Global CIO: Are HP And SAP Perfect Match Or Train Wreck?
Unless HP intends to become a software powerhouse, its hiring of ex-SAP CEO Apotheker makes zero sense. So where's the benefit for SAP?
Did the HP board really bring on Leo Apotheker and his nontrivial baggage just to manage and perhaps expand HP's relationship with SAP? Is that all there is? Even if HP had hired Barney Fife as CEO instead of Apotheker, SAP would almost certainly have wanted to extend its relationship with HP, particularly in the face or Oracle's increasing presence in hardware and IBM's increasing presence in software.
8) Or is it possible that HP's board and its new CEO think SAP will just sit by, starry-eyed and perpetually loyal, as Apotheker and HP begin muscling their way into some of SAP's primary markets through acquisitions such as Teradata and Informatica and Salesforce.com and others?
9) And in another conjecture that strains the limits of credibility, is it possible that HP's board doesn't realize that SAP is a profoundly different company—in every conceivable way—than it was 8 months ago when it fired Apotheker? And that SAP's new development methods (less central control), its new product strategies (mobility, rapid time to value, lighter-weight offerings), its new value propositions (real-time business, value engineering, and seamless integration across on-premise, on-demand, and on-device), and its new management philosophies (primarily new respect for customers) are all in large part repudiations of Apotheker and his legacy?
10) Because, it seems to me, that all of this leads us directly to the only reasonable consideration, and that is that HP wants to acquire SAP. With SAP's current market cap of about $61 billion, and with a premium of another, say, $20 billion, it's conceivable that HP could afford such a purchase. But the questions such a scenario raise are daunting:
If that's HP's play, why bring in as CEO and ringmaster the guy with the proven track record of failure at SAP?
SAP's reestablished some momentum in the marketplace and is finally growing again—is this really the time to cash in?
Even if SAP were to accept such a deal, it would immediately transform Oracle from a somewhat uneasy partner into a full-blown and relentless competitor.
It would at least complicate some of the areas of long-time partnership between SAP and IBM by virtue of HP's widespread head-to-head competition with IBM.
It would totally undercut SAP's anti-Oracle positioning, whereby SAP reassures customers that it won't ever pursue the lock-in approach that SAP says is behind all of Oracle's moves.
And it would put Apotheker in charge of a sprawling and wildly complex global colossus when his own history shows no reason whatsoever to believe he's up to the challenge.
So I just don't get it. I keep thinking of the old story about the chicken and the pig who decide to join together in opening a diner but, not long into the partnership, the rapidly shrinking pig realizes that the benefits and costs of the partnership are not equitably distributed.
That's a tale that both HP and SAP should be thinking about very closely. Because there's much more going on here than meets the eye.
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