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SAP chief executive Bill McDermott steps down

Bill McDermott has stepped down as chief executive of SAP following a 17-year stint at the enterprise software giant.

The industry veteran, who chose not to renew his contract, has been succeeded by Jennifer Morgan and Christian Klein as co-chief executives, with immediate effect.

McDermott started at SAP in 2002 as the head of its North American division, before being promoted to co-CEO in 2008 and CEO six years later. During his time at the helm, McDermott has overseen the company’s shift to cloud computing and a number of high-profile acquisitions, including the $8bn purchase of the experience management software specialist Qualtrix in January.

Earlier this year, SAP revealed a €950 restructure aimed at accelerating customers’ uptake of cloud subscriptions. On Thursday (10 October), it reported that total revenue was up 13 per cent in the third quarter, driven by a 38 per cent increase in new cloud bookings. Software licenses were down 1 per cent while operating profit rose by 36 per cent to €1.68bn.

In a statement McDermott said: “When you look at where we were and where we are, I simply could not be prouder of what this company has achieved over the past decade. I am thankful for the opportunity to lead one of the world’s finest companies. Now is the moment for everyone to begin an exciting new chapter, and I am confident that Jennifer and Christian will do an outstanding job.”

Before stepping up, Jennifer Morgan served as president of SAP’s cloud business group, while Christian Klein was chief operating officer, having joined the company as a student 20 years ago. They were both existing members of the executive board.

Morgan said: “I could not be more grateful to […] the Supervisory Board for placing their trust in me and Christian to lead this next chapter for SAP. We accept the challenge with a high degree of humility, but also with a sincere belief that the best is yet to come for SAP. […] Bill McDermott has been not only a tremendous leader, but a mentor and a role model for so many of us.”

Klein added: “As someone who began my career in the halls of SAP, this is the highest honour I can imagine to become co-CEO together with Jennifer.”

Reflecting on the news, Liz Herbert, principal analyst at Forrester, said McDermott’s departure would “come as a disappointment for many customers, particularly those who found his passion and enthusiasm and ambitious vision to be so refreshing”. She added: “One immediate risk to customers of this major change is whether other key leaders close to Bill – notably Ryan Smith of Qualtrics and Alex Atzberger the head of C/4 HANA – will follow suit and erode some of the focus on CX and CRM.”

McDermott will continue to advise the company until the year’s end.