Government // Enterprise Architecture
Commentary
4/28/2010
12:19 PM
Bob Evans
Bob Evans
Commentary
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Global CIO: SAP's McDermott Slaps Back At Oracle And Refocuses On Customers

Just 10 weeks after becoming co-CEO, SAP's Bill McDermott has re-energized the company by focusing intensely on delivering great customer value.

While SAP's strong quarterly results showed a return to growth across all industry sectors and geographies, the real driver behind the company's resurgence is the customer-centric outlook, confidence, and passion of recently named co-CEO Bill McDermott.

It is hard to imagine that this is the same company that just 10 weeks ago presented itself to the world in a funereal, apologetic, and rambling phone call with analysts and media presided over by founder and chairman Hasso Plattner. In that February call announcing the ouster of CEO Leo Apotheker and the appointment of co-CEOs McDermott and Jim Hagemann Snabe, SAP appeared to be a company struggling for an identity, scrambling for a position, and searching for a cogent strategy.

Yes, it still had its 97,000 global customers and its extraordinary penetration among most of the world's largest and most-successful companies, along with its extensive product line and financial muscle. But Plattner chose to portray the company as one that had lost the trust of its customers and employees by failing to innovate, failing to lead, and failing to deliver on promises.

I think the real problem was that SAP had forgotten that companies exist to delight their customers, and that enterprise-software companies in particular exist to cause that delight by helping those customers create great new products and services by stripping out waste, enhancing end-to-end visibility, seizing opportunities, and driving transformation.

But this morning, as SAP delivered its first set of quarterly results under new co-CEOs McDermott and Snabe, all of that changed. While Snabe appears to be doing a very strong job of creating a unified product strategy and reigniting the passion among SAP's developers by streamlining how they work and sharpening the focus of that work, McDermott infused the discussion with an intense commitment to customer issues and customer priorities that SAP seems to have lacked for some time.

Citing the return of "large, transformational deals" and highlighting that the size of first-quarter deals was up 36% over a year ago, McDermott conveyed in the earnings call and in a followup phone interview the unmistakable message that the new SAP is leaner in its development, stronger in its product line, and ready to fight aggressively for the hearts and minds of its customers.

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McDermott told my colleague Doug Henschen and me in that followup phone conversation that SAP had "70 significant competitive knockouts" in the first quarter, and that "of those, 24 were literal replacements of competitive installations." McDermott said those customers hadn't given permission for SAP to disclose their names. And while he didn't say that it was Oracle that had been knocked out those 24 times, the tone of his voice certainly made it clear that those two companies are competing intensely in key industries.

Here are a few other examples of McDermott's refreshing leadership:

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