Cloud Cover

SAP is gearing up for battle against Salesforce

SAP – Jahreszahlen
He has his own silver lining playbook for the cloud. Source: dpa

Bill McDermott has big plans for SAP’s future. “We have been on a mission to be a leader in the US for a long time,” the CEO of the German software giant told Handelsblatt. When the New Yorker first joined SAP in 2002, the company had about 4,000 employees in the US. Since then, that number has grown to 25,000. “The US is the number one market,” he said.

He sees SAP’s future in the cloud. “The whole company is cloud,” he said. Now, he has set his sights on expanding the customer relationship management business. “We’re going to turn up the jets and we’re going after CRM with everything we have.”

The CRM technology helps a company manage relationships and interactions with potential and current customers. CRM market leader Salesforce is currently well ahead of SAP. According to market researcher Gartner, the US company has a market share of 18 percent, while the German firm takes up second place with 9 percent.

“We’re going to turn up the jets and we’re going after CRM with everything we have.”

Bill McDermott, CEO, SAP

Mr. McDermott wants to challenge Salesforce’s market leadership position – fast. SAP has acquired several companies for its CRM portfolio, including Gigya and most recently, Calludis Cloud for $2.4 billion. The California-based company makes cloud-based human resources and sales solutions. He added, “The current CRM market is a little under $50 billion and it’s growing in double-digits.” He expects his company to overtake Salesforce in a few years.

Europe’s top technology company is headquartered in Walldorf, southern Germany. But Mr. McDermott is often on the move from the Middle East to China to North America to help expand SAP’s business. While Germany is a worldwide leader in manufacturing and engineering, he said, staying ahead of the curve on rapid changes in the digital sphere remains a challenge. Mr. McDermott sees this as an opportunity for growth.

Since 2010, when he took over as CEO, the market value of SAP has almost tripled. The company has a market capitalization of just under €104 billion and is the most valuable company in the DAX. The American businessman now has grand visions to become an even bigger player on the world stage. Mr. McDermott wants to triple SAP’s market value again over the next eight years.

SAP is still crunching numbers to analyze the potential impact of the US tax reform. But Mr. McDermott emphasized, “We’re going to invest in the US regardless of the tax.” However, that growth plan will not have a negative impact on Germany, the 56-year-old added. “We’re investing more in Germany than any other market.”

In the interview, he called Germany a “leader in industry 4.0,” which takes into account artificial intelligence, machine learning and blockchain. “Germany is probably the best market in the world for mid-market companies” and will be a “thought leader.”

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Christof Kerkmann writes about the technology sector for Handelsblatt and Sebastian Matthes is Handelsblatt’s Head of Digital. To contact the authors:  kerkmann@handelsblatt.com and matthes@handelsblatt.com.

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