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SAP’s Bill McDermott on stepping down as CEO

SAP’s CEO Bill McDermott today announced that he wouldn’t seek to renew his contract for the next year and step down immediately after nine years at the helm of the German enterprise giant.

Shortly after the announcement, I talked to McDermott, as well as SAP’s new co-CEOs Jennifer Morgan and Christian Klein. During the call, McDermott stressed that his decision to step down was very much a personal one, and that while he’s not ready to retire just yet, he simply believes that now is the right time for him to pass on the reins of the company.

To say that today’s news came as a surprise is a bit of an understatement, but it seems like it’s something McDermott has been thinking about for a while. But after talking to McDermott, Morgan and Klein, I can’t help but think that the actual decision came rather recently.

I last spoke to McDermott about a month ago, during a fireside chat at our TechCrunch Sessions: Enterprise event. At the time, I didn’t come away with the impression that this was a CEO on his way out (though McDermott reminded me that if he had already made up his decision a month ago, he probably wouldn’t have given it away anyway).

“I’m not afraid to make decisions. That’s one of the things I’m known for,” he told me when I asked him about how the process unfolded. “This one, I did a lot of deep soul searching. I really did think about it very heavily — and I know that it’s the right time and that’s why I’m so happy. When you can make decisions from a position of strength, you’re always happy.”

He also noted that he has been with SAP for 17 years, with almost 10 years as CEO, and that he recently spent some time talking to fellow high-level CEOs.

“The consensus was 10 years is about the right amount of time for a CEO because you’ve accomplished a lot of things if you did the job well, but you certainly didn’t stay too long. And if you did really well, you had a fantastic success plan,” he said.

In “the recent past,” McDermott met with SAP chairman and co-founder Hasso Plattner to explain to him that he wouldn’t renew his contract. According to McDermott, both of them agreed that the company is currently at “maximum strength” and that this would be the best time to put the succession plan into action.

SAP co-CEO Jennifer Morgan.

“With the continuity of Jennifer and Christian obviously already serving on the board and doing an unbelievable job, we said let’s control our destiny. I’m not going to renew, and these are the two best people for the job without question. Then they’ll get a chance to go to Capital Markets Day [in November]. Set that next phase of our growth story. Kick off the New Year — and do so with a clean slate and a clean …read more

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