Philly EnterpriseTech Highlights 6/13-6/15: SAP says Azure is preferred Cloud; Elliot Management going UpMarket, but are profits the same?

Morgan is out as SAP co-CEO

Tom Paine

Jennifer Morgan, the Newtown Square-based co-CEO of SAP, is leaving the giant business software company, the Wall Street Journal reported.

Christian Kiein, 39 years old and based in Germany, moves from co-CEO to sole CEO.

“More than ever, the current environment requires companies to take swift, determined action which is best supported by a very clear leadership structure. Therefore, the decision to transfer from Co-CEO to sole CEO model was taken earlier than planned to ensure strong, unambiguous steering in times of an unprecedented crisis,” the company said in a statement.

Ms. Morgan, 48, joined SAP in 20o4. She followed former SAP CEO Bill McDermott, now CEO of ServiceNow, to SAP, and was percieved as his protoge.

The true point of contention that led to this sudden decision is not yet known. Morgan became co-CEO along-side Klein in October of last year.

This article by Virginia Backaitis offers some possible explanations.

Philly EnterpriseTech Highlights 4/8 & 4/9: Hot COBOL market; Co-CEO: SAP Has 2x as Many Cloud ERP Customers as Oracle

First Round Capital an early investor

Tech Events Status Changes due to #CoronaVirus: SAP Cancels Sapphire Now And Partner Summit, Plans Digital Events

Updates added as received. (Tweet to @phillytechnews)

Updates added as received. (Tweet to @phillytechnews)

American Academy of Allergy, Asthma & Immunology (AAAAI), Philadelphia, 3/13/20 – 3/16/20: Monitoring developments but no plans to cancel or postpone at this time.

Philly EnterpriseTech Highlights 2/19 to 2/21: Another SAP reorg; Comcast said to seek Vudu

Philly EnterpriseTech Highlights 2/1/20- 2/2/20

Philly EnterpriseTech Highlights 1/27-1/28: Report-Wawa card breach may rank as one of the biggest

Philly EnterpriseTech Highlights 1/21-1/22: Who’s at Davos; Qlik Acquisition

Local publication interview with new SAP CEO Morgan

Jennifer Morgan (Wikipedia)

Delco Today, a local web magazine in Delaware County, PA where SAP’s North American headquarters is located, interviewed Jennifer Morgan, SAP’s new co-CEO, and her husband Michael in 2017. It provides a lot more insight into who Jennifer is and where she came from than I’ve seen anywhere else.

One thing I did not know: Morgan came to SAP from Oracle’s Siebel Systems, and that’s where she met Bill McDermott and later followed him to SAP. She’s from Northern Virginia and attended James Madison University. Morgan is 48 and her fellow co-CEO,  Christian Klein, is only 39. She is from the client side while Klein is from the tech side.

Morgan joins Safra Catz (Oracle) and Julie Sweet (Accenture) as women leading major enterprise technology companies.

Looking at Salesforce vs SAP present & future

Update 2/9: Salesforce (CRM) briefly passed SAP (SAP SE) in total market value for the 1st time during the past week .

As of Friday close (2/7)

Market CAP:

CRM $164.7bn

SAP SE $165.2bn

Comparison Chart. https://yhoo.it/2H35VQO

file:///Users/thomasallenpaine/Desktop/EKCWcIgX0AACcUq.jpg

Tom Paine

I’ve been wondering for some time whether Salesforce’s (NYSE: CRM) growth would falter, but it really hasn’t yet in a big way. Though a string of acquisitions have had a dilutive effect, investors have rewarded it with a growth premium in terms of a higher Price to Earnings (PE) ratio. Its somewhat akin to what happened last year when Netflix briefly surpassed Comcast in market value. Such a PE advantage, though tenuous, gives Salesforce a strong currency for acquiring others.

Salesforce may be on the verge of becoming a more powerful enterprise player than the possibly capital-constrained SAP, under pressure from an activist investor, in spite of its considerably smaller revenue & profit base.

Comparative share prices: Salesforce (light blue) vs SAP (dark blue) Past 5 years

CRM Mkt cap$146.8B
SAP SE Mkt cap$162.4B

In 2018, SAP redesigned & retargeted its CRM, but its way too early to measure how effective that relaunch has been.

SAP CRX ( Qualtrics): The acquisition of Qualtrics opens up an adjacent market to CRM that Salesforce isn’t much of a player in today.

Salesforce could move more into SAP’s space:

Salesforce Options

  • Buying WorkDay would appear financially feasible, though WDAY founders control voting stock (they won’t allow another Peoplesoft). WDAY brings Financial ERP as well as HCM.
  • Continue partnerships or consolidate RootStock & Financial Force (manufacturing & financial ERP)
  • Buy Zoho if available. Threat to cannibalize Salesforce’s own core business, but could be like Microsoft’s Great Plains acquisition

Salesforce acquisition target list leaked in 2016 – What’s happened since

Adobe Mkt cap 134.91B, essentially the same as CRM

LinkedIn . Acquired by MSFT for $26.2 billion

Workday . Mkt Cap $39.9 billion

ServiceNow . Mkt Cap $50.8 billion

Netsuite . Acquired by Oracle for ~$9.3 billion

Tableau Acquired by Salesforce for $15.7 billion

Pegasystems . Mkt Cap $5.7 billion

Qlik Acquired by Thoma Bravo for $3 billion

Veeva . Mkt Cap $21.7 billion

Box . Mkt Cap $2.6 billion; Recent activist stake

Demandware . Acquired by Salesforce for $2.8 billion

Zendesk Mkt Cap $8.6 billion

Marketo Acquired by Adobe for $4.8 billion

Hubspot . Mkt Cap $6.8 billion

Salesforce’s Mulesoft acquisition last year was totally off the chart. SAP owns no equivalent.

Salesforce needs to decide whether to build a strategy around smaller customers, or double down on larger customers.

Salesforce is also likely looking at ways to accelerate its CRX ambitions.

Another possibility is a dead stop to Salesforce’s organic growth, but that seems unlikely given the size and projected growth of the market

Not discounting Oracle at all, but see it more as a hard engineering company, inconsistent in end user applications.