For the second time in SAP history, CEO Bill McDermott and CFO Luka Mucic have to pull the rope on the golden parachute. Golden parachute is a nickname for a program designed to make employees retire earlier to achieve cost savings.
McDermott’s “Cloud First” strategy and the numerous rash and expensive acquisitions (do I even have to say Qualtrics at this point?) have brought SAP to its knees. More than 4000 employees are to leave the company. The most recent figures predict tumultuous times.
Did Bill McDermott wreck Hasso Plattner’s life’s work?
Fact is that McDermott’s cloud strategy has cost the company a lot of money. If hyper scalers reduce their cloud prices and expand their service portfolio even more, there won’t be any room left for SAP.
Who will buy Rimini Street and Suse Linux to provide seamless SAP service for server, storage, database, and applications including maintenance and support? AWS, Google, Microsoft, Telecom, Alibaba, IBM, Huawei… the list of possible buyers is endless, but SAP is nowhere to be seen.
With Qualtrics, cloud, interoperability (or, as SAP dubs it, Indirect Access), Hana and all the (mostly still not finished or refined) products like S/4, BW/4, and C/4, SAP’s future remains uncertain.
The sensible thing to do would be to take a step back and reconsider current strategies. But Bill McDermott and Luka Mucic are apparently not the sensible kind. They rather let their employees pay for their mistakes. This means a long overdue reorganization and, as already mentioned, the almost infamous golden parachute.
However, Bill McDermott is not done yet. To show how strong and powerful SAP still is under his leadership, he wants to continue investing in technology. Machine learning, IoT, artificial intelligence, blockchain and, of course, quantum computing… it’s not like the SAP community has any other problems to solve, right?