SAP continued to aggressively push its operational transformation with the latest move around a revamping of its organizational structure and showing a pair of board members the door. The moves come on the heels of a change in leadership at the company and growing momentum around its cloud initiatives.
The organizational restructuring will see SAP’s sales, service, and related customer service organizations being grouped into a newly named “Customer Success” camp that will be managed by Adaire Fox-Martin, who is an executive board member at SAP and heads up its global customer operations. SAP’s product management, development, and product support organizations will now be grouped together under executive board member Thomas Saueressig.
Most of the company’s former Digital Business Services organization teams will also be integrated into those two larger groups.
SAP CTO Juergen Mueller will now be responsible for delivering the company’s platforms to customers and continuing to manage its overall platform and technology development and intelligent technologies. This will involve closer work with Saueressig’s organization.
SAP is also realigning its main platform units into six broader offerings. The six will be SAP Customer Experience; SAP S/4HANA; People, which includes SAP’s SuccessFactors; Intelligent Spend, which includes its Ariba, Fieldglass, and Concur operations; HANA and Analytics; and its Qualtrics qualitative business. SAP’s Cloud Platform will serve as the underlying technology platform for all six areas.
Company leadership said the revamped SAP structure will provide a more integrated face for its customers.
Executive Board Departures
While some of SAP’s executive board are gaining increased responsibility, others are exiting stage left. The company said that Stefan Ries and Michael Kleinemeier will leave the board in the next few months. Ries has led SAP’s human resource functions and is set to exit at the end of May. Kleinemeier was in charge of SAP’s Digital Business Services and will leave on April 30.
Following the purge, SAP’s executive board will be down to five members.
2019 Turmoil
SAP’s reorganization comes nearly a year after a broader strategic review that has seen the company increase its focus on its cloud business and drive further efficiencies from its operations. One of the goals of the review process was to construct a path toward a 75% cloud gross margin by 2023.
SAP last year saw long-time CEO Bill McDermott abruptly resign after he “decided not to renew his contract.” McDermott within weeks re-appeared at ServiceNow as its new CEO.
SAP quickly named a new co-leadership team of Christian Klein and Jennifer Morgan. Klein is a 20-year veteran at the company, most recently having served as its COO, while Morgan joined SAP in 2004, and had most recently served as president of the company’s Cloud Business Group.
SAP’s first quarter of operations under its new co-leadership structure produced a modest return. Its cloud business did post a 35% year-over-year increase in revenues and showed progress toward SAP increasing its reliance on its cloud business.
More Cloud Power
That cloud business this week was also bolstered by the addition of IBM’s Power Systems being certified for SAP’s HANA Enterprise Cloud managed environment. The service will now be able to run on IBM’s Power9-based Power Systems E980 servers.
The Power9 system was added to IBM’s Cloud last year. It allows customers to access IBM Power Systems virtual servers through a hybrid-cloud environment. For SAP customers this will allow them to run their HANA-based applications in a single node in the IBM environment for increased performance and improved resiliency.
The two companies have been gradually increasing their collaboration since a customer-focused digital transformation push was launched in early 2016.
