of archrival Oracle (ORCL).

Asked about his rival, Apotheker first says he will continue SAP's policy of taking the high road in response to Ellison's verbal jabs. Then, with a smile, he deadpans, "I'm not here to educate Larry Ellison. He should have been raised better."

Apotheker has been a central figure at SAP for years. But his public profile became more pronounced at the company's Sapphire customer and partner convention in Vienna, which ended May 16. Apotheker took center stage, literally, delivering the keynote address on May 15 to some 8,000 listeners—a number that reflects the fundamental role that SAP software plays in the day-to-day operations of about 40,000 companies.

Insisting on Accountability

Dressed in a dark blue suit, Apotheker paced energetically in front of a rectangular screen wide enough to accommodate giant live images of himself at both ends and PowerPoint-style graphics in the middle. Asked later what it felt like to speak in front of such a grandiose display, Apotheker joked, "The trick is never to look behind you."

While he often displays a self-deprecating sense of humor, Apotheker is notoriously hard-nosed. "Henning Kagermann and [Supervisory Board Chairman] Hasso Plattner are both tough guys, but Léo is the toughest of them all," says Ed Thompson, an analyst at market researcher Gartner who follows SAP. Apotheker concedes that he is more emotional and impatient than the cerebral Kagermann. Apotheker says his father, a textile trader, never allowed his children to claim that mistakes were not their fault. Now SAP employees get the same treatment. "I do not accept silly excuses for non-performance," Apotheker says.

That brand of management may be needed at SAP right now.