Agassi's Departure Realigns SAP

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Following His "Passions"

SAP is also facing new competitors that were born on the Web, such as Salesforce.com (CRM) and Workday, the application software company launched late last year by Duffield (see BusinessWeek, 11/13/06, "A Fifth Startup? It's All In A Workday"). Agassi's departure could set back SAP's efforts to deliver applications online, possibly even hampering growth in the overall market, says Workday CEO Duffield.

Agassi joined SAP six years ago when it bought his software company, and he was handpicked by Hasso Plattner, chairman of SAP's supervisory board and a company founder, to make the staid software maker more aggressive. Within a year, he joined SAP's executive board. But Plattner said in a conference call on Mar. 28 that he'd asked Agassi to make a 10- to 15-year commitment to the company, an arrangement Agassi declined. SAP also extended Kagermann's contract, set to expire at the end of 2007, until May, 2009. Agassi was displeased with the decision and didn't want to wait to assume the top job, according to Plattner. "He's so young. I said, 'I can't understand this.' But he has other plans," said Plattner. "I'm disappointed, but this is looking backward."

Agassi says his interest in starting a business devoted to improving the environment trumped his commitment to SAP. "I asked myself, 'What are the passions that drive me forward?' In the next 10 years of my life, which would have more impact? And climate change is where I can make more impact," he says (see BusinessWeek.com, 3/29/07, "Q&A with SAP's Shai Agassi").

SAP said Agassi's departure is unrelated to a lawsuit Oracle filed against SAP Mar. 22 that alleges that SAP employees stole some 10,000 computer files from Oracle servers (see BusinessWeek.com, 3/29/07, "Oracle vs. SAP: Sound or Fury?"). "It has nothing to do whatsoever with Oracle," said Plattner.

The Next CEO

According to Agassi, SAP told him more than a year-and-a-half ago that he and Apotheker would become co-CEOs after Kagermann retired in 2007. "The idea was that after five years with Leo, I'd do five years on my own," Agassi says. "So it was a many-year commitment." Meanwhile, his idea for starting a business that would allow "massive conversion of cars to electric vehicles" gathered steam after a round of meetings at the World Economic Forum in Davos, Switzerland, in January.

That leaves Apotheker, a vibrant character who's fluent in five languages but lacks technical expertise, likely next in line for the top job at SAP. But during the conference call, Plattner declined to coronate him early. Plattner said on the call that he's not letting anyone talk about succession, however "extraordinary and elevated" Apotheker's position with SAP.

If Apotheker's star continues to rise though, it could be an unexpected but shrewd move for a company whose founders include ex-IBM engineers. As much as the company needs a skilled technologist, it may require a marketer just as urgently. "They need the next CEO to be more sales and marketing oriented, which is how they're going to win or lose in the next few years," says AMR's Friscia. "They're out there competing fiercely with Oracle, and they need to execute flawlessly."

Ricadela is a writer for BusinessWeek.com in Silicon Valley. With Steve Hamm in New York.