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SAP's Vishal Sikka Resigns; Leaves Company at a Crossroads
SAP faces a choice between building a platform or keeping up with the cloud race.
Posted May 5, 2014
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Following a supervisory board meeting Sunday, SAP announced the resignation of Executive Board Member Vishal Sikka. With Sikka's resignation effective immediately, the supervisory board named Robert Enslin and Bernd Leukert to the company's executive board "to advance the technology industry's most successful transition to the cloud," according to a company statement. Though the company says Sikka has stepped down due to "personal reasons," analysts agree that his decision could represent a major organizational shift for SAP.

Once called "the innovator of our generation" by SAP co-CEO Bill McDermott, Sikka spent roughly 12 years at the company, overseeing four major acquisitions (Business Objects, Sybase, SuccessFactors, and Ariba), driving massive updates to the SAP Business Suite, and championing the development of SAP's next-generation database, HANA. With growing pressure from customers and competitors to focus on applications and cloud-based solutions, however, the company was ripe for an executive shakeup, according to Ray Wang, cofounder and analyst at Constellation Research.

"The company has been trying to make decisions as to whether they're going to emphasize apps versus platforms, which is what [Sikka] wanted to do. They also have to choose between execution versus innovation, which [Sikka] was known for, and if they'd rather buy software versus build software," Wang says.

Recent acquisitions in the marketing space, for example, have left SAP with a hole in its suite of offerings. "Think about all the marketing companies that have been bought up: Unica, ExactTarget, Silverpop, Neolane...what's SAP got? You take an area like CRM in the marketing sense, and you have to ask: Do we buy or do we build?" Wang says. It's those kinds of questions that the company faces, he explains.

The pressure from customers that have been eager for more app-based solutions is mounting as well, and analysts predict that a redirection will be a welcome change on the customer front. "SAP product development will become more application- and less technology-centric, which is good news for SAP customers," Holger Mueller, analyst at Constellation Research, says. SAP is at a logical point where enough has done enough to run SAP apps on HANA, Mueller explains, but now the question becomes where the company will direct its investment. "SAP is well funded to invest both in applications and technology, but an overall higher focus on applications will benefit customers more," he says.

Sikka's resignation came as a shock to the SAP community and the software technology community as a whole. "There has been an emotional outpouring—shock, sadness, and grief," John Appleby, HANA practice lead at Bluefin Solutions, wrote in a blog post on SAP's 

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