Sap Christian Klein [shutterstock: 438218599, fran_kie]
[shutterstock: 438218599, fran_kie]
Blog Last and Least

SAP: The Good (And Bad) Old Days

For a long time, SAP’s quarterly figures and its stock price only knew one maxim: growth. CEO Christian Klein sees everything in a more differentiated way.

SAP’s history can be divided into four main eras: the era of the founders (with Dietmar Hopp, Hasso Plattner, Claus Wellenreuther, Klaus Tschira, and Hans-Werner Hector), the era directly after (with Professor Henning Kagermann), the revenue and sales era (with Léo Apotheker, Jim Hagemann Snabe, and Bill McDermott), and the era we’re experiencing now (with CEO SAP Christian Klein). I like to call it the consolidation era.

None of these eras can be singled out as the worst one. Every era was a product of its time and unique prevailing challenges. In retrospect, some cloud acquisitions should have been done differently, but it is always easier to evaluate past events with the wisdom of hindsight, right? What’s really important is today and tomorrow.

The relatively young SAP CEO Christian Klein is a product of his time as well, and his enthusiasm and drive for change are almost palpable every time he speaks about the company he inherited. And yet, SAP’s stock price took a massive hit back in late October/early November of 2020 and didn’t recover for a long time afterwards.

What went wrong?

Because of their confidence and previous experience, both Léo Apotheker and Bill McDermott were not only brilliant salesmen, but also the darlings of financial analysts. Both always tried to milk the SAP community for all it’s worth, resulting in increasing SAP dividends and stock price. Sounds great in theory, but there was one group who kept losing with this approach: the customers.

SAP customers grew more and more irritated, but there wasn’t much they could do. An ERP system is a long-term investment and changing providers can prove almost impossible. But then, SAP itself gave them the tools that they needed: For the first time in SAP’s history, there is now a legitimate business case for switching ERP system providers instead of implementing the release change to S/4 Hana. Upgrading to S/4 Hana costs about the same as switching providers, so why not try out a different ERP system with lower licensing and support costs?

SAP was at risk of losing a lot of customers until 2025. The consequences of trying to avoid this are well-known: extended maintenance for Business Suite 7 until 2027/2030 and a new CEO.

Looking at SAP’s stock price and how it went tumbling down after the announcement of its Q3 figures in October 2020, one could be tempted to agree that the good old days at SAP are over. However, it was neither Christian Klein’s nor CFO Luka Mucic’s fault that the stock price fell so steeply. Many investors and analysts just didn’t listen properly.

Of course, Mucic and Klein had to be the bearers of bad news as they announced the Q3 figures, but neither of them said anything that day that Christian Klein hadn’t said before. He always reiterates that he is listening to customers, that SAP will go back to its roots – specifically meaning the era of the founders and the one right after, as outlined above. This paradigm change costs and will continue to cost money. Seems logical, right? Maybe investors and analysts wouldn’t have panicked as much about the Q3 figures if they would have been able to come to the same conclusion on their own.

E-3 Magazine December 2020/January 2021 (German)

About the author

Peter M. Färbinger, Editor-in-Chief

Peter M. Färbinger is Editor-in-Chief and Publisher at E-3 Magazine, AG, Munich, Germany. He can be reached at

1 Comment

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  • Very good points, but the biggest obstacle to replacing SAP is all of the people at an organization whose careers and income depend on SAP. Who is going to vote to replace SAP if it effectively eliminates or minimizes their career and income potential? SAP will be replaced at a few organizations, but I believe it will be very rare.

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