Hi everybody. I'm Nicola Tangan, the CEO of the Norwegian Sovereign Wealth Fund and today I'm in really good company with Christian Klein, the CEO of the software giant SAP. Now SAP is now the largest company in Europe, third largest software company in the world and we own just under 3% of the company, $9 billion equivalent to 100 billion Norwegian croner or 20,000 croner per Norwegian. So it's a very big and important position for us. Christian started as a student intern in SAP like 20 years ago. He became the CEO. Wow, what a journey. Christian.

Yeah, but you see my quay has first of all now just to get a feel for the importance of SAP. How much of the world's business touches an SAP system? Yeah, Nikolai, first of all, thanks for the trust into SAP and indeed it was a remarkable journey the last four years, but of course you you feel you know the that you know a lot of the world's transactions are relying on SAP systems and now especially with the cloud I mean clients are very serious about you know how do we want their most mission critical systems and to your question 80% of the world's you know B2B transactions one and touching an SAP system wow how much of the largest companies how many of the largest companies in the world actually 95% use one or the other SAP system many of them finance supply chain obviously but we have HR I mean we have probably in the SAS space the broadest portfolio in our industry it's so unbelievable.

Now for the people who don't know what uh ERP is what so stands for enterprise resource planning system what what kind of things are you involved with I mean there's a lot of talk about digital transformation these days and just you know to maybe illustrate a bit what is the role of an EIP because EIP often times sounds like back office but it's not at all back office you know at the end of the day this morning I had a big you know car manufacturer and they actually want to offer you know mobility as a service in the future so they need to change their license model their pricing model they also want to you know improve delivery times and that is all connected to their EIP yeah the way how you quote the way how you price the way how you manufacture deliver I mean that is all part of an ERP and then we even go to the front line Yeah, with commerce and with our CX portfolio. So, it's really covering the value chain, the mission critical part of each value chain of a company. And here comes also my passion. Yeah, it's it's a piece of technology, Nikolai. But at the end, what it does, it connects business. It actually wants business processes. And that is actually the fascination what is so special about SAP. We are wanting the world's most mission critical business processes.

Now, one of the reasons why I love SAP is because you're so integrated in people's businesses. Yes. Yes, it's not it's not you can just change your system. So, how often do you lose a client? Okay. And not very often and indeed. Yeah. I mean, but I don't like it when we talk about a lock in of customers in SAP. I mean, they they want to see the value. I mean, first of all, and when we talk to Apple, when we talk about, you know, the their portfolio, I mean, they really also challenge us from time to time. They say, "Hey, we also have to, you know, squeeze for further productivity. How can we automate our supply chain?" And they also then offer new solutions. They want to offer new license modules. So it's it's very important that we also follow you know what our customers you know need for their transformation. And of course when you are running a mission critical business Nikolai I mean you don't change your EIP you know every year. So it's indeed a very sticky business but it's also an earned business.

But how does it but how much work does it involve to get it installed? Yeah. See I mean that is of course depends how many Yeah. I mean depends on the size and what kind of business you're running. I mean there of course you know when you talk you know about 100 warehouses in the world or factories I mean this is complex business. Yeah. To run manufacturing to run logistics that takes a bit longer but just you know because you also need to involve the business and then implement you know the software all over the world. When we talk about HR about finance you can have really fast go lives. Yeah. And then it of also depends on the size of the customers. I mean we have also SAP is known for you know large enterprises ERPs but we also having actually 80% of our customers are mid-market customers and there when you actually adhere to our template our best practices you can also have go live in three to four weeks absolutely possible if you adhere to the standard if you want to apply the best practices you don't want to configure that much then actually you know SAP is also very agile.

But companies often also change the way they work right and the logistical systems when they introduce your software. Yes. How does that work? I mean that is actually the part why we also said four years ago we are not only doing a transformation into the cloud. I mean at the end we are wanting mission critical businesses and we want to start with the end users and for them a transformation is a change of the way how they work and the the way how the the company operates and that's why we said let's also focus on not only implementing our technology but also let's focus on the change management start with the end user. they do a piece of work today like that. How will this work look to tomorrow? What kind of automation can we bring in so that the end user can focus on more value adding task? I mean this is you know what SAP does with our clients so that they also maximize the value not only it wise but also business-wise.

You say you don't um look at it as if you are locking in the customer but I mean they are quite uh what should we say they are very dependent on you. Mhm. How do you think about your ability to increase prices? Just how do you how do you weigh that? I mean first um you know the way how we do our pricing. I mean first of all we look at the piece of technology. I mean AI is a great example. We have a consumption based pricing module. We look into you know what does this AI use case do? How many transactions can you automate? You know how faster can you actually quote? How much more intelligent will your pricing be? How much better can you optimize your inventory? Then we define the output the outcome and then you know the customers can actually calculate you know what does it cost but they also see then the outcome in terms of more automation more productivity more intelligence in the way how they run their business and that is the correlation and then on inflation obviously a big other topic we want to treat our customers very fairly we said look there is a a maximum price increase which is very fair but it also can be lower in case you know inflation is is lower. So we actually do this in my eyes in a very fair manner and so that customers also see they have also a kind of price protection with SAP.

Are there any verticals which you haven't really addressed enough yet? I mean actually we won 25 industries and the horizontal layer is actually often times really SAP and then of course in many industries we also go into deep verticalization. I mean just last week I had a Scottish utilities company here. We talk about the metering how to better you know improve asset management for the grids. So there we have also deep verticalization in our in our portfolio. Same for retail when it comes about customer loyalty management, returns claims management. These are the the the verticals we provide and we provide actually a lot of vertical applications and but also customers and partners also can build extensions on our platform because you need data oftent times from the ERP be it supply chain finance data order data customer data and then customers say hey I also want to build my own IP okay here we go you have the our platform called BP there's our data model our identity so you can natively integrate and then you can also build your own vertical solutions also possible.

One of the things we've seen more of lately is technological nationalism. Mhm. What what are the issues here for you? Yeah, I mean these days Yeah, it's big. And um you know, tariffs, um you know, protection and new sovereignity, you know, laws and obviously for us, I mean, running businesses in almost over 140 countries. I mean, that is our commitment to our clients. No matter if you do you know business in China, in the US, in Europe, in Southeast Asia, everywhere, we will adhere to to local laws and not only local tax requirements, but also sovereign clouds. So we building now a lot of sovereign clouds um you know based of course on local laws about data security, who's touching the data, data sovereignity, where does the data will be located and that's part of the business I mean and that becomes of course now these days more and more important.

Are you seeing more demand now as European companies want to have a European alternative to some of the large US providers? Yeah, I mean I I see signs for that. Um people customers asking, hey, when this continues, you know, how safe is my data when it goes to the east, when it goes to the west? So they are asking definitely, hey SAP, uh can we also localize our data more and more in Europe even, you know, in nonregulated industries? I mean in the public sector in the regulated industries sovereign cloud was always a big part yeah of the business but also now we see it more and more non-regulated business not that you know customers now suddenly shifting systems already around but you see you know there's the risk is increasing so there's also some uncertainty around that topic absolutely.

Now you sit in the middle of kind of the global supply chain here is there enough agility and flexibility to cope with all these changes in supply chains tariffs inflation all these things. Uh I mean yeah absolutely I mean the tech you know especially in the cloud I mean we deliver you know new releases in the cloud you know every quarter if the customer wants every year but so we can deliver fast innovation. We can also adjust you know our software to adhere to any kind of tariffs you know now which are coming up in every place in the world. The point is of course what we would love to see as a tech company but I'm not only talking about SAP is of course you know to have you know a bigger you know sovereignity across Europe. Yeah not having soenity in each you know member state but really you know having it across Europe because that makes it you know easier to scale and that makes it also easier to do business with and will that happen you think I'm not so optimistic. I mean the point is you know it's same like you know in in a in a private company. Yeah, you need to give up power for the sake of you know for the benefit of the of the bigger union and you know it's it's not always so easy to convince every member state to give up power and say look I actually you know remove my own sovereignity requirements for the sake of having you know one European sovereignity requirement and that that is of but I feel this is of course key not only for for SAP we are doing business everywhere we have our labs everywhere but for the startups I mean you They need scale. They need they need to fast time to value and they need to scale fast and for them of course that would be very very important.

How do you um work with data privacy and cyber security? I mean it's totally key. I mean that would probably one of the worst things that that could happen if you got some malware really integrated into your systems. Yeah. And I mean it's part of of all of our contracts with the customers. they have clear SLAs on you know on what happens in case there are vulnerabilities. We of course invest you know billions of R&D money into cyber I mean it's actually for us a corporate requirement and there are clear also SLAs and requirements inside SAP so we take this very serious we have the even you know in the board regular checkups so that the organization feels there's no compromise around cyber security but what I always tell my customers about is when you look at SAP or our hyperscala partners I mean we are putting a a big firewall around the whole technical stack. I mean as a midsize company somewhere here in Germany or in Europe or everywhere in the world. I mean it's hard to deal you know with this you know fast developments on cyber. So I would say the cloud is another good reason now to say for cyber I want to move to the cloud. I give this you know topic also in the hands of big technology companies to secure my data to secure my system.

Just seems like the attack surface is getting bigger and bigger as everything is digitalized, right? And you and you have new type of enemies. Yeah, you have a new you know bad actors. You you actually the threats are increasing. I mean we see it clearly. I mean you know and that is you know the B2B data especially in some industries is is very mission critical. So yes you you have to absolutely make sure that you have a secure landscape up and running.

Now if you look at history u Amazon uh kind of invented cloud computing. Why why wasn't it SAP? Yeah, Nikolai, that's a good question. I mean, um, look, the good piece is now you see it in our numbers. We are there, we are super successful. I would say we have the fastest grows in the SAS space. But the point is, of course, you know, why didn't we see it, you know, 15, 20 years ago. I mean, there's a a good book about the invaders dilemma. I said there's a lot of truth into it. Yeah. You have a well-run traditional business model. it delivers good quotes growth, good profits and and you don't realize hey how fast can the market change actually and then to to tell you know your customers to tell your employees and even you know worse sometimes to tell the capital markets to say hey I going to disrupt my own business module and I'm you know building now a diff different business model in parallel which costs probably a lot of money you know it's not that easy.

For a moment where you realized you needed to change. I mean for me I mean it was pretty clear already when we acquired a lot of you know cloud products. It was clear that the market is is changing and for me I mean personally I always thought hey we need to bet even more on the cloud. I mean you see you know where the customers is going and and so it was for me very clear in 2019 when I became the co-CEO of the company that we have to double down on our cloud transformation. Absolutely. I mean nicolai we are have 50,000 developers they are coding great stuff every day a lot of AI use cases are really good stuff but what does it help when you are sitting on an 8-year-old release and you're looking into a screen which is you know probably you know still touched you know by one of our founders yeah so that is that that is the problem yeah the innovation gap is too big and we are coding a lot of new capabilities for business model transformation resiliency in supply chain we have a green ledger you know You can use a queen ledger to not only guessing about carbon emissions but also having actuals and you need to reduce this this gap. Yeah. You between you know the customers say here the latest release is there and and the answer and the solution to that is cloud.

Sure. But it's a tough decision to make right because you do kind of you take a hit on when it comes to the share price and all that kind of things right. Yeah. I mean look I mean SAP had in 20078 we had a company you know 100% owned SAP SAP hosting so some people here somewhere you know realized there is something coming maybe customers want to outsource their IT systems to the cloud and then we sold it what I figured out later is you know the margin was not that high as in our traditional business it was actually you know not helping quarter by quarter but then you know to the courage to say you know what we go out to the capital markets and say you know we have our traditional business so to say more our cash cow and then plus but we invest into a new business model I mean that is of course never easy and then look at SEP the last four years when you would ask now the people here there's a lot of change also in the way how they work day day over day the way how we incentivize them the way how we measure success I mean everything is changing it's a nice piece of strategy paper but then to get the strategy executed is you know often times yeah the biggest challenge.

How do you think quantum computing will change the way you work? um quantum I mean definitely we're doing a research that for example take supply chain yeah when it comes about logistics optimization yeah it's very very complex you need a lot of computing power yeah to to simulate you know logistical chains you know how to bring a product A from product B there millions of you know value drivers who influence your logistical supply chain and that is of course you know one use case where we definitely see it will be a big gamecher if we can you know use quantum yeah in the case of in the context of our supply chain portfolio finance blockchain is of course you know one another thing um but you know these are the the early use cases and you know when I'm talking to our researchers they actually would say now in three to four years I mean the the technology should be that mature that we really can apply it in the context of our portfolio of our products.

Why haven't companies gotten more productivity out of software in the past yeah that's a good piece. I mean when I before I became the the CEO um I asked of course I was running here the IT organization and I got presented a business case I moved to S forana I said oh great idea but what does it do to our business what does it do our transformation but it was purely planned as a technical migration oh there's a next ERP let's just technically migrate I said what is now you know changing for the benefit of our SAS module I mean we won the company still as a onremise company in many business processes. So for me I guess it's very important that the customers understand when you are running an ERP project or let's take AI you always have to have the business at the table when you're coming in here and you talk about ERP and there are only IT people around the around the table I would question will the customers see the the maximum value of course it can benefit of decreasing the cost of running such a system there is of course also a TCO game in that but it's very very important that you connect you know the technology with the business and this is where companies struggle the most with how to do it, how to integrate the business. Is the business really open for that kind of change? Is the business open for automation for standardization or is you know actually has everyone the freedom to do whatever they want in a in a in a commodity business. That is often times the challenges in such software projects.

Let's move to AI. Um, what excites you the most with AI? The possibilities, the opportunities, what you can do with this technology. I mean, I see it always in the context of our customers business. And I just had, you know, yesterday a big, you know, French retailer here and they do millions of changes to orders. Yeah. They change orders every day because consumers, you know, actually, you know, do a change of what they order. They do a lot of order changes in the supply in the supplier space. And now when you can see how you can automate that. Yeah, with AI I mean for them it's like a big productivity booster. So if you if you look at the possibilities here uh and so from if you were to try to rank them what are kind of the most amazing things you're seeing here starting from the biggest the biggest changes over the next three to five years the biggest changes is actually in the context of SAP and AI is definitely on the analytic space. I mean you you today you going to figure out you know your own planning simulations. you're figuring out how does my supply chain planning work in context with the demand which is coming and when you see now how AI and all these algorithms will work and now you can not only bring business data in but also a lot of other content in I mean that makes of course you know financial planning supply chain planning workforce planning I mean will be absolutely moved to a completely different level uh so in the work of intelligence the way how these plans are integrated and of course how you then at the end can optimize and run your business.

Or take another example on the supply chain side. I mean a lot of our customers spend billions of of dollars on asset management. Yeah. So predictive maintenance for assets is something which will be of course hugely impacted by generative AI but also traditional AI. So that is definitely an area for uptime of machines, uptime of factories. I mean it's absolutely a big potential there with AI. Yeah. To actually drive further productivity for a company. So these are some of the use cases we are driving on and then talking about you know the stuff which is coming now on a chendic I mean how often did I sit in front of an SAP system you know analyzing you know our the payments over to you and then you put the finance data out oh over to you and then what is actually the problem of this customer why why is the customer not paying then you can talk to sales you can talk to logistics you can have maybe a commercial issue and when you look now at Chantic AI you can actually tell the system, you know what, give me all payments overdue, the top 20 or top 100, but then not only give me this report, give me why is what is the root cause? Why is this customer not paying? Is there an sales issue? Is there a logistical issue? Did we deliver too late? Or is it a commercial issue? And then when you think about that, you know, what kind of answer do you get back? And recommendations about what kind of actions you should actually take. I mean, this is remarkable.

I mean there you know actually today a lot of humans being not only spend time but probably not always figuring out a wide you know call to action and that is now what agendic will do. There's a finance agent, there's a logistical agent, there's a supply chain agent and they will collaborate with each other and they have so much more data you know in the you know in their mind in their when will you have a true identic AI where actually the first one we already shipped that is about you know the services and the services agents we have yeah when you're sitting in a in a call center and you need to give advice uh to a customer about are the assets you know actually available what is the issue of an asset that is already shipped and Now we will launch at Sapphire we will launch 10 more agent agentic AI use cases and I mean is the big exhibition. Yes exactly which is coming in May.

Yeah on average across your client base how much do you think this can drive productivity? I mean our promise to our clients this year will be every end user who's working with our AI so our digital assistant tool with the embedded I use cases yeah we can actually drive productivity up to by 30%. 30%. Yeah, I mean what across the whole company or you have to it's not only a marketing claim. No, but is that just for this function or is it across the company? It's actually across the company. Yeah. When you are touching SAP software what are the big what are the big things this year which are going to drive 30% productivity gain.

I mean it really depends on you know you can take HR take HR. Yeah. You actually when you're an HR business partner you you you need to hire you need to retain you need to hire the right skills you need to retain the right people. You actually need to bring make sure that the learnings are connected yeah to the skills of the people. What what are the learning gaps and that is you know somewhat something what an HR agent will do for you. Job postings done based on you know a lot of insights where is the skill gap in the company what kind of skills do I need? when you then put trainings together or goal setting that will be taken over by HR agent. Obviously an HR business partner will have to say yes that is the wide learning journey for this kind of job profile but at the end you know in in the past they had to type they had to search what is the wide learnings for them. Now an HR agent is doing this for them and then they can confirm it if if it fits you know to their expectations. In finance when you are in FPNA I mean you put a lot of data out of BW you're doing financial simulations how you going to end the year what is the sales pipeline how can it influence my topline I mean there is a finance and a sales agent now doing this for you.

When is uh aentic AI going to be so good that we don't need SAP actually I mean I would say um you know at the end you need business software I mean when you look at you And I know there was a lot of talk about you know is SAS still relevant when AI is broadcasting. I would say SAS is value relevant because at the end every AI use case needs data needs the business context. I mean sorry to say I have no imagination maybe someone out there has how we could deliver our AI in the context of the business without our apps. I need a business context. I need a context of the business process. I need a semantical data structure of the customer. I mean it's not like you know that you can just implement an large language model from any kind of render uh and then say okay I'm now having you know AI working for my business. No large language model on this globe understands business data has access to business data understands the business context and that's why we are saying yes we use the LLMs for the unstructured content for you know actually for speech to text but at the end what it really is the differentiator for us is our AI foundation who understands the businesses the business processes and the business data.

So when we have made this new great uh genetic AI Mhm. And we are putting this model in charge of running SAP. Uh what part is it that you would be happy to see go and what part would you absolutely keep yourself? Um I mean first I mean obviously I mean our overarching goal is to deliver more value. If the customer delivers more value I have a belief they will rely more on SAP software to run their business. And obviously what we want to shrink and reduce and remove is the time to implement the software. Yeah. The time what part what part of your job do you think is a bit dull? My job. Yeah. I mean look at the end of the day I mean I I still believe there are human beings who are making decisions. Yeah. Who will you know I mean I'm traveling the world. I'm visiting customers, partners, investors. And I still believe that is you know something what human beings and my co has to do. But what will be of course you know much less is when I'm getting prepped for my earnings when I'm getting prepped you know for a conference etc. I mean a lot of that will be highly automated. So what is it that you look forward to not doing in this year? Me personally yeah I mean what I'm not doing is in in the past you know I'm still know our products. I still know our solutions. So sometimes I go in and look into goals. I look into learnings. I look into financial numbers. So I'm able to really access our finance solutions still and in what I'm not doing anymore is typing in a lot of transactions uh to get the information I would like to get out of our system. So I'm an end user of SAP software as well and that is of course I'm using jewel I'm using a lot of AI and I see you know by myself how I also will get more productive. Yeah, just this morning I looked into our P&L. I cannot talk about our earnings, but I wanted to see where we stand and when I looked at how I did it in the past and how I'm doing it today. I'm not only getting a P&L report with one mouse click or actually with one, you know, talking to Jewel, please give me my Q1 P&L. I can also say give me a prediction about, you know, what is our current cloud backloings we did, etc. So that is, you know, of course, more intelligent and way more automated. Yeah, also for me as a CEO now.

Uh many private companies are uh doing well here. What about governments and public sectors across Europe for instance? Yeah. What's this what's the what's the scope here? Yeah. I mean you know when you look at Germany or France I mean there is not a question anymore should we go cloud they all convinced about cloud. They all want to use AI. they see you know also for the citizens the all the citizen services you know you can actually digitize a lot and you can actually make this also m make the citizens more happy with embedded AI now they of course have way more regulations on you know what what what does happen with the data they have you know clear very clear sovereign cloud requirements and so we investing yeah we have deos here in Germany we have in in France we have together with cup gemini Microsoft we have blue so we They're building these sovereign clouds to also then say hey but now you know every government every public sector agency can also then you know do business and run their business with SAP in the cloud.

Is there a real willingness amongst public sector to rationalize? Yeah, look, I mean sometimes I see there's some, you know, um, of course they they are a bit more risk averse. Um, and of course, you know, when you want to digitize a certain agency, you are touching, you know, usually thousands of end users and when something goes wrong, you get criticized. The problem here is when everything goes right, usually no one talks about that. And then you know sometimes I see you know governments you know politicians getting a little bit shy or whisker worse to make those decisions just you know because when you stay on the status quo everything stays like it is and I cannot get criticized the problem is every stays everything also stays very bureaucratic very manual so but we see now that it's moving but clearly the public sector is definitely not a front runner when it comes to digitization. Yeah. No no I mean the safest way not to make mistakes is not to do anything right.

What is work going to look like in 10 years time? In 10 years time um look I I really believe that um when you when you look at no matter in a company which function you want to take I would say people can be way more focused on you know on building great strategy how is my industry transforming but really not so much into anymore you know going into you know data analytics etc. I mean there will be a lot you know what will be done by AI or software to really supplement you know your strategy work way more and the same is true for you know as I said before on finance or HR there's still today a lot of you know manual transactions documents which you need to screen a lot of bureaucracy you you have to deal with and I'm totally convinced a lot of that will be taken out and will allow HR business partner to think more about hey what is the the workforce I need in 5 years from now, how will my skills change? And a lot will be done, you know, in the back by software and AI.

What about the situation with humanoids and and robots? So, I I met this um robotic company uh earlier in the week. I'm just amazed by how soon they will be all over the place. Yeah. What how is this going to impact society? I mean, the impact is there already today. I mean I have seen warehouses in China and other places in the world where 95% of the work in a warehouse is done by robots and I mean that is already you know today changing and that will continue I mean also the way how you maintain factories how you maintain machines will be completely automated also by AI not only robots and so your workforce will change I mean even at SAP look at SAP I mean we actually have today a profile of a developer so we will still have many developers also in 5 years from now but the skill profile of a developer will change a lot. Yeah. So the way how we code the way how we will deliver software will radically change. So it's very important for every company to also think about okay this is my workforce here and today but also how does my workforce need to transform skill-wise and what kind of jobs do I need and which kind of jobs will will do I won't need anymore in the future.

Europe how is Europe doing? Yeah, I mean I I mean look I would say still Europe has a lot of strengths but you know these days I would say Europe is not very competitive. I mean you see I mean look at Germany our economy is clearly suffering other economies are doing still better but I would say Europe is you know losing a lot of trends just not being by being not a union. Yeah, at the end of the day we you know you need a market a common market for banking union for digitization for for infrastructure and and and the point is yeah when you look at the US when you look at China I mean when you bundle your power you know you also then you know have better chances yeah when it comes to competition not only in IT or tech it's also about banking it's about retail etc and this is something where I feel the union is just not a union and that in my eyes clearly has to change and there's too much regulation.

I mean you know tell tell me about digital information act. The digital information. Yeah. The point is yeah I mean we are not against for example the AI act. I guess AI clearly needs a framework for regulation. The point is only you have the AI act on Europe but you still have the den in Germany. Yeah. So another you know clause around where you where it's defined how data needs to be protected you know how do we deal with consumer data and so you know you have a new act on EU level but you still have you know different you know acts also then on in the member states and then you're adding one layer on top of another layer and that is of course not contributing you know to reduce bureaucracy you're adding more bureaucracy and that makes also that the ease of doing business is getting harder not easier and that is the kind of problem what we have in what are the implications the the implication when you sign a contract today around you know with with a European company and you embed AI into into the solution and then finally into a commercial contract. I mean you have you need way more lawyers. Yeah. You need a lot of lawyers. You need lawyers who understand local law but then you need lawyers understanding European law. And that just shows I guess very well you know the the the the difficulty of doing business in in in Europe and when you are signing a contract in the US you know there's first of all much less regulation but there are not different regulations state by state and I mean Nikolai we here in Europe in the last two years we had to double the size you know of our of our legal department just to how big is your legal department now here in in Europe I I have to check but it's probably around you know 150 people only for commercial for contract you know compliance checks are we compliant is everything in the contract right and of course customers have a lot of questions around how do we do AI can help you with that eventually yeah actually you you are actually saying something which is also very true when you see we do all the refract checks is done by AI first there's still a revenue accountant who is then looking at the contract finally but there is a lot of refract checks compliance checks which we are doing with AI still you get every time new regulation so the bureaucracy is also increasing.

Related question why are there so few tech companies in Europe I mean my big belief is when I think the number is what three out of the top 50 in the world and you're the number one that's why that's right I mean look it's of course about you know I mean you know this better than I do about you know is there enough people funds and willing to take some risk and you know and fund you know some early startups but I would say money is not um the main issue we're having here in Europe.

I mean take for example SAP there was actually you know five people who did a job and they found hey I'm doing the same task all over again and they had first of all the courage to say you know I'm going out of a well- paid job and I found SAP then they had to find you know people who finance them. That wasn't by far not easy. They got a lot of, you know, nos from many banks here in the region. And then last but not least, they had an idea, but then also they had to execute. So they had the courage once again not only to do business here in Germany, but they also then risked, you know, to to go to the US and in other places in the world. And so when I look at this today and why is this happening so often in the US and not in Germany when you look at in the Silicon Valley and uh I mean there's often a talk why are there so many you know successful tech companies in this in the Silicon Valley I see there is a piece there is great research there are great universities but there are also great companies and you know when you see this in combination you have great tech new tech coming you see it you see it very early especially in the Silicon Valley there are a lot smart people figuring out where is the technology going to, what are the techn technological trends but then you also have real world problems and when you then bring this together business research and universities this is you know where great ideas you know are born and then you of course have to have the money to execute and have to have people who are willing to finance you know this new idea this startup yeah to scale and that is of course also the ecosystem there which makes it very very special and here in Europe I mean look at that.

If you build now a startup in Germany, I mean you have a certain size of a market but then when you want to do business in France or in Belgium or another or Norway, you know there are different regulations. You actually have to build a different legal entity and that is time and money what it costs you and that is not good. Yeah. And that that's why I would say there are a lot of good reasons to then to go to the US and found your startup there before you doing it in Europe. Absolutely.

So against this really difficult backdrop which you just painted. Yes. If you were to distill down why has SAP been so successful? I would say first of all five founders who had a great idea and second to always have the courage to transform. I mean there were many many situations in SEP's history when you know the CEOs or back then the founders wouldn't have you know the willingness to disrupt their own business model their own technology. SAP would have been yesterday's company. So it's also about this constant transformation, this willingness to disrupt your own traditional business model and to move on.

Moving on to leadership. So you um became the CEO before you turned 40. It's quite extraordinary. How was that? I mean I look at my career at SAP and I feel this is the strength of SAP. I mean I started here as a student. Um and um and since then I always had first of all people mentors who actually you know gave me a lot of knowledge who actually gave me a platform to quot my career and they gave me a lot of trust and responsibility. I had my first team here at SEP with seven people when I was you know 26 27 others are still at the university and then you know I had the the opportunity not to only see one part of SAP. I mean we have here a big internal job market. So the the ability to rotate and seeing different parts of the business is absolutely there and that helped me a lot to not only have great mentors but also then to learn business end to end and then look at my time at success factors. I was moving from here to um San Mateo in in San Francisco and I was able to help last back in the days to one success factors end to end. I mean I learned so much yeah from you know closing deals doing marketing into delivering software and also then making sure the customers are adopting the software and that was for me of course you know better than every you know learning course at the university I saw real life how such a company has to work and then of course with my career you know really seeing different parts of the company when I'm sitting here today as a CEO I see sometimes green lights you know in certain meetings and I can still judge hm Is this maybe too green or should this not be more orange? And I don't like orange. So, let's go to wet. It's green or wet. We have a problem or not? And and so I have, I guess, the ability to charge, of course, not always to the deepest level, but I have the ability to judge, you know, are we going in the right direction and are the pieces really fitting together so that it works end to end.

How um was it to lead uh people who were a lot older than you when you were so young? Actually, I didn't think so much about it. I always, you know, wanted to convince people about, you know, leadership, about making decisions. Um, also convince them about, you know, with knowledge and expertise and and also, you know, always, you know, be there to also help them. Yeah. To do that job better. And I guess when people feel that there is someone who understands the business who is also helping me you know in my own career helping me you know to move on I guess then you also you know create you know the acceptance you need and then I guess age doesn't matter so much and here at SAP I would say we also have that kind of culture that it's not a matter of age it's really about you know your own performance but also the way how you adhere to our values and be able to work in a team because here everything you know once in projects. There are not so many job profiles here at SAP where you do where you are an individual contributor. A lot of is happening in teams in projects.

Who have been your important mentors? I mean uh early in the days I mean there was of course uh the the person who hired me who gave me you know um you know a great platform to to learn but then also to said at one day he said hey why don't you go to this executive board member and present your stuff by yourself and not me presenting it you know go there and I give you the platform you know to really show how how good you are and what kind of work you're doing and that helped a lot and then I was of Of course with G Oswald, he was a long-standing board member here. He teached me a lot about, you know, not so much care about so much internal stuff, but really focus on customers. He was responsible for service and support. So I learned it the hard way also how missionritical our software is. And he always told me, Christian, no matter if you're in finance and service and support, always understand our products and our customers business. Then I had last Algard um you know as um you know CEO of success factor who founded this beautiful company. I had Jim Sna completely different personality. He was running development. So I was running deaf operations for him. So I learned a lot about you know how to connect business with technology was very important. And then I guess the most important time in my career was when Bill McDermad asked me to become the chief operating officer. And because um four CEOs before all failed and I said to Bill, you know, Bill, I don't want to be the fifth one failing here. I want to still build a great career at SAP. Can you do me a favor? Um it is great, but I need businesses. I need business processes and I need data. Otherwise, you know, it is can only be, you know, less impactful, but I need, you know, the business systems and data. And so he gave me also then you know this opportunity to become the chief operating officer and there you know I learned how hard it is to transform a company. It's not only about tech and that's what I'm also now telling our customers today as a CEO. I said hey SAP can be way more for you than only implementing a new tech a new solution a new ERP. We need to be part of your business transformation because then the tech can unfold immense value. AI can unfold immense value.

You can buy a yacht or a lot of AI. You have a big problem now. Who do you approach? Who do you ask? Actually when I have a big problem now I mean I have my executive board colleagues and which I trust a lot and you know many of them I really ask for an advice be you know Sebastian Stein as head of strategy is now our CEO. I go to him and then we have a cup of coffee and think about you know the strategy strategy to execution what does work well what does not work so well and then the same is with with my other all all other bot colleagues I'm the one who and what about outside the company who do you outside of the company I would still say I have a good relationship still to last you know a former mentor I have um you know a lot of coaches who also help me on you know how to deal with complex topics how to do problem solving etc so I have a few people there and then of course you know when you talk to Saja Nadella when you talk to Shondanu from Adobe etc. I mean we talk about business just doing a little plug here we have had them both on the on the podcast so so the listeners should especially when I became you know I was 38 when I became the CEO I mean often times I at where we especially at the beginning I asked them for advice I said they are they are both uh Indian is there something with the Indian leadership that you admire or try to replicate? M look I mean what I see in both of these gentlemen I see that Satya and Chandanu first of all understand the business inside out Satya also started his career at Microsoft very early and when I talk to him I mean he understands you know product commercials where's the market going to he has a super creative mindset on how to bring all of these pieces together but they're also quite humble right they're also quite humble yes indeed and I would actually say this is also very important As I also tell the people here, I mean it's great about the share price but at the end you know next day you have to deserve you know the the white to actually you know serve your customers better and that is you know at the end this humbleness what you need to not only become successful but also to stay successful.

Is there such a thing as a German leadership style? Um I would say you know the Germans when I look at the German leadership style I mean we have our processes we have regulations. Am I now a typical German? I mean I sometimes you know try to ask to get bureaucracy out. Yeah. But I see this as a typical German thing which is on one thing as strengths. Yeah. when it comes to you know organizing supply chain one supply chain one manufacturing you need to have this you know kind of passion for the details but you also need to be careful that you are not overregulating so much yeah there is there is somewhere a borderline which you shouldn't cross because then your strengths can also become your biggest weakness.

What have you learned from being on the board of Adidas with our fellow Norwegian oh yes yes yes um he's also a humble guy And uh what I what I when I look at Bern I mean he he wants to be close to his retailers. He wants to be close to the people wanting the supply chain. And I guess that is what a CEO is also about to not sit at the top in your ivory tower and you know see this is my strategy and uh so but really coming down and say hey what are the needs you know of my different stakeholders and then act based on those. And then the second based on Adidas it's a different industry but of course you know marketing brand heat you know matters a lot and that is of course certain things what I can also take out for for SAP despite we are different industry supply chains co it was very interesting how adidas build a very resilient supply chain and how can tech can help so out of this mandate I also take a lot of you know input for our technology on to how to help you know such companies to one even better with our technology because you are sitting in the board and you see you know what is working well and where do they need help.

Why do some cos have execution power? Why do some people get things done? You mentioned that you were number five you know in a particular job and you you managed to do it. Yeah, I would say um you know people when you would ask people you know surrounding me, they would probably say Christian can be sometimes a bit impatient and wants to do decisions sometimes maybe a bit too fast but I'm more acting and managing based on the principle I rather do you know 10 decisions a day and eight are great and two are wrong and I'm the last person who says you know what this decision was absolutely not great by Christian let's revert this decision it was not good so I you know let's course correct it but then I get something done and at the end of the day when I leave and go to home I the thing what I don't hate what I really hate is I was sitting in 10 steering committee spend the whole day here in Waldorf and I have to feel I got nothing done do you micromanage I micromanage you know that is a point yeah which I got you know a lot of blame for in my early years I have have to You know when I micromanage, I micromanage when I feel things are not going well. Yes. Then Christian can really go deep and want to understand the problem. But is this now necessarily a bad thing? But I also have to tell you things which are one in crate. I'm actually so happy to also cancel a meeting that said you know what today we don't have to talk about that because it's one and I see it in the numbers the facts the customers everyone is telling me fantastic. So you know you I give you some time back. You rather focus on other stuff. you don't have to spend the time with me.

How do you give feedback? Are you a straight feedback giver? Yeah. But this is a is a big big risk in this job. I sometimes feel people you know have so much respect. Yeah. They are we actually you know concerned about giving you open feedback and so sometimes I sit in meetings I said hey you don't have to be so polite and saying only so many polish things to me. Tell me are you agree with me or not? And if you don't agree it's absolutely right but please tell it to me now because now we are making a very important decision and it's absolutely fair to say no the CEO maybe you know has you know a different opinion than I and so I constantly also first of all challenge myself to you know to come across as you know please give me this feedback and not running into a meeting and speak up you know first and then dominating the whole meeting because then you can you know wonder why you're not getting feedback but it's not surprise but then also you know encouraging others to speak up and I guess this is very very important that you facilitate that kind of culture.

What's the part of uh SAP corporate culture which you try to change yeah there's a lot of talk these days about performance management and um there's a lot of talk about you know indeed this micro micromanagement and giving more freedom to our people and I guess it got a lot better but you know the thing what I want to actually facilitate especially you know here in in in in Germany in Europe is I mean you know you can always say around you know what is good or bad around you know US labor laws and so on I don't even want to go there but I'm actually convinced that in order to stay at the top of an industry and be a market leader you need a kind of performance culture and performance culture is not about every year kicking 10% of the people out it's about you know what I'm as a manager need to be able to sit here together with you and give you constructive feedback about what was great and what was not so great because in my career especially the things which were not so great helped me to get better. I mean how often did chimna tell me you know what Christian in this meeting first I didn't feel very well prepared there was a certain piece missing and also the way how you argumented you didn't come straight to the point and I said oh yeah I felt the same now but now that you're saying to me it's good now I can go back and think about it and do it better next time but this ability is got a little bit lost and that is something what I want to facilitate so this performance feedback this connotation to Oh, do we want to get rid of people? No, no, no, no. I'm a big believer that performance culture is first of all matters for your high performers so that they see when they walk the extra mile and perform that they really feel rewarded. But it's also for the people who are still new in a job that they have the ability to get better. And of course, it's also then a thing that you also understand, hey, SAP is really looking for performance. It's also not okay for the rest of the team when you're just sitting around and you know doing your job uh you know in a in a way that you know you're just you know pulling the your task activities to others in the team. Yeah.

Do you think um the lack of um uh kind of compar competitive spirit and um performance culture? Do you think it's a function of where Europe is now? you know a bit more bureaucratic more rules more uh security safety it's not easy to implement in in this part of the world right I absolutely do I mean look when I um I mean I see it you know actually also and when I look at my kids I mean do I always tell them don't climb up here the cherry tree no I mean climb up but you know I'm of course still watching but I'm not the one who says hey when you don't take any risks you know how does this further you in your career later when you take zero risk I'm I'm convinced you're also limiting yourself and I mean there's of course a topic like compliance you the compliance is super important you always should stay compliant but there's a big difference of not taking any kind of risk and I guess here in Europe I really feel we also need to educate especially already in in in school in the university that risk takingaking is absolutely something what you have to do in order to succeed yeah because you know when I look at my compet competitors around there. I mean of course every decision you do, every investment decision, every portfolio decision you do, there is some risk into it. I could sit here the whole day and say you know what we don't transform. Actually it's great SAP is you know here at a certain level we stop our transformation and we just stay where we are. That would be probably the way of where I would get, you know, much less resistance here and there, much less criticism, but it would be 100% the one thing for this company to just stay where we are because tech is moving fast, AI is moving fast. So, we have to continue to transform.

Question, how do you relax? Relax? Um, actually, I I love to ski. Uh, I really love to ski. I love the mountains. um both in even more in winter but also in the summer when you don't have always your mobile with you and that is for me great with the family with friends and then of course you know I have my sauna where I can you know do you know also spend a bit time for me I guess it's also very important I love the family but sometimes it's also to come down and to digest what happened in the day and to think a little bit broader about the world and everything what is happening on the geopolitical side that is also some time which is very very important for me to come down. So we interviewed 100 leaders you are the first one who mentioned a sona so perhaps perhaps you have a fin inside you or something because I I do sona you know probably five times a week I actually can almost compete with you on that one. Yeah. So I you know often times when I do my US calls in the evening uh and it's then around 9 10 in the evening I turn on the sound now not during the call but I already turn on the sona and then I hop in you know before I go to to to bed or you know I I'm I'm a big I'm I really really love it and it's a good way for me to come down and relax.

What do you read? What do I read? Uh I read a lot of you know of course you know business newspapers. I lead a lot of research. I love research. I sometimes tell my co, give me the latest research on knowledge graphs. Give me the latest re research on vector engines, etc. Because I'm now not the deepest technologist. But what I love about this research is what do you like about vector engines? But vector engines, I mean the point is when you look at, you know, AI and you need to, you know, have now structured and unstructured content. The power of AI is to bring those two together and the vector engine is actually a very very important piece in that under lastly.

What is your advice to young people? My advice to young people is um stay humble, never stop learning, be always curious. uh it's it's that is for me I mean in my career that was really really important and then at the end yeah you also understand that you know when you want to build a great career and you you know want to come in a position where you have you know also higher in the wanks you know also you know hard work and I mean that's also part of the truth you need to you know deliver outcomes but you also have to also be open and and honest to yourself that it also requires that it's not a 9 to5 job. Yeah. Well, Christian, you clearly worked very hard and I would say you have stayed surprisingly humble given that you're a young person running the biggest company in Europe. Well done. Thanks a lot, Nikolai. Yeah, thanks a lot.