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SAP Shakes Up U.S. Operations

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Posted May 23, 2002 By Brian Morrissey     Feedback

Leo Apotheker will head global sales and SAP's U.S. operations, as the company looks to a brighter second half of the year.

Facing stagnant growth in U.S. corporate spending, German software giant SAP overhauled its U.S. operations and named Leo Apotheker to lead them. He will also take over SAP's global sales force.

Apotheker, who formerly led SAP's operations in Europe, the Middle East and Africa, was named to the newly created position of president of global field operations. He has been with SAP for 14 years, including the launch of SAP France.

In addition, SAP split the Americas market in two, with Apotheker to serve as acting head of SAP's North American operations. The current CEO and president of SAP America, Wolfgang Kemma, will move over to the executive vice president of global strategic initiatives. In that position, he will concentrate on SAP's customer-relationship management (CRM) and supply-chain management software.

"SAP has the technology, products, and people to win worldwide, and now we are creating an unbeatable global go-to-market team," Apotheker said in a statement. "SAP's customer-driven culture is exemplified by this organization, and I am personally looking forward to guaranteeing all customers, regardless of where they are in the world, optimized solutions and a consistent level of service."

Apotheker named shuffled several deputies. Les Hayman, who headed the Asia division, will move over to Europe. Hans-Peter Klaey will replace Hayman at the Asia division. Also, Carol Burch, who headed SAP's CRM sales, was named senior vice president for global sales and operations.

As the world's largest software market by far, the U.S. market is key to SAP's fortunes. However, it has lagged behind the company's fortunes in Europe. Last month, SAP reported a 12 percent decline in overall license revenue, thanks to a 28 percent decline in the U.S.

"As the new year began, companies in the Americas approached new software investments cautiously," the company said at the time. But SAP banked on a strong second half making up for the sluggish first six months. Wall Street has not bought into the notion, though, with a raft of investment banks downgrading SAP's stock.

According to researcher Giga Information Group, the recovery in software spending is coming, but it will arrive as more of a trickle than a flood. "Our prediction is that there will be a steady upturn in IT spending for the rest of 2002," the researcher said in a forecast published yesterday. Giga projects overall software spending in 2002 will increase just 2.4 percent.

The note of caution is shared by SAP's rivals, like Oracle and PeopleSoft, which are not banking on a swift recovery. Oracle CFO Jeff Henley, for one, has said he does not see any signs that spending is about to pick up soon.

Meanwhile, SAP faces increased competition in the CRM market, as Microsoft Great Plains readies the release of a CRM product later this year.

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