SAP makes surprise leadership change as CEO Mcdermott steps down

SAN FRANCISCO: SAP SE named executives Jennifer Morgan and Christian Klein as the successors to chief executive officer Bill Mcdermott, who’s stepping down after leading Europe’s largest software company during a decade of major industry changes.

The two SAP veterans will become co-ceos effective immediately, the company said on Thursday in a statement. Mcdermott, 58, will remain at the company in an advisory role through the end of the year.

Morgan, 48, who joined SAP in 2004, most recently served as president of the software giant’s cloud business group, She became the first American woman appointed to SAP’S executive board in 2017 when she was named president of the Americas and Asia. Klein, 39, joined SAP as a student in 1999 and has been chief operating officer since April 2016, and on the executive board since 2018.

Mcdermott’s departure was unexpected, but the new co-ceos were on investors’ “short-list” to take over in future, Citigroup analysts including Walter Pritchard said in a note.

“The decision was made based on my determination that 10 years is a long time to be CEO,” Mcdermott said on a conference call after the announcement. “You get to the point when you have done what you set out to do and then some.”

Mcdermott joined Walldorf, Germanybased SAP in 2002 and was the first American to hold the CEO position at the firm. He embraced cloud computing, changing the way SAP sold software so customers could use it over the internet. He’s been transitioning the company through acquisitions and revamped products, challenging rivals Salesforce.com Inc. and Oracle Corp.

While SAP had pledged to triple cloud revenue by 2023, the effort has shown mixed results and the company has pushed to shore up profit margins with the support of activist investor Elliott Management.