SAP CEO: SaaS Hurts Our Profits

The company has readied version 2.0 of Business ByDesign, but a broad-market push is too costly for SAP, incoming chief executive Leo Apotheker said.
Apotheker's dry, occasionally derisive sense of humor provides insight into his personality and leadership style. There was his observation that perhaps there is a "masochistic streak of wanting to be in a recession" since people "can't stop talking about it."

Yet Apotheker's dead serious when talking about what SAP perceives as a liquidity problem for some customers, due to the financial market crisis, which affects their ability to buy software. The situation of declining software license sales hasn't "gotten any worse" since company executives talked about it in October, and while SAP isn't planning any fire sales, "We have a vested interest in making sure customers come out alive, and we will work with them as much as we can, but have to also protect our own interest," Apotheker said.

Apotheker said he's looking forward to the work of John Wookey, a former Oracle executive who was recently appointed to direct SAP's SaaS strategy for large companies; he called Wookey one of the "greatest software developers to walk on the face of Earth." SAP plans to develop software services for large companies that are primarily add-ons to licensed software, but may be cheaper or easier for customers to run in the cloud.

In other product road map news, Apotheker said SAP is planning to introduce a new database-related product in 2009 that will feature in-memory technology. "We have a strong belief in the in-memory database [as it] can store infinite amounts of real-time data," he said. Apotheker said customers would use the new product for business analytics and indicated SAP will release it in coordination with its considerable Business Objects division.