German software giant SAP announced a pretty broad management shake-up across its cloud-oriented software units today. The big news, however, was that Lars Dalgaard, the CEO of the cloud-based human resources software company SuccessFactors, is leaving the company to become an investor.
You?ll remember that SAP paid $3.4 billion to acquire SuccessFactors in late 2011 (a deal that brought tears to the eyes of certain writers).
That kicked off a spate of HR-focused cloud acquisitions. Within two months, Oracle had paid $1.9 billion for Taleo, and Salesforce.com acquired Rypple and turned it into Work.com. This string of deals was taking place against the backdrop of Workday raising a lot of money from investors, on its way to going public in one of the more successful IPOs of 2012.
Since SuccessFactors was a cloud-born company and SAP is, let?s face it, an old-school on-premise software company working hard to transition to a more cloud-friendly way of doing things with its HANA line, it?s not hard to imagine some cultural friction.
That?s what analyst Karl Keirstead of BMO Capital Markets attributed Dalgaard?s departure to in a note to clients following the announcement. ?We believe that there were some conflicts between the cloud development efforts under Dalgaard and the HANA and on-premises development team under CTO Vishal Sikka. We?re not altogether surprised by the changes given the challenge of integrating fast-growing SuccessFactors with a more methodical SAP culture, but despite this, SAP has made solid progress in closing its cloud gaps over the past 12 months,? Keirstead wrote.
In a company statement and on Twitter, Dalgaard said he?s going to become an investor. One other factor that is likely playing into his decision to leave SAP is the fact that he has a 3-year-old son who is battling leukemia.
Dalgaard just tweeted this about an hour ago:
Look forward to becoming worlds best professional investor ? and continue to help SAP as formal advisor ? will try to honor all I learnedSAP cloud efforts will now be headed up by Bob Calderoni, the CEO of Ariba, another cloud company that SAP acquired last year for $4.3 billion, and Rob Enslin, an SAP veteran.
Keirstead worries that the pair may not bring enough HR-specific expertise to the business. Ariba runs a cloud-based network focused on business-to-business commerce ? human capital management in the cloud is still a pretty hot business. Earlier this week, Workday reported a smaller-than-expected loss and raised its revenue outlook for the year.
As Keirstead at BMO put it: ?Our key concern is that SAP?s on-premises business is most vulnerable on the HCM [human capital management] side, where Workday is increasingly competitive and where Dalgaard brought strong domain expertise. SAP?s new cloud business head [Calderoni] has no such expertise in the HCM arena and in our judgment will need to bolster SAP?s presence with some key HCM hires.?
For what it?s worth, SAP shares are down by more than 3 percent this morning to $75.85.
Source: http://allthingsd.com/20130524/successfactors-ceo-dalgaard-leaving-sap-in-cloud-business-shake-up/
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