With SAP’s revenue, market cap, growth rate, and market perception at all-time highs, the imminent ousters of chief revenue officer Scott Russell and chief marketing and solutions officer Julia White strike me as utterly baffling.
Help me understand this: SAP’s overall cloud growth rate of 25% and its Cloud ERP Suite growth rate of 33% are 2X to 3X higher than the cloud-applications growth rates of major competitors Oracle and Salesforce — so the SAP Supervisory Board decides that now is the time to push out the chief revenue officer who delivered those results and the CMSO who has reshaped the public perception of the 52-year-old company?
I don’t get it.
Particularly because, just 16 months ago, SAP extended the contracts of both Russell and White for three additional years through the end of 2027. At that time, former chairman Hasso Plattner — and the key word now appears to be “former” — offered this perspective on the extremely vital contributions from both White and Russell: “We express our gratitude to Julia and Scott for their excellent work, which has significantly propelled the company forward. With their exceptional skills and expertise, we are confident that they will continue to provide the necessary drive for their respective Board areas to manage the opportunities and challenges ahead.”
In light of those fairly recent comments from the iconic co-founder and longtime leader of the company, surely there’s more to these top-level changes than what SAP offered in its very carefully worded press release late last month. Here are the key excerpts, and then I’ll offer my own conjecture on what precipitated these moves:
- “…the SAP Supervisory Board has reached a mutual agreement with Executive Board members Scott Russell and Julia White to leave the company’s Executive Board, effective August 31st.”
- “Chief Revenue Officer Scott Russell has played a central role in helping SAP customers around the world on their journey to the cloud. His success gives SAP the opportunity to develop the full potential of the company’s best-of-suite offering, ensuring customers take advantage of SAP’s solutions to maximize agility and innovation. A search for Scott Russell’s successor is underway.”
- “Chief Marketing and Solutions Officer Julia White has successfully modernized marketing and communications while also building SAP’s product marketing function to support a cloud-first model. SAP will now strengthen the synergy between product marketing and product teams by bringing those teams together. The SAP Supervisory Board and Julia White agreed that this notable shift marks an appropriate juncture to dissolve the distinct Marketing & Solutions board area. This adjustment, effective September 1st, streamlines SAP’s Executive Board structure.”
- ” ‘In the context of SAP’s ongoing successful cloud transformation, the SAP Supervisory Board believes now is the moment to embark on the next era of growth,’ said Pekka Ala-Pietilä, Chairman of the Supervisory Board SAP SE.”
- ” ‘Scott and Julia have contributed significantly to SAP’s successful business transition in the cloud and our leadership in Business AI,’ said SAP CEO Christian Klein,” who went on to thank White and Russell for their contributions and wish them well in the future.
- “The changes will further accelerate the company’s transformation and enhance its focus on a Suite- and AI-first strategy.“
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Okay — so if I can boil that down, the press release is telling us this:
- Russell is being replaced as CRO.
- White’s position as chief marketing and solutions officer is not being replaced.
- Product marketing, which had been under White, is being absorbed into the product teams.
- The elimination of the CMSO position “streamlines” the Executive Board.
- The departures of Russell and White, and the elimination of White’s CMSO role, will somehow not only “further accelerate the company’s transformation” but also “enhance its focus on a Suite- and AI-first strategy.”
My Conjecture Re Scott Russell
Since the contract extensions for Russell and White 16 months ago, SAP has undergone two very big personnel changes: Plattner is no longer chairman and outsider Ala-Pietila has taken his place; and former head of product engineering Thomas Saueressig has moved into a new Executive Board role in which he leads Customer Services and Delivery.
I believe Saueressig’s new role holds enormous value and potential for customers as that team is directly responsible for ensuring that as SAP customers move to the cloud, they do so successfully and achieve their desired business outcomes. So this is clearly an area of great significance for SAP’s customers, and I think it’s fair to say that Saueressig’s team could have been called “Customer Success.”
The problem is that when Russell joined the Executive Board 3.5 years ago, the area he led was called exactly that: Customer Success. The idea was to unify the functions of sales, service, and support into a seamless team to provide customers with simplified experiences and better outcomes. At the time, it was an excellent idea.
But over those 3.5 years, more and more of SAP’s on-prem customers began to move to the cloud, and the company needed to ensure that not only were its internal customer-facing teams unified, but that those customers were receiving from SAP levels of insight and guidance and expertise that no competitor could match. That was the impetus for creating the new board position — Customer Services and Delivery — under Saueressig, who has not only world-class technology expertise but also deep experience with customers.
So in a vacuum, that move made perfect sense.
But life doesn’t take place in vacuums, and the new role for Saueressig meant a reduction in the scope of Russell’s role from overseeing all of Customer Success to being singularly focused on sales as chief revenue officer.
Russell is a remarkably upbeat and charismatic leader, and someone who has always talked about the company and his colleagues rather than himself. But at the same time, it’s also entirely feasible that Russell was less than delighted with his diminished role — and while he delivered exceptional revenue results for the company, it is reasonable to expect that he was disappointed by the move and wanted the chance to look elsewhere for a bigger challenge.
Publicly, however, Russell was his typically gracious and upbeat and optimistic self, saying in a LinkedIn post about his imminent departure that “This hard work will continue, through the leadership of SAP CEO Christian Klein and our wonderful leaders across Customer Success. I have every confidence in these talented leaders who will bring SAP to new heights. I move forward with a feeling of immense gratitude to SAP for a wonderful career. We had an amazing journey together and I am so thankful to have shared it with you. The future is exciting, and filled with opportunity, and I am sure our best days are yet to come.”
My Conjecture Re Julia White
For Julia White, it is ironic that the expanded role she helped to create when she first joined SAP four years ago — not just CMO but chief marketing and solutions officer — served the company extremely well over that time but is now considered by the company to be obsolete.
As noted above, SAP appears to be eliminating the CMSO role entirely — this is the “streamlining” of the Executive Board — and at this time it’s not clear if SAP will be hiring a CMO. I think it’s highly likely they’ll be doing that.
White’s LinkedIn post about her departure from SAP was equally graceful, as she said in part, “I couldn’t be more proud of the many accomplishments and the growth we’ve achieved together. It has been an honor to work with so many talented people and I’m thankful for the many new friends I have made. Thank you to my colleagues, partners, and customers for making this journey unforgettable.”
White and her team did indeed produce “many accomplishments” and the company is unquestionably better and more clearly positioned than it was before her arrival. She was a fast-rising star at Microsoft before joining SAP, and she will surely be an outstanding addition to some lucky company soon.
Final Thought
As noted above, the departures of Russell and White baffle me, and are likely to do so for a long time simply because during their tenures at the highest levels of the company, SAP achieved remarkable success and is better positioned than at any time in its history.
But at the same time, I also have to say that CEO Christian Klein has demonstrated a remarkable ability to keep his company elegantly aligned with customers and deftly ahead of its competitors. While I have zero insight as to his thinking about the departures of Russell and White, I can say this: in his 4.5 years as CEO, Klein has been spot-on with every major decision he has made, and he has earned the right to be given some time before we can judge whether SAP can be even better off without Russell and White than it has been with them.
