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HP strikes back at Oracle with SAP CEO pick

Apotheker more Hurd than Hurd

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Comment Let's see, now. If I was a big Oracle partner and I really wanted Larry Ellison to go ballistic, what's the worse thing I could do?

How about elect the former CEO of SAP – one of his most hated rivals – as my CEO?

Well, that's what Hewlett-Packard has done in what looks an awful lot like a strike back at Ellison after he attacked the HP board for booting his friend and tennis buddy Mark Hurd. In a final fuck-you to HP's board, Ellison hired Hurd at Oracle.

Such a strike must be the only reason HP has put Leo Apotheker at the helm, because the clutch of clichéd reasons the company has given for Apotheker's recruitment just don't stand up.

According to HP, Apotheker is a "strategic thinker" with "global experience", "proven operational discipline", and a "strong track record of driving technological innovation." The world's second largest PC company said Apotheker helped SAP to 18 consecutive quarters of double-digit revenue growth between 2004 and 2009.

Apotheker is "operational" all right, and in the post-Fiorina era, HP certainly wants operational types in the CEO role – i.e. people unlikely to hog a stage with Gwen Stefani in Las Vegas.

Before he ascended to the top of SAP, Apotheker served as president of customer solutions and operations at the company. A 20-year SAP veteran, he joined as CEO of SAP France in 1988, and he was a field man managing partners and customers.

A remarkable leader he's not, and he's certainly no visionary. He shares responsibly for the fact that SAP is now banging its head on the inside walls of the enterprise IT cage, with no real clue how to get out.

And he wasn't CEO of SAP for very long. Apotheker only became SAP's CEO in May 2009, having taken over as deputy CEO in April 2007 and then as co-CEO with Henning Kagermann in April 2008.

When Kagermann went Apotheker took on the role full time, but by February 2010 things hadn't gone as expected and there was a "mutual agreement" with the board that his contract would not be renewed. He was unwilling to again share the CEO's position, and SAP promptly reverted to co-CEO leadership under former head of field organization Bill McDermott and product development head Jim Hagemann Snabe.

Strike one: Apotheker lacks solo-top leadership experience.

During his time near the top, Apotheker - along with the rest of SAP's conservative leadership - failed to predict the transition to software delivered online and the swing away from monolithic suites of software running on the server sweeping through SAP's customer base.

And the company ended up losing business to Salesforce.com.

Customers not first

Apotheker talked of putting customers first, but SAP's true loyalty was to its systems integrators and consultants. These companies make a lot of money customizing the notoriously complicated set of modules that comprise SAP, tailoring it to customers' needs. Often, if you hear of an ERP implementation going awry, it's an SAP implementation. And by "awry," we mean late and over budget – and quite probably scrapped.

SAP didn't champion customers, it squeezed them. During Apotheker's co-CEO tenure, SAP raised its software maintenance and support fees, ignoring the software-as-a-service revolution.

In 2008, SAP introduced an increase in the basic software support package from 17 per cent of a customer's standard licensee fee to 22 per cent - a move that sparked a revolt and went on to hurt SAP financially.

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