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Hasso Plattner exits, marking end of era for SAP

The departure of Hasso Plattner signals both an end and a new beginning for SAP as the company aims to push forward on its cloud strategy and make a name for itself in AI.

Hasso Plattner departed SAP earlier this month, signaling the end of an era for the enterprise tech company and prompting reflections on his legacy as an SAP leadership icon.

On May 15, Plattner stepped down from the SAP Supervisory Board after serving the past 21 years as its chair. The 80-year-old has been involved in all of SAP's 52 years, including a stretch as CEO after co-founding the company in 1972 with Dietmar Hopp and three other former IBM colleagues.

Plattner, who was co-CEO from 1998 to 2003, was at the helm of SAP as it underwent major product transitions, from the core ERP system SAP R/3 to SAP ERP Central Component to the next-generation S/4HANA. The latter was built on the HANA in-memory database, the development of which was Plattner's pet project. During this time, SAP also pivoted to the cloud, while the majority of SAP's large customer base still runs on-premises systems.

The company's cloud profile was boosted by the acquisitions of several enterprise SaaS applications, including Ariba for business networking, SuccessFactors for HR, Fieldglass for vendor management and Concur for expense management, as well as the internal development of S/4HANA Cloud. SAP has also expanded its product portfolio with offerings such as the SAP Business Technology Platform for development and integration, SAP Datasphere for enterprise data management, and in the last year, a host of AI and generative AI capabilities, highlighted by the Joule AI assistant.

At another crucial crossroads in its history, SAP must now deal with technology and business challenges such as the continuing question of cloud migrations and the rapid growth of AI without input from its iconic former leader. Enterprise industry observers believe that Plattner leaves a complicated but undeniably significant impact on the industry.

Hasso Plattner at Sapphire Now in 2019.
SAP co-founder Hasso Plattner speaks at the SAP Sapphire Now conference in 2019.

A guide through early industry changes

From the perspective of German entrepreneurs, Plattner, who got his start at IBM in 1968, is a giant figure, said Jon Reed, co-founder of Diginomica, an enterprise industry analysis firm.

"The origins of SAP are pretty interesting, and how it spun out of something that a handful of ex-IBMers put together," he said. "One of the remarkable things was that Plattner and his co-founders built the product alongside customers."

Plattner's leadership subsequently brought SAP through a couple of major movements in enterprise computing, such as the mainframe transition and the move to client-server computing, Reed said. SAP's ERP became a global product in a way that very few products have, even the SaaS applications that were developed.

"He's someone that will ultimately be well regarded in the history of enterprise software," Reed said.

The impact that Plattner had on the enterprise computing industry should not be underestimated, particularly coming from a market that was not known for computing significance, agreed Joshua Greenbaum, principal at Enterprise Applications Consulting.

"What he did as an entrepreneur in Germany was groundbreaking in terms of making it at all and leaving stable employment with IBM to do it," Greenbaum said. "But also building virtually the only major German -- or even European -- software company in the global market today."

It's remarkable how SAP has evolved with so many architectural changes, vertical evolution and global shifts.
Vinnie MirchandaniAnalyst and founder, Deal Architect

SAP became the most significant company to emerge out of postwar Germany, he noted, as all other major German-based companies in existence today were founded before World War II.

The most important legacy Plattner leaves is SAP's ability to change with the times, said analyst Vinnie Mirchandani, founder of Deal Architect, an enterprise industry blog.

"It's remarkable how SAP has evolved with so many architectural changes, vertical evolution and global shifts," Mirchandani said.

Knack for finding, nurturing leadership

Greenbaum said it's also worth noting the culture Plattner was largely responsible for instituting at SAP and the leadership he was able to attract and nurture.

"There's a lot to be said for the kinds of people that he was able to attract and their ability to project an image of a technology company very different than the typical American 'greed is good,' 'revenue and profit at all costs' kind of company," he said. "Although that has shifted to a certain extent as SAP has become more focused on Wall Street and the investors."

Under Plattner, SAP was at the forefront of issues such as sustainability years before other enterprise companies, Greenbaum noted.

"Europe, in general, was much earlier to the table on those issues than North American companies were," he said. "But it was always refreshing to see how SAP had to navigate a much different labor market and labor relationship with its unions in Germany than most tech companies in the U.S. have ever had to manage."

Strategic missteps

But industry observers also find Plattner's legacy to be layered, including some significant missteps.

SAP has evolved its core ERP technology from mainframe to client-server to the cloud, but there have been longstanding charges that SAP was late in developing its software for the internet and SaaS. This opened the door for competitors such as Oracle and Salesforce to grab market share and functional scope in areas like cloud ERP software and SaaS CRM.

The development of HANA was Plattner's greatest strategic and technical error, "hands down," said Holger Mueller, vice president and principal analyst at Constellation Research.

"It was a great rally point, but took too much time, money and talent," Mueller said. "For example, if SAP had run only on Oracle database [rather than moving to the HANA database], it would be ahead by three to four years with S/4HANA, in my view. And SAP's developers have not been able to make ERP better with in-memory."

Timeline of SAP milestones in the last 50 years.
Some of the highlights from 50 years of Hasso Plattner's leadership of SAP.

However, some areas that were labeled missteps such as SAP's approach to the internet and cloud look different years later, according to Greenbaum.

"Looking back in hindsight, it's interesting to see how little that really mattered in the long run," he said. "And that SAP's embrace of the cloud, in particular through its strategic cloud acquisitions, put it in a pretty decent position today in the cloud, despite its enormous legacy on-premises base."

Some cloud application decisions can be legitimately questioned, Reed said. Plattner was at the cutting edge of the first few waves of enterprise software technologies, but misfired on the development of cloud CRM, even as SAP built a decent CRM product of its own that has outlasted other on-premises CRM products.

"The significance of Salesforce was, it was built as a SaaS cloud product," Reed said. "If you are going to second-guess it, you would ask if it would have been better for SAP to focus on building cloud applications instead of building an in-memory database, which complicated things for SAP and distracted it from a cloud focus."

SAP will move on

While there's little question that Plattner's exit from SAP signals the end of an era for the company, it will have a limited effect on the company's strategic direction going forward.

According to Mueller, SAP leadership will now face the prospect of formulating new processes without feeling the need to ask, "What will Hasso say?"

"It's the first time that SAP will be managed without any owner present, so it will be new," Mueller said. "Good things will happen and bad things will happen, but it is a progression that SAP will need and will make it last beyond the life span of the founders."

SAP's leadership without Plattner will be tasked with navigating complex technology changes such as AI, but this has been the case for a few years, Reed said, as no one has associated SAP leadership with one person for some time.

"The leadership is good overall, and they have their hands full," he said. "SAP will be around for a long time. It's a question of if they will ever be perceived as being in the cutting edge of enterprise software technology again, but they'll be a factor for years to come."

Indeed, Plattner's direct and visible impact on SAP has been limited for a number of years, as SAP has continued to grow and change, Greenbaum said.

"The company has become big enough that it's not just self-governing, but is truly moving of its own volition, independent of someone like Plattner being at the top of the hill," he said.

Jim O'Donnell is a senior news writer for TechTarget Editorial who covers ERP and other enterprise applications.

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