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SAP Chiefs: Change Underway

Co-CEOs Bill McDermott and Jim Hagemann Snabe promise a significant advance in on-demand applications this year.

SAP AG put on display at its lab in Palo Alto, Calif., Monday to show the results of its reorganization in early February. Bill McDermott and Jim Hagemann Snabe, the co-CEOs replacing former CEO Leo Apotheker Feb. 7, outlined SAP's future path.

Snabe had just flown in from Frankfurt and appeared to be the target of a quip that the pair was so exicted about the task front of them that they hadn't been able to sleep.

The duo, sitting on raised chairs in front about 24 analysts and members of the press, quickly got down to business: the new SAP is about producing on-demand as well as on-premises applications; it is about adding intelligence to those applications through analytics; and it is about orchestrating the use of business software for better business processes and more efficiently running enterprises.

"We have almost 50,000 people fired up and ready to go, and so are we We haven't stopped. We haven't slept," said Snabe.

Before they'd gone too far, the pair displayed a spirit of teamwork, with McDermott handing off a microphone to Snabe so he could talk first, and Snabe handing it off to an aide because both he and McDermott were already wired with mikes.

Then McDermott testified to the friendship and partnership he and Snabe have built over eight years of working together. They got acquainted, he noted, while serving on the SAP Executive Committee.

"There will be a significant advance in on-demand applications this year," said Snabe. SAP orients its on-demand applications toward small and medium business (SMBs) and offers applications in CRM, financials, HR, procurement, supply chain and project management.

But some large customers may choose the online applications as well, and the two will be integrated further to better work together. "We believe in the hybrid approach, both on-premises and on-demand," Snabe said.

When asked during a question and answer session how SAP would respond to Oracle's rate of acquisition, McDermott said there are better ways to grow a company than acquisition. SAP will acquire companies only when it makes compelling strategic sense to do so, he added. SAP wanted to provide broader access to application analytics, and its Business Objects acquisition is helping provide it.

"I wouldn't hesitate to do an acquisition if it was strategic. We wouldn't shy away from it," he added.

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