Rocky software market sparks turnover

Times have never been better to snag senior executives who are jumping ship in the turbulent business management software market.

Kim Girard
Kim Girard has written about business and technology for more than a decade, as an editor at CNET News.com, senior writer at Business 2.0 magazine and online writer at Red Herring. As a freelancer, she's written for publications including Fast Company, CIO and Berkeley's Haas School of Business. She also assisted Business Week's Peter Burrows with his 2003 book Backfire, which covered the travails of controversial Hewlett-Packard CEO Carly Fiorina. An avid cook, she's blogged about the joy of cheap wine and thinks about food most days in ways some find obsessive.
Kim Girard
4 min read
Times have never been better to snag senior executives who are jumping ship in the turbulent business management software market.

High-level executives have been walking out of the leading enterprise resource planning (ERP) software firms in droves in recent months, stepping away from a once-golden market that analysts aren't expecting to recover until next year--and never again to its once high-flying growth levels.

The big lure? Start-ups, of course, and the chance to grab a big promotion at one of the hot new quick-growth software companies, including Siebel Systems, which makes sales and customer service software, and supply chain management software companies such as i2 Technologies.

Next week, Oracle is expected to announce it has snagged three more former SAP executives to add to its rank of employees already recruited from the German software giant.

Joining Oracle are John Lee, as senior vice president of process Industries; Tony Kender, as vice president of worldwide human resource Sales; and Michael Klemen, as director of applications marketing for Europe. The three will join Peter Dunning, former executive vice president of global sales for SAP America, who left for Oracle last July and has been a vocal critic of SAP America's chief executive Kevin McKay.

"Everybody wants to be with the company that's the star," said Katherine Jones, ERP industry analyst at market research firm Aberdeen Group. Industry movement also has created an unprecedented opportunity for executives to get big promotions at a new company, she said.

"If you look at them, there aren't a lot of lateral moves across the industry," she said. "These are the good titles these folks weren't able to [get before]."

Executive shuffle all around
Of course, it's not just the ERP market downturn that is causing the executive shuffle. Pleasanton, California-based PeopleSoft watched a parade of executives walk out after the company's technology development projects tripped and its senior management team crumbled.

"PeopleSoft [executives leaving] has been an unmitigated disaster," said Joshua Greenbaum, head of Enterprise Applications Consulting in Berkeley, California. "The exodus started at the most crucial time in the company's corporate history. They were falling behind with technology and e-commerce was just coming out. And [former senior VP of field operations] Al Duffield and [vice-chairman] Aneel Bhushri walked out the door, which has left PeopleSoft absolutely leaderless at a critical juncture in its history."

Whether Craig Conway--the company's new president running day-to-day operations under founder and CEO Dave Duffield--can stop the tide of talent leaving PeopleSoft remains to be seen. While Conway comes from Oracle, PeopleSoft recently lured another new executive, Mike Gioja from SAP, to be its new senior vice president of development.

Meanwhile, more than a dozen SAP America executives from the company's management team in the United States have moved on to competitors and dot com companies--as well as companies that work with SAP on business projects. Complaints have ranged from lack of stock options and compensation for American executives to cultural differences between senior management in Germany and the United States.

While Oracle touts its recent executive coup, an SAP spokeswoman said the firm has also grabbed execs from Oracle, and other companies. She denied that the firm's executive management in United States has been gutted over the past year. She said that 20 remaining senior level executives at SAP America have between five to seven years of experience with the company.

Veterans that have left SAP include former SAP America CEO Paul Wahl and former president Jeremy Coote, who both earlier this year went to Siebel Systems, which will eventually compete head to head with SAP when SAP releases its front office software suite.

Despite those SAP America departures, Greenbaum argued that SAP is still very stable.

"It's been less of an issue in terms of strategy," he said. "That still comes out of Walldorf [Germany]. The very senior executive level is very stable. The technical marketing team is very stable."

Greenbaum said unlike the bigger loss of Wahl and Coote to Siebel, Oracle's recent recruits are "not very senior people."

Nonetheless, Aberdeen's Jones said the "crop rotation" of all levels of executives among the hot new firms is likely to continue.

"These people like to be the winners," she said. "You gravitate toward exposure and power. I think it's probably a positive thing for everybody."

And turnover comes with turmoil in any business, added Rob Kugel, analyst at FAC Equities.

"If you've been successful in this business when times were great, there is nothing more depressing than having to live with a ho-hum business," he said.