SAP’s co-CEO structure is over

After US stock markets closed on Monday, SAP (NYSE: SAP) announced, via press release, that it was parting ways with co-CEO Jennifer Morgan and giving the leadership role solely to her counterpart Christian Klein. The company announces its earnings later today.

The news came as a big surprise to the enterprise software vendor’s customer, investor and analyst communities who had been bullish on the two executives. They were charged with reenergizing the 48-year-old firm and helping its more than 12 million worldwide users at over 41,200 customer sites realize the promise of digital transformation. As of today, Klein will have to do that without Morgan, who has been at SAP for 16 years.

Without taking anything away from Klein or judging the wisdom of SAP’s decision, “It’s a sad day, as the tenure of the first woman at the helm of a DAX company, was only a little over six months,” says Holger Mueller, vice president and principal analyst at Constellation Research. “Morgan is extremely capable of handling the responsibilities,” says Josh Greenbaum, industry analyst and principal analyst at Enterprise Applications Consulting.

Perhaps, at any other time, there would have been time to wait and see how things worked out. But with the oil industry tanking and the coronavirus crisis hurting industries like fashion, retail, tourism and travel, all of whom (among many others) SAP caters to, SAP chooses to put its future solely in the hands of Klein, according to Greenbaum.

“More than ever, the current environment requires companies to take swift, determined action which is best supported by a very clear leadership structure. Therefore, the decision to transfer from co-CEO to sole CEO model was taken earlier than planned to ensure strong, unambiguous steering in times of an unprecedented crisis,” SAP explained in a statement.

Thc conclusion makes sense, according to Greenbaum. “SAP is about to face some very serious headwinds , they need a very cohesive strategy,” he says, noting that Klein, SAP, and its supervisory board are all based in Germany.

Mueller notes that SAP’s approach, at this point, is pretty straightforward and more suited to Klein. “They need to get S/4HANA in an attractive enough shape for the install base and the market. Move the “6…