https://finance.yahoo.com/news/salesforce-shuts-hong-kong-office-175759369.html
A serious move by one of our main competitors, Salesforce.
SAP should also consider shutting down offices in countries who do not share values ( whether they be climate or other territorial issues) of western civilized governments.
We closed down operations in Russia and we should look elsewhere as to who shares the same values of SAP and where there is major differences, we should leave.
It is very unfair to treat China as Russia. The two countries are very difference countries. 99.9% of Chinese people wants peaceful life and jobs. That's all!
https://www.ft.com/content/0943c969-01b0-481a-9f4b-ee38323561d5
China is the topic because the situation which is arising over Taiwan is increasing becoming more volatile. China is currently engaged in the largest military build up since WW2 - they do this for a reason . This is exactly the playbook Russia took before they invaded Ukraine.
We must remember that Christian and Luka told in the Q2 results that operating profit was down 32%, due to the impact of the war between Russia and Ukraine. It was a significant loss. Do we want a repeat of even greater magnitude?
Therefore given the tensions building, SAP has to evaluate its presence. Otherwise we risk another and much more significant set of losses should these tensions lead to a conflict. This is what many other companies are already doing, prudency would say SAP should be doing the same evaluation.
https://www.ft.com/content/0943c969-01b0-481a-9f4b-
If there are other regions which present such tensions, these must be looked as well.
Not sure, why China is a topic here. SAP has general problems in the world outside China.
The exodus leaving China is much more widespread than most people are aware. But companies in all countries are rethinking the ramifications of staying in China in light of growing tensions. If tension escalates, it will be very bad for those left in.
SAP must begin considerations of its presence like all of others are doing before it is too late.
https://www.reuters.com/markets/british-businesses-turning-away-china-industry-group-says-2022-07-30/
You speak about our Board and what strategic thinking and strengths they bring. Just have a look at companies who are the same size as SAP, they are in different industries, but are Global and same scale as SAP.
Just look at the background of the CEO's and Leadership team of companies like, PayPal, SONY, Citigroup.. what you find is that the Executive team has worked at multiple organizations (in some cases even different industries) and all of these past positions have been C-Level assignments. On top they are recognized by world wide associations for their leadership, vision and corporate strategic qualities. They bring a wealth of knowledge, stature and experience to the current roles they have.
Just only a few years ago Christian was preparing quarterly financial reports for the Controlling team and Thomas was a mid level project manager. And this is our comparison to the highly skilled CEO's of similar companies to SAP . Really ? You can be sure that no one on our Board is thinking at all about what are the possibilities which could cascade out of a conflict in China/APC region.
There is no question that SAP and Salesforce compete against one another. Gartner is not needed to verify this, simply just send a note to Scott Russell and ask how often his team comes up against Salesforce and that will solve the issue.
But the point that was being made was that if a company with whom we share space like Salesforce ( and others like Yahoo, Apple, Home Depot....) have made the decision to depart China, then it would be extreme incompetence for SAP not to also evaluate the matter.
It's called "Strategic Planning" and I would expect that our Board is already doing the proper risk analysis on the pro and con of leaving or staying in China in light of the tensions building.
It's precisely the focal point of what Board members do as part of their core responsibilities and I would fully expect that Christian and the others are doing exactly this - because if they are not doing this type of strategic thinking, then who is?
And maybe at some point they will share with us, what is the plan forward.
Let's take a stand and ask the following not to do business in China:
Costco
Amazon
Walmart
GM
Ford
Disney
etc.
Are you stupid?
____________________________________________________________________________________
Actually I do not believe that any of the companies mentioned above are doing business today in Russia, they all departed after the fact just like we did.
@8bzs+1i8nv9Bd completely missed the point and if they read a bit more carefully, the point the author was making was that SAP should consider preemptively on whether to close offices in Countries which do not share the same values, especially in light of the ever increasing tensions.
One of the posts listed the companies who have already viewed the situation as too volatile in China and have already departed, so clear that the person posting this knows very little - may help to read the news from time to time. In fact, the exodus has already begun for those companies who learned from what has happened elsewhere and are taking early measures to protect themselves.
I guess that not everybody is forward thinking and believes in planning ahead to avoid potential catastrophes and is willing to wait for conflicts to happen and then we can blame another quarter losses, (just like we blamed Q2/22 losses on our leaving Russia), on the fact that we remained in these dangerous locations and were too stupid to get out ahead of time.
But @8bzs+1i8nv9Bd is perfectly right, there really was nothing to learn from our departure out of Russia, was there ?? and accordingly we should just stumble ahead without a moment's forethought on what is the proper action that should be considered and all as far as those companies who are leaving China as we write these posts, now what do they really know anyhow??
Good news is that nobody in any type of decision making position would ask a smart person like yourself for your opinion on how to guide the company in a situation like this, otherwise we can write off another couple of quarters of losses. We need more people like yourself who run with blinders on.
🤦♂️ Looked at the Gartner link in the other post.
🤣 top user reviews say that SAP is OK but Salesforce is better. Customer references say it all. Salesforce is the gold standard and has won the market.
Must be an SAP pre-sales or Value Engineer commenting. No experience or post sale customer interaction - drinking their blue cool-aid.
Back to the original topic. SAP has significant compliance issues - from Car Wash in Brazil, to corruption in SA. And now the recent issues with venture capital group. Look up how many times SAP was sued and lost for intellectual property theft - I2, Oracle, …
Salesforce may be a competitor to SAP however that does not imply that SAP is a competitor to Salesforce.
They own CX which is a larger addressable market space than ERP.
That appears to be the just of the post.
Salesforce is most certainly a competitor to SAP. Their CRM platform has dominated SAP product for years.
If we are going to beat our competition we must first know who they are and how we compare.
https://www.gartner.com/reviews/market/crm-customer-engagement-center/compare/salesforce-vs-sap
Let's take a stand and ask the following not to do business in China:
Are you stupid?
SAP is not a competitor to Salesforce. Settled years ago.
With that fact SAP settled, SAP has many compliance challenges. One of the drags on our stock price.
The author raises a good point. Will the next AHC address the topic?
What should concern all of us is if the losses in Q2 were the result of SAP pulling out of Russia because of the conflict there, what then would be the case if the same happened in China?
We have many times over the number of employees and business in China and overall APAC region as we do in Russia. Many of our development projects are run out of these locations. Having to pull out of China, would be a monumental catastrophe for us. It's something for which there should be planning especially after what we just learned only months ago in Russia.
Some 15 years ago, SAP got completely caught up in shifting jobs by pitting the "high cost" countries vs the so-called "low cost" ones and because of this many jobs were relocated to support this mandate. Teams were told that for all new hires they could only be brought into these low cost countries where there was little to no experienced oversight to properly orient and manage new members. Major initiatives and projects were launched from these low cost countries were team size exploded year after year.
This was all done entirely on the basis of cost alone, no other factors were considered. Skills, knowledge and aptitude were not evaluated as part of this migration - simply all that mattered was how much money will we save by moving from one area to another. As Bill McD often said, SAP considers China it's second home and accordingly SAP made very deep investments in the country
If the situation in the Asia-Pacific region escalates into a serious conflict, which then entangles other countries into the hostilities, then we will see how wise the judgement was to base location decisions on cost alone.
In such case, SAP will learn the hard way that "everything is not always what it appears to be''. Sticking to what has worked for the past decades has significant merits and attempting to be clever and challenge/disrupt a productive status quo thinking you have just uncovered some major savings opportunity may very well be the straw that broke the camel's back. Only time will tell.
Tensions are increasing each day between China and other countries and it is becoming an increasingly volatile situation.
It's much more than just Salesforce who see an impending catastrophe in China and are departing before they get caught up in a real bad situation
Other companies like Airbnb, Adidas, Home Depot, Yahoo, LinkedIn and others are departing. Apple is also moving manufacturing out of China and into other countries like Viet Nam. The list grows on a weekly basis.
SAP has a significant presence in Shanghai, Beijing and other cities in China and therefore needs to be extremely forward thinking on how these tensions could evolve and make for a bad consequence for the company - RIF's, customer displacement, interrupted product development, etc. could all be unintended outcomes if SAP doesn't recognize what could lie ahead and begin to make and execute plans to deal with it ahead of time, just like the other companies are doing.
Sap is already doing that , but sap works too much on consensus planning . Teams in these locations always come with some business plan and sap keep them around . Instead of consolidating them . That is sap’s curse . Nothing can be done .