As has been said on other posts, especially after the Q2 results which were clearly designed to emphasize the revenue numbers and ignore the continuing decline on Profitability. I can understand this as the company is attempting to balance the scrutiny of the investment community while we search for a new CFO to attempt to quell the external pressure and also prepare for a new chairman as Hasso departs.
But the facts are the company has never been able to get a handle on expenses and both operating margin and profit have suffered. Just look at the size of the Sales and Marketing organizations, which have grown year after year and now sit at about 30,000 employees (30% of the overall employee base), which is also just about equal to the R&D team. So between both of these Board Area we have a total cost for 60,000 employees, then on top of this is all of the 3rd party consulting support costs both teams retain. Amazing - especially since most of our R&D over the last 10 years has been acquired thru acquisitions and not organically.
What we have here is an extremely well compensated Sales organization, where all of them are in the six figures and many, many are deep into the six figure salary. They are treated tremendously well, who reading this have been to one of the Winner's Circle events to see the outlandish extravagance laid on these folks ( who BTW are bringing in deals that have revenue but little profit) and for this you get all expenses paid for you and your family to Hawaii. On the other hand we have R&D which is mostly based in Germany where they have perks and benefits the rest of us do not have, which comes at significant cost.
The facts are that Hasso was a great entrepreneur and had the foresight with the others to develop this great company and Bill M was a great salesman, but the facts are that neither one of these two ever had the requisite experience to effectively run from end to end a complex/global organization the size of SAP. A seasoned CEO and supporting executive team should have been brought in long ago. The facts are Hasso or Bill simply never cared about the expense side of the Business. They were only concerned about putting up big revenue numbers and year after year posted poor operating margin and profit numbers and never cared or figured out how to properly address it. They just didn't care about this area because neither one had the experience as to how to manage costs or expenses in a company like SAP. Perhaps a new CFO and Chairmen might be able to address these problem areas ( with some pressure from the "activist investors" who are running out of patience ) and it will be a sorry day for all of us, when the investors demand a stronger hand come in to straighten this out. But in the meantime, Winner's circle anyone????? Grab it while you can.