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Shai Agassi is Leaving SAP

Posted on Wednesday, Mar 28th 2007

WSJ reports:

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Shai Agassi, president of SAP’s product and technology group and architect of SAP’s Netweaver software, is leaving the company to pursue interests in alternative energy and climate change, says a person familiar with the move.

The charismatic Mr. Agassi, 37, was among several SAP executives considered a potential successor to Chief Executive Henning Kagermann, who recently extended his contract through 2009. Mr. Agassi joined the company in 2001 when SAP acquired TopTier Software, a U.S.-Israeli firm Mr. Agassi founded.

An SAP spokesman declined to comment.

The Palo-Alto, Calif.-based Mr. Agassi is one of a handful of non-Germans in the top ranks of SAP’s executives, and is known inside the company for his brash manner. In meetings in recent months to discuss the company’s strategy, he expressed dissatisfaction with the company’s focus on short-term goals rather than on long-term progress, according to one person familiar with the matter.

Mr. Agassi’s responsibilities will be split among other executives, according to people familiar with the matter. Jim Hagemann Snabe, currently in charge of SAP’s products for industry users, will take over the bulk of those responsibilities, according to one person familiar with the matter.

The move comes as SAP seeks to shake up its corporate culture and shift to more flexible, Internet-savvy software. Much of that move was being led by Mr. Agassi.

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This will be a major blow to SAP’s efforts in adapting itself to Enterprise 3.0. However, it is not an unexpected development, since it is hard to imagine Agassi’s brash style to be compatible with SAP’s culture.

SAP has a very old-fashioned structure in every way, including compensation. Upside is not shared with employees except for a very small group in the absolute top management. There is hardly any concept of equity based incentives for the broader employeebase, and Shai was one of the people who opposed this practice. In a market where the competition for talent is severe, SAP simply doesn’t offer a framework for attracting top talent.

Beyond that, Agassi has tried to tilt SAP’s power structure towards his homebase in Palo Alto,
and insisted on leveraging Silicon Valley’s fast-paced innovation culture. This has created tension between Germany and Palo Alto, and has not been an altogether successful effort. Shai brought in many Silicon Valley executives into SAP, but it has been difficult for many of them to perform under the SAP structure, and deliver outstanding results. While Shai has instituted many changes at SAP, there are many areas that he would have liked to change, but hasn’t been successful, and would not be successful, unless he managed to get the CEO job right away.

Shai, at the end of the day, is an entrepreneur. It is hard for a man of his profile to commit to slogging for 10-15 years inside a large company, waiting for a possible CEO slot. He has the itch that most entrepreneurs do, to be the boss, and to be the full and complete owner of his destiny. While he has been a great deal more successful than most others of his ilk, in working at a large company, he is simply not cut out of the cloth that signs off 25 years of his life onto working for someone else.

Unfortunately for SAP, it is quite possible, that they will lose a lot of top executives who are more of the Silicon Valley bent, and are also finding it frustrating to be effective inside a largely German structure. On the other hand, SAP is a strong company that has weathered a lot of years of competition, and has emerged as one of the leaders in Enterprise Software. Hopefully, Shai Agassi’s departure doesn’t halt their process of reinventing themselves into a more innovative, faster-paced company.

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[...] Sramana Mitra: (who I met in person for the first time yesterday) [...]

Shai Agassi Roundup : Venture Chronicles Wednesday, March 28, 2007 at 6:08 PM PT

[...] Agassi, president of SAP’s product and technology group is leaving the company, reports WSJ, to pursue other interests in climate change and alternative energy. Of [...]

GigaOM » Set, game match: Agassi Wednesday, March 28, 2007 at 8:39 PM PT

You have to think that Oracle would be feeling pretty good about this. NetWeaver is now going to be more questioned by everyone since Shai was heading up that effort. What do you think Sramana.

Mukund Mohan Wednesday, March 28, 2007 at 9:43 PM PT

As someone said, Oracle will use this opportunity to spread a whole lot of FUD. At the end of the day, though, I think this was an inevitable departure.

Sramana Mitra Wednesday, March 28, 2007 at 10:00 PM PT

The departure of Shai Agassi is as suprising as his move to clean investment. Being an entrepreneur in Silicon Valley and that he was in Davos recently for WEF, I guess he is going to become a VC. It is a blow to SAP as Shai understands Oracle and the market needs much better.

Aravind Thursday, March 29, 2007 at 12:16 AM PT

[...] Mitra has a little bit of a different take on Shai Agassi’s departure than mine. At first blush, it’s a distinction almost without [...]

The Monash Report»Blog Archive » More on Shai Agassi and SAP Thursday, March 29, 2007 at 7:04 PM PT

Actually, you’re almost 180 off about Shai’s departure delaying SAP’s move to “Enterprise 3.0″. Shai was a brilliant guy and a visionary, but his execution skills were marginal, he surrounded himself mostly with sycophants, and he was admittedly and unabashedly the “innovation gatekeeper” – translate this to “bottleneck”. I think that the true irony is that Shai’s own departure will actually ACCELERATE the realization of Shai’s own vision.

Knowledgeable1 Saturday, March 31, 2007 at 2:10 PM PT

[...] quote: “When Enterprise 3.0 meets Web 2.0, the game will get really exciting!” Well, Shai has since announced his departure from SAP, leaving that vision without a champion, and focusing his own attention elsewhere, in [...]

Sramana Mitra on Strategy » Blog Archive » Salesforce.com Steps into the Main Arena Tuesday, April 10, 2007 at 6:20 PM PT

[...] cleantech rhetoric features in every career move these days. Shai Agassi recently quit the run for the CEO job at SAP to pursue greener pastures. Sass Somekh quit as the President of Novellus to focus on alternative energy. And John Doerr seems [...]

Sramana Mitra on Strategy » Blog Archive » Cleantech is Cool Friday, May 18, 2007 at 5:44 AM PT

[...] foresaw vast opportunity when SAP embraced SOA at the Boston Sapphire event two years ago. But the departure of Shai Agassi, president of SAP’s product and technology group and architect of SAP’s NetWeaver [...]

» SAP: Opportunities lost? | Dana Gardner’s BriefingsDirect | ZDNet.com Tuesday, May 22, 2007 at 5:47 PM PT

[...] Blogger Sramana Mitra: This will be a major blow to SAP’s efforts in adapting itself to Enterprise 3.0. However, it is not an unexpected development, since it is hard to imagine Agassi’s brash style to be compatible with SAP’s culture. SAP has a very old-fashioned structure in every way, including compensation. Upside is not shared with employees except for a very small group in the absolute top management. There is hardly any concept of equity based incentives for the broader employee base, and Shai was one of the people who opposed this practice. In a market where the competition for talent is severe, SAP simply doesn’t offer a framework for attracting top talent. [...]

» SAP under the microscope post Agassi | Between the Lines | ZDNet.com Wednesday, May 23, 2007 at 12:16 PM PT

[...] March 2007, Hasso Plattner’s blue-eyed boy Shai Agassi left abruptly. Shai was widely believed to be the heir apparent at SAP. Henning Kagermann extended his contract [...]

European Software Consolidation - Sramana Mitra on Strategy Monday, October 8, 2007 at 10:25 AM PT

[...] CEO, Shai Agassi, was once up for CEO of SAP, the fifth largest software company in the world. He left to start Project Better Place. The company has also gotten some serious funding ($200 million to start, for their work in Israel) [...]

HellaFrank » On the Road to Electric Vehicles Tuesday, July 1, 2008 at 6:50 AM PT
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