SAP CEO: We’ll double our focus on Israel
Bill McDermott explains that world’s third-largest software company wants to get back to the levels of investment in Israel that it had in the past
The fact that SAP CEO William (Bill) McDermott heads the world’s third largest software company does not make him in any way conventional or boring. He is a hi-tech rock star. From his poor Irish background on Long Island (he delivered newspapers at age 11), he derives insights that he is delighted to share at any opportunity. He is a guru of believing in yourself and achieving dreams. He hugs everyone he meets and writes a personal dedication in his book Winners Dream: A Journey from Corner Store to Corner Office (meaning the CEO’s office).
His unexpected appearance on the hi-tech scene is enhanced by the thick eyeglasses he constantly wears – the result of a terrible accident two years ago, when he went down the stairs of his brother’s home in the middle of the night carrying a glass of water and tripped. The glass penetrated his eye socket, and he lost his sight in one eye, and almost died. Shortly afterwards, he summarized the accident by saying, “I’m the luckiest person in the world.” He then declared that he had thereby discovered a business niche begging for attention – medical treatment systems – resulting in SAP entering this sector in full force.
Just as there is no minor key in McDermott’s scale, his management is dedicated and ambitious. He took the reins at SAP, which provides business management solutions (first as joint CEO, and then as sole CEO), in 2010, following the great 2008 financial crisis. He was also the first American CEO at SAP, whose headquarters are located in Germany. He has since made a series of acquisitions, and has developed SAP in cloud computing, data analysis and management, cellular, ecommerce, artificial intelligence, machine learning, Internet of Things, and on and on.
Two weeks ago, SAP announced Leonardo – a platform that integrates all of SAP’s innovation, is located in the cloud, and enables enterprises, startups, governments, and all the rest to use its elements. “If we play our cards right,” McDermott declares, “10 years from now, Leonardo’s part of SAP will be bigger than all of SAP today.”
On a short visit to Israel, he lectures to SAP Israel employees and meets with economic and government leaders. No fewer than 16 years after SAP made its most recent major acquisition in Israel (TopTier, founded by Reuven and Shai Agassi, for $440 million), McDermott said that he wanted to get back to the levels of investment in Israel the company had in the past. “And it will happen. We have a strong brand and a stable presence in Israel, but in investment terms - we’re coming. We’ll double our focus here, and you’ll see a lot more of me,” he said.
When reminded that SAP had not made a deal in Israel in a long time, McDermott answered, “you’re right. I think that the market here, relative to the population size, is almost certainly the most exciting technology market in the world. The proportion of engineers and scientists in Israel is higher than anywhere else in the world, and the per capita investment in R&D is higher than anywhere else in the world. We have to double our focus here, and we’ll do it.”
SAP’s most recent acquisition in Israel was enterprise software company OpTier for $10 million in 2014, but this followed a decade without any acquisitions at all, and only very small deals in the decade since the acquisition of TopTier for $440 million in 2001.
“The market share of SAP Israel,” says SAP Israel CEO Stavit Navon, “is over 90% of the 100 largest enterprises in Israel. Our customers include Teva Pharmaceutical Industries Ltd., Check Point Software Technologies Ltd. (Nasdaq: CHKP), Zim Integrated Shipping Services Ltd., and the entire government – about 100 offices – are on SAP’s platform, which allows a lot of transparency and modern processes. We’re doing a groundbreaking project in Israel now at the global level, which SAP, our parent company, is adopting.”
Navon has managed SAP Israel for five years. “It’s very fertile ground for startups to connect with us,” she says. “SAP gives them not only a technological platform, but also a business platform. This is something we have begun in the past two years, and there are already signs that Bill saw on his visit.”
One of these startups that she cites is Loginno, which makes it possible to monitor containers in marine transportation, and track them when they have been lost, misplaced, or improperly handled. The solution was developed on SAP’s system, and Loginno recently signed an agreement with Chinese company SITC, one of the 20 largest marine cargo companies in the world. There is also a development center in Israel that is part of SAP’s global R&D, managed by Orna Kleinman.