Everyone we’ve talked to seems genuinely shocked by the departure of one of SAP’s brightest stars, Vishal Sikka, the company’s executive board member for products and innovation.
Why did he leave? Two things were going on, sources tell us:
- He was hoping for a big promotion akin to a co-CEO role and that didn’t happen.
- SAP is a German company and there’s an internal struggle at SAP between the growing power of its American executives, of which Sikka was a prominent member, and its German contingent.
SAP declined comment.
The situation happened quickly, probably within the past couple of days. Otherwise, Sikka would have resigned after the company’s major annual customer conference, dubbed “Sapphire,” which happens next month in Orlando, a source tells us.
Sikka is described as “a very nice man,” as well as a brilliant engineer, mathematician and visionary, by those who knew him. There was no beef with soon-to-be sole CEO Bill McDermott. They got along well. However, there was some friction between him and McDermott’s co-CEO, Jim Hagemann Snabe, sources told us.
The most powerful person in the company is, and continues to be, founder Hasso Plattner. Plattner liked and backed Sikka. With that backing Sikka’s power grew within the company. Sikka is based in Palo Alto, Calif., and helped pull more tech development to the American side of the company.
Plattner pressured the board to move faster, be more innovative, implement changes quicker. In February, when SAP opened an innovation center in Germany, Plattner said publicly he wanted to change SAP’s slow image. “We are not out-of-the-box jumpers,” he said. A source told us, “Vishal was positioned — forcefully — as Hasso [Plattner]’s weapon against the old-school SAP.”
But European board members, customers, and big investors were concerned about how American SAP was becoming, especially after McDermott, another American, becomes CEO, sources told us.
SAP is a company managed by committee, with power resting more heavily with its leadership boards than with its CEO, sources say. SAP sources told us that Sikka had hopes of becoming co-CEO with McDermott when Snabe left, or some other elevated position. But the board had already decided this wasn’t going to happen. McDermott will become sole CEO on May 21, at the annual shareholder’s meeting. Snabe will stay on as a member of the supervisory board.
The question then became: would Sikka be happy with his role under McDermott, as McDermott put his own team in place? Even though McDermott liked him, he couldn’t elevate him following the board’s decision to go with a sole CEO.
German magazine DAS E-3 recently published a critical article about SAP, Sikka, and the internal German-American struggle. Last week, after the article was published, Sikka wrote a personal blog post, not sanctioned by SAP, that slammed the E3 article and its writer. He called the story “the fabrications of a gossip-monger,” and praised Plattner as his inspiration.
Now, McDermott is clearly trying to build bridges with the Germans. When Sikka resigned, McDermott promoted a longtime German SAP executive Bernd Leukert to the top executive leadership board, in Sikka’s place.
There’s no doubt that Sikka will land on his feet. He’s well-respected among the Valley elite. If this move signifies a new vision for SAP, no doubt CEO Bill McDermott will talk more about it in June.
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