by Thomas Wailgum

SAP Tells Employees: ‘Do Not Order Any New IT Equipment at This Time’

Oct 15, 20082 mins
Enterprise Applications

That delicious sound bite was delivered recently by SAP’s co-CEOs, Henning Kagermann and Leo Apotheker, in an internal company e-mail sent to SAP employees. Mind you, these are the same two executives who, a couple months back, brightened SAP’s full-year forecast to the “top end” of its previous financial guidance.

And now, in early October, SAP is locking down on its tech spending, ceasing all hiring and canceling all non-customer-facing travel, according to the e-mail, which was obtained by the Wall Street Journal‘s Ben Worthen. (A rueful Kagermann pre-announced disappointing Q3 results on Oct. 6, noting that “Throughout the third quarter we felt quite positive about our ability to meet our expectations.”)

So what happened to the bright outlook and Q3 bravado? I suppose that, like so many lines of credit, 401(k) balances and investor confidence, it’s long gone.

The distressing reversal of fortune is best summed up in this part of the internal SAP e-mail: “We will review all planned investments in IT equipment, hardware, software, facilities, and company cars, as well as internal IT projects,” wrote the co-CEOs. “Do not order any new equipment at this time.”

Hmmmm. This is the same company that will, no doubt, be encouraging its customers and noncustomers to upgrade or purchase SAP’s ERP, CRM, supply chain or any of its other range of products now that the economy has gotten tough, because this is when the “great companies” separate themselves from their competitors by using IT applications to their advantage. (Preferably SAP applications, of course.)

And this is the same company that is raising maintenance fees for its customers, to the ire of many of them.

So, I wonder if Kagermann and Apotheker’s newfound corporate strategy (“Do not order any new IT equipment at this time”) is one that they would want their customer base to follow as well?