Via Financial Times

The chief executive of SAP, Bill McDermott, is stepping down with immediate effect from Europe’s largest software company after almost a decade in the role, having more than tripled the company’s market value and navigated its transition to cloud computing.

Executive board members Jennifer Morgan, who oversaw the company’s burgeoning cloud business, and Christian Klein, a former chief operating officer, will take over as co-chief executives, having been identified as successors about a year ago, the company said.

The announcement came as the company pre-released its third-quarter results, reporting strong growth in its cloud business, which it said expanded by 37 per cent in the third quarter of the year. The company also reiterated its 2019 guidance.

Mr Klein, who joined SAP as a student, said being given the top job was the “highest honour” he could imagine.

Mr McDermott, who first joined SAP’s North America division in 2002, said his departure was a “personal decision” and part of “preparing for the future of SAP”. “Every CEO dreams of being able to transition a company to its next generation from a position of significant strength,” he added. He was co-chief executive from 2010-14, before taking on the chief’s role in his sole capacity.

Founded in 1972, SAP rose to become Germany’s most valuable company by market value, employing nearly 100,000 people worldwide. It boasts almost half a million enterprise customers, but faces stiff competition from the likes of Salesforce, Oracle and Workday.

Under Mr McDermott’s leadership, SAP made several cloud-based acquisitions, most notably buying rival Qualtrics for $8bn in cash last November, just before it was due to go public.

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It recently attracted the attention of activist investors Elliott, who took a €1.2bn stake in the Walldorf-based group earlier this year. But unlike many of the hedge-fund’s targets, Mr McDermott enjoyed a relatively cordial relationship with the American firm, and said he had “benefited greatly from my relationship with the investment community”.

In July, SAP blamed disappointing second-quarter profits on US-China trade tensions, saying events had dented software sales in Asia as companies delayed spending decisions.

On a late night call with journalists, Mr McDermott said the company’s encouraging third-quarter results showed it was “an all-weather performer”, and added that the enterprise-software giant was sometimes a beneficiary of political upheaval.

“Whether you are augmenting supply chains, or moving your workforce, you are going to need SAP to handle that business process,” he said.

Mr McDermott also dismissed suggestions that appointment of Mr Klein and Ms Morgan, who will be based in Germany and the US respectively, would lead to the Frankfurt-listed company being rooted in North America.

The arrangement was merely the continuation of a “tradition” at SAP, he said, whose initial founders were co-chief executives.

SAP’s full third-quarter numbers are due on October 21.