SAP Shakes Up U.S. Operations

Facing stagnant growth in U.S. corporate spending, German software giant SAP
overhauled its U.S. operations and named Leo Apotheker to
lead them. He will also take over SAP’s global sales force.

Apotheker, who formerly led SAP’s operations in Europe, the Middle East and
Africa, was named to the newly created position of president of global field
operations. He has been with SAP for 14 years, including the launch of SAP
France.

In addition, SAP split the Americas market in two, with Apotheker to serve
as acting head of SAP’s North American operations. The current CEO and
president of SAP America, Wolfgang Kemma, will move over to the executive
vice president of global strategic initiatives. In that position, he will
concentrate on SAP’s customer-relationship management (CRM) and supply-chain
management software.

“SAP has the technology, products, and people to win worldwide, and now we
are creating an unbeatable global go-to-market team,” Apotheker said in a
statement. “SAP’s customer-driven culture is exemplified by this
organization, and I am personally looking forward to guaranteeing all
customers, regardless of where they are in the world, optimized solutions
and a consistent level of service.”

Apotheker named shuffled several deputies. Les Hayman, who headed the Asia
division, will move over to Europe. Hans-Peter Klaey will replace Hayman at
the Asia division. Also, Carol Burch, who headed SAP’s CRM sales, was named
senior vice president for global sales and operations.

As the world’s largest software market by far, the U.S. market is key to
SAP’s fortunes. However, it has lagged behind the company’s fortunes in
Europe. Last month, SAP reported a 12 percent decline in overall license
revenue, thanks to a 28 percent decline in the U.S.

“As the new year began, companies in the Americas approached new software
investments cautiously,” the company said at the time. But SAP banked on a
strong second half making up for the sluggish first six months. Wall Street
has not bought into the notion, though, with a raft of investment banks
downgrading SAP’s stock.

According to researcher Giga Information Group, the recovery in software
spending is coming, but it will arrive as more of a trickle than a flood.
“Our prediction is that there will be a steady upturn in IT spending for the
rest of 2002,” the researcher said in a forecast published yesterday. Giga
projects overall software spending in 2002 will increase just 2.4 percent.

The note of caution is shared by SAP’s rivals, like Oracle and PeopleSoft,
which are not banking on a swift recovery. Oracle CFO Jeff Henley, for one,
has said he does not see any signs that spending is about to pick up soon.

Meanwhile, SAP faces increased competition in the CRM market, as Microsoft
Great Plains readies the release of a CRM product later this year.

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