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SAP tries tag-team for CEO transition

Leo Apotheker takes on the job of co-CEO at the enterprise software maker with Henning Kagermann as the latter prepares for his postponed retirement in May 2009.

With the appointment of Leo Apotheker to the post of co-CEO, SAP is trying a tag-team, two-in-the-box CEO transition strategy it has used before.

Leo Apotheker SAP

Apotheker's new role had largely been anticipated, following his appointment as deputy CEO more than 12 months ago. Apotheker will assume the co-CEO position immediately and join current CEO Henning Kagermann at the head of the table. Kagermann plans to retire in May 2009.

The enterprise software giant used a similar game plan when grooming Kagermann as the successor to SAP co-founder Hasso Plattner.

"Henning Kagermann requested that the supervisory board appoint Leo Apotheker as co-CEO in order to prepare him as successor in the best possible way during the remainder of Henning's tenure," Plattner said in a statement Wednesday. "After years of massive investments and the successful launch of trendsetting innovations in the areas of service-oriented architecture, new solutions, and business models for the midmarket...SAP now faces the task of boosting the application of these innovations among our customers and end users."

Henning Kagermann SAP

For SAP, naming Apotheker to the co-CEO slot firmly locks in the executive transition plans, which previously had been a distraction at the company when it was a two-horse race between sales chief Apotheker and whiz kid technologist Shai Agassi. Agassi resigned last year from SAP.

Kagermann's contract originally was due to expire at the end of 2007, but partway through that year it was extended to May 2009.

SAP also announced three new members to its executive board: Erwin Gunst, president of SAP's Europe, Middle East and Africa region; Bill McDermott, CEO of SAP Americas and Asia Pacific Japan; and Jim Hagemann Snabe, managing director of the SAP Nordic region and general manager for SAP's global industry solutions development.

The three executives will join the executive board July 1.

After joining the board, Gunst will fill the newly created position of chief operating officer; McDermott will eventually take over SAP's sales efforts worldwide, a role formerly held by Apotheker; and Snabe will oversee development of SAP Business Suite and SAP NetWeaver, two major focuses for the company. NetWeaver serves as the back-end middleware that connects SAP data with other applications and its SAP business suite.

Update: Wednesday, April 2, 10:30 a.m.

With the addition of the three new executive board members, SAP's Peter Zencke, who heads SAP's application platform and research will step down this year, when his term expires. Zencke was responsible for SAP's major mid-market on-demand applications effort Business ByDesign, and had only wished to extend his contract long enough to complete the work. Zencke, who wants to send more time on his family and himself, will continue on as a consultant to the company through next year, however.

SAP's chief financial officer and executive board member, Werner Brandt, has a contract with the company that is due to expire next year. The issue of whether Brandt's contract will be extended will be addressed far in advance of its expiration, said Kagermann during a conference call with reporters Wednesday.

Kagermann and Apotheker together addressed the media in the conference call, noting such highlights as:

• Apotheker, in his new role, will be responsible for industry development; and, in the second half of the year, work with his new team to develop SAP's budget. And as Kagermann begins to hand over an increasing number of his duties to Apotheker next year, one of those tasks include serving as the front man to communicate SAP's strategy to the market, customers and industry.

• Apotheker cites execution on SAP's strategy as his top priority and challenge as the new co-CEO. "We want to delight our stakeholders, our customers," he noted. SAP has a growth strategy that includes business intelligence via its mega-acquisition of Business Objects, a revamp of its product line to run on a service-oriented architecture (SOA) , and its on-demand offering via Business ByDesign.

• SAP plans to slightly reduce its spending on research and development, now that it has a number of its major technology efforts winding up. And, the enterprise applications giant plans to put some of that focus on delivering those technologies to customers, a.k.a. sales.

• Henning, as he enters 2009, will begin to consider how he will spend the next chapter of his life, once he retires next spring. For now, he hasn't made any decisions.

See also: Dennis Howlett's take on ZDNet