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SAP's President Steps Down, Announces Managerial Changes

Zacks Equity Research

SAP SE SAP announced that Robert Enslin has stepped down from his role as president and executive board member of the company’s Cloud Business Group (CBG). Enslin will be replaced by Jennifer Morgan, who is currently serving as the executive board member of SAP.

Adaire Fox-Martin will take the position of president of the company’s Global Customer Operations (GCO). All these appointments and managerial changes are effective immediately.

Enslinhad joined SAP in 1992, and was appointed as president of SAP’s Global Customer Operations in 2014. Under the stewardship of Enslin, the company grew significantly over and enhanced itscloud portfolio, including acquisition of Qualtrics for $8 billion last year.

Reportedly, Enslin’s resignation was owing to the company’s restructuring activities. Notably, the company had announced a layoff of around 4,400 peoplein January under the restructuring operations. 

Per the press release, “A respected technology leader with a unique global perspective on business and economic trends, he earned a highly favorable reputation with customers and industry analysts.”

Following the news, shares of the company declined 1.2%. Notably, shares of SAP have gained just 6.9% year over year, underperforming the industry’s rally of 28.3%.

To Conclude

The company is anticipated to strengthen foothold in the customer relationship management market against peers including salesforce.com CRM, Oracle ORCL, among others.

Additionally, continued market traction of the SAP S/4HANA platform is proving to be a robust growth driver. During the last reported quarter, S/4HANA adoption surged 33% from the year-ago quarter to 10,500 customers, which includes BlackRock, Kellogg, Microsoft MSFT, Mastercard and Under Armour.

SAP HANA Cloud Platform and its partners have been gaining rapid popularity, assisting clients extend their functionalities, building new applications, and integrating across cloud and on-premise platforms, in turn fueling growth. It has been acting as a catalyst since its introduction. The company constantly upgrades existing products and launches fresh ones to gain customers.

Cloud still remains an expanding market with high growth prospects. In a recent report, Gartner projected the public cloud market to reach $411.4 billion by 2020. According to International Trade Administration, the Chinese cloud market is likely to touch $20 billion mark by 2020 at a CAGR of 40%.

We believe that SAP, with its ongoing initiatives, is well poised to capitalize on potential of the market. In fact, the cloud computing is likely to be one of its major growth drivers in the long run.

Zacks Rank

Currently, SAP carries a Zacks Rank #3 (Hold).You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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