SAP has announced that its recently appointed CEO Mr Apotheker is to step down.
This move has been described as a response to all sorts of ailments within the company. Issues written about in the press include: delays in launching software, a failure to grasp the nettle with software as a service, job cuts, high customer charges and …, the list goes on.
Our view is more simplistic. Whilst all the above might be true the real problem is that the company relies on a business model which now resides in the past. Large, expensive, comprehensive but complex systems that require lots of resources to build and operate are being replaced with smaller, much less expensive and much more flexible systems. SAP and others like it will have to learn to become much faster at releasing software, provide more options in how that software is delivered and become a great deal more flexible in the way customers are charged. SAP may well be able to rely on legacy customer contracts for some time, but eventually people will move.