SAP Ex-Chief Leo Apotheker Plans Software, Telecommunications Buyout Fund
Former SAP AG head Leo Apotheker is creating a private equity fund to invest in European software, telecommunications and information-technology companies.
“My projects are to try to help European technology companies become global players,” Apotheker said in a July 2 interview in Aix-en-Provence, France. “We build great technology in Europe; we just don’t know how to bring it to market and we are unable to really create large companies.”
Apotheker and two “well-known” European partners from the services and telecommunications industries whom he declined to name are talking to investors and companies “who need different shareholders,” he said. He said he hopes the fund, which will raise money for each investment, will start operating in September or October.
Apotheker, 56, resigned as SAP’s chief executive officer in February amid customer and employee discontent, and a failure to boost revenue at the world’s largest business-management software maker in 2009, as clients put off investing in new software during the economic slump. SAP’s supervisory board decided not to extend Apotheker’s contract, which would have expired at the end of the year.
He predicted the global economy will slow down this year, affecting demand for business software, which went through a “disastrous year” in 2009. It will take “a couple of years” for the industry to match pre-crisis results, and 2010 compared with 2008 will “not a very pretty picture,” he said.
Apotheker said he wished SAP “would have been quicker” in attacking the Internet-based software and mobile-computing markets when it identified those growth areas three or four years ago. More companies will move their applications to cloud- based software systems as they shift expenses from capital to operational spending, he said.
Cloud systems may become safer than on-premise systems because “you might be able to focus more attention on what sits on the cloud and make it more secure,” said the 56-year-old Apotheker, vice chairman of Schneider Electric SA’s supervisory board since April. Cloud computing allows companies to store and have access to data on external servers.
“The architecture of the future will be a continuum of mutualized clouds, private clouds that companies will organize, and classical on-premise systems.”
Cloud computing creates “a great opportunity for newcomers,” as shown by the success of Salesforce.com Inc., he said.
“I’m not sure that incumbents are agile enough” in the software business, the former SAP chief said. “When you’re the incumbent, you are fettered by your environment; the market forces, the shareholders, the financial markets are such that it’s hard to be very disruptive on yourself.”