SAP Cloud Chief Dalgaard Leaving as Part of Overhaul

SAP AG (SAP) said its cloud-computing chief and founder of SuccessFactors Inc., a software provider it bought last year, is leaving the company as part of a management overhaul.

Lars Dalgaard is stepping down effective June 1 to become an investor, the world’s largest maker of enterprise-management software said today in a statement. Danish-born Dalgaard, who had joined SAP’s executive board after the acquisition last year, will keep advising the Walldorf, Germany-based company.

Co-Chief Executive Officers Jim Hagemann Snabe and Bill McDermott are trying to stay ahead of Oracle (ORCL) Corp. while fending off Salesforce.com Inc. (CRM) as well as smaller Web-based rivals. Like Oracle and Salesforce.com, SAP is pushing online software to lower entrance barriers for clients and reduce the computing capacities companies need to maintain on their own premises.

“Dalgaard did a good job integrating SuccessFactors into SAP and it makes sense that the company is looking to take its cloud services to the next step,” said Heinz Steffen, an analyst at Fairesearch GmbH in Kronberg, Germany. “The positive thing is that Dalgaard is still an adviser.”

SAP shares fell 2.5 percent to 59.15 euros at 3:54 p.m. in Frankfurt, valuing SAP at 72.6 billion euros ($94 billion). The stock gained 28 percent in the past 12 months through yesterday.

Bob Calderoni, head of another company SAP bought last year, Ariba Inc., will now oversee the cloud-computing business.

Database Push

“There will be zero business disruption,” McDermott said on a conference call. While Dalgaard “is pursuing his ambition he will remain a key adviser and ever loyal to SAP.”

SAP also announced other management changes to sharpen its focus on the faster-growing parts of its business, including cloud-computing and database software. Vishal Sikka, an executive board member, will lead a development organization overseeing innovation throughout the company. Human-resources head Luisa Delgado is leaving to become CEO of another company.

To increase its push into new areas, SAP last year paid $4.3 billion for Ariba, which provides a platform for companies to trade products online via the so-called cloud, and $3.4 billion for SuccessFactors. SAP said this month it plans to offer even its largest programs via the Web, reducing the time and cost for deployment compared with software installed on customers’ own machines.

‘Great Story’

The company is also investing in database software. Hana, a database that the company says is the fastest-growing product it’s ever sold, cuts the time needed to analyze data and carry out transactions by orders of magnitude. Hana applications -- mostly developed with customers and startups -- range from weather simulations to predicting track conditions for Formula One racing teams to planning cancer treatments.

“SAP has a great story with Hana and its cloud offering so this move to adjust its management structure to concentrate on these products makes sense and will help them grow even faster in the coming years,” said Wolfgang Donie, an analyst at Norddeutsche Landesbank Girozentrale in Hanover.

This year, SAP’s net income is projected to reach 3.7 billion euros, double its level in 2010, while revenue is estimated to reach 17.7 billion euros, an increase of about 90 percent compared with 2006, data compiled by Bloomberg show. The software maker plans to boost sales to more than 20 billion euros in 2015.

To contact the reporter on this story: Cornelius Rahn in Berlin at crahn2@bloomberg.net

To contact the editor responsible for this story: Kenneth Wong at kwong11@bloomberg.net

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