SAP’s resident entrepreneur

Shai Agassi, executive board member, is leading SAP from its heritage of complex monolithic applications and toward a future marked by modular components and a services-oriented architecture.

Shai Agassi doesn’t remember the purpose of the first software program he coded, but he does remember sprinting to feed the punch card into the mainframe and watch it run. He was 7.

“I wasn’t allowed into the punch-card area next to the big mainframe,” Agassi says, recalling a computer science program for kids he attended at Israel’s Tel Aviv University. “We had to run a mile to submit the program and get the results.”

Less than three decades later, Agassi leads technology development strategy for Germany’s SAP, the third-largest independent software supplier in the world. At 35, he’s the youngest member of SAP’s executive board. He’s also one of only two non-Germans on that seven-member board.

His rise at SAP has been rapid. Agassi joined the company in 2001 when SAP paid $400 million for his corporate portal software company, TopTier Software – one of four technology companies Agassi founded in the 1990s after graduating with honors from Technion, the Israel Institute of Technology, with a bachelor’s degree in computer science. Today Agassi oversees development of SAP’s integration and application platform and co-leads the company’s applications strategy team. He says he never expected to end up at a company as large as SAP, but he finds it a good fit. “The first year I was at SAP, I fell in love with the company,” he says.

Observers have compared Agassi to Hasso Plattner, SAP’s visionary. “Hasso Plattner was a very similar in his background and outlook. He was a programmer, a techie and someone who had a tremendous amount of business savvy,” says Joshua Greenbaum, a principal at Enterprise Applications Consulting.

Agassi brushes off any suggestions that he is Plattner’s heir apparent, deferring that role to SAP’s current CEO, Henning Kagermann. “Those who’ve met Henning know, the guy’s a genius,” he says.

Agassi says he relishes the time he spent with Plattner, who relinquished his co-CEO title in March. “I had the greatest luck in the world to spend two-and-a-half years being mentored by Hasso,” Agassi says. “Hasso would take me into a room and say, ‘We’re going to talk about 1993 and R3 right now.’ That’s a great lesson.”

Selling infrastructure

Agassi is soft-spoken, but his ideas are grand. Take NetWeaver, the integration and application server middleware that SAP unveiled in January. All SAP business software eventually will run on this new platform – Agassi’s brainchild.

“Agassi deserves most of the credit for having formulated and coalesced SAP’s current technology strategy,” Greenbaum says. “NetWeaver is his baby.”

NetWeaver represents a big shift for SAP; with it, the software company for the first time will be trying to sell infrastructure along with its core business applications. This bold strategy pits SAP against infrastructure stalwarts. “SAP won’t say it, but it clearly is on a war path to compete head to head with IBM, Microsoft and other infrastructure providers of the world,” says Eric Austvold, research director at AMR Research.

The move is a defensive one, Greenbaum says. The next generation of applications will be Web services-based, built on an existing infrastructure. That means the vendor that owns the infrastructure market will define the technology for the applications, he says. “If SAP didn’t do this, SAP would become a component provider to someone else’s grand vision of a service-oriented architecture,” Greenbaum says.

Delivering NetWeaver hasn’t been easy, Agassi says. “I sort of have two sharp sticks in my back. I have the largest enterprise applications developer in the world pushing me to build the best platform for their needs, the SAP applications group. At the same time I’ve got 20,000 customers that are pushing me to give them a broad, horizontal, open standard-based platform to support their needs in general, not just for SAP applications. Aligning these two vectors into one platform – that’s the biggest challenge that one could have.”

Analysts say Agassi is the right man for the job. “NetWeaver is now the technology future of the company. Agassi is the perfect person to put out on that bleeding edge,” Greenbaum says.

His entrepreneurial bent and his experience with TopTier, in particular, brought a fresh view of things into SAP, says David Yockelson, executive vice president and director at Meta Group. “His coming from a fairly nimble, smaller, growth-oriented organization gave him a neat perspective as to what kinds of things needed to go on within SAP from a technology perspective,” he says.

Family affair

During his pre-SAP entrepreneurial days, Agassi worked with his father, Reuven Agassi. The two co-founded a couple of companies, and today they both work at SAP, along with Agassi’s brother.

Agassi still enjoys programming. “Looking at the world from customers’ eyes and then trying to understand where complexity is and then designing it out – that’s sort of been the goal of my programming,” he says. “Engineers love to engineer complexity. Engineering simplicity is a lot harder.”

An ideal day for Agassi would be divided between software development and customer interaction. “When I spend four hours doing a design review with the engineers, and we can find ways to address issues that I’ve advocated from the meeting with customers and figure out a new way of doing things, that’s the best day. I go home with a smile,” Agassi says.

Success is not without compromise, however. Agassi says he spends less time with his wife and two sons than he would like. “That’s the biggest penalty I get for what I do. “

But the task at hand is too important for him to ignore. “NetWeaver is bigger than Windows 95 in the scope and size of what we’re building. How many opportunities in life do you have to put out a system like that?”