“COUNT ON US, hold us accountable and together we will reinvent the way businesses run.” Thus ends a recent letter of support from 337 senior managers at SAP, a maker of business software, to Christian Klein, their chief executive. In April Mr Klein, then a stripling 39 years old, took over as sole boss of Europe’s biggest technology firm, after running it for a few months in tandem with Jennifer Morgan, an American who used to helm SAP’s business across the Atlantic. He needs all the love he can get, for SAP faces a challenge.
Mr Klein became CEO at the peak of covid-19’s first wave. It had hurt SAP more than other tech firms: many of its biggest clients, such as carmakers and energy companies, were temporarily hit by the pandemic. And it struck as more rivals were vying for swathes of the business-software market that the German giant used to rule.
Then, in October, Mr Klein was humbled when he presented changes to SAP’s business model that would depress margins in the short run and delay earlier revenue and profit targets by two years. Combined with lacklustre results for the third quarter, the news shaved 22% off the firm’s share price, wiping out €35bn ($41bn) in market value, the sharpest drop in 21 years and almost unheard of for a firm of SAP’s size (see top chart). The purchase of almost €250m in SAP…