SAP Loses 'Cloud DNA' As Lars Dalgaard Steps Down

SAP announced Friday that Lars Dalgaard, head of its cloud operations, is parting ways with the company, stepping down from the executive board and leaving effective June 1 "to become an investor."

When SAP acquired SuccessFactors in 2012 for $3.4 billion, it asked Lars Dalgaard, that company's founder and CEO, to join the company's executive board. It was vote of confidence that Dalgaard would bring what SAP co-CEO Bill McDermott described as "the cloud DNA and leadership [SAP] needed."

"Since the acquisition of SuccessFactors, an SAP company, Lars Dalgaard has brought his unsurpassed passion, leadership and execution excellence in the cloud business to SAP," said SAP in a statement. "He will continue to play an active role as an advisor to the SAP Cloud business and will stay closely involved in the future development of SAP's cloud strategy."

SAP stated that co-CEOs McDermott and Jim Hageman-Snabe, two executives who built their careers in the traditional, on-premises software business, will become the executive board sponsors for SAP's cloud business.

[ Want more on SAP's "cloud truth teller?" Read SAP's Ugly (ByDesign) Baby Gets Prettier. ]

Rumors of Dalgaard's departure circulated at SAP's Sapphire Conference earlier this month, but Snabe told InformationWeek the executive's absence from the event was tied to the recent death of Dalgaard's father. "Lars is very important for our cloud," Snabe said. "He's going through a phase in his life where he's prioritizing how he's spending his time, but we have a very strong team reporting to him ... and we're not losing momentum in that business."

One analyst speculating about Dalgaard's departure at Sapphire said it "wasn't a matter of if, but when." By many accounts, Dalgaard was a bit of a loose cannon for SAP, slamming SAP's earlier cloud efforts with SAP Business ByDesign and publicly displaying impatience with the pace of change.

Having pocketed many millions through the acquisition of SuccessFactors, Dalgaard is certainly in a position to become a serial entrepreneur guiding his own new company. It's likely any earn-out agreements Dalgaard might have signed to stay on with SAP for a specified period of time after the SuccessFactors acquisition have since expired. Dalgaard could not be reached in time for this story.

SAP also announced a series of personnel restructuring moves highlighted by the consolidation of all development activities under the direction of executive board member Vishal Sikka. SAP said the moves will enable SAP to "accelerate innovations powered by the SAP Hana platform" and "drive a cloud-first approach for the development of line-of-business applications."