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SAP co-CEO Christian Klein: There's a need to retrain tech workers

Brian Sozzi
Editor-at-Large

SAP’s new co-CEO Christian Klein is ready to start tackling two big goals in 2020.

Both of them won’t be achieved easily or overnight, but measurable progress this year is attainable. Klein — appointed to his new role alongside long-time colleague Jennifer Morgan in October 2019 — told Yahoo Finance in an interview at the World Economic Forum in Davos he will stress the need for tech up-skilling in his various meetings at the gathering.

The need to retrain workers is paramount to unleashing tech’s full potential over the next decade (which many executives at WEF are calling The Fourth Industrial Revolution). Klein believes that training is critical when thinking about SAP’s future sales and profit potential. If workers are unable to use SAP’s new productivity tools to their maximum, companies could pullback on orders. In effect companies wouldn’t be earning a high return on their tech investment — so why speed through major tech transformations.

The data says Klein is on the mark with that assessment.

15 May 2019, Baden-Wuerttemberg, Mannheim: Luka Mucic (l-r), Chief Financial Officer, Stefan Ries, Chief Human Resources Officer, Adaire Fox-Martin, Global Customer Operations, Bill McDermott, Chief Executive Officer, Jennifer Morgan, Member of the Executive Board, Christian Klein, Chief Operating Officer, Jürgen Müller, Chief Technology Officer, and Michael Kleinemeier, SAP Digital Business Services, stand behind a corporate logo at SAP's Annual General Meeting. Photo: Uwe Anspach/dpa (Photo by Uwe Anspach/picture alliance via Getty Images)

According to a new report from chip supplier Intel, 36% of companies surveyed cite “technical skill gaps” prevent them from benefiting from their investment in tech. Meanwhile, 18% of companies reference handling data growth in amount and velocity, as well as sense-making as key employee challenges.

Triple cloud computing subs

As for Klein’s other mission this year, it’s to get closer to predecessor Bill McDermott’s ambitious 2023 guidance. SAP’s long-time CEO McDermott — who is now CEO at ServiceNow — said back in 2018 he wanted to triple cloud computing subscriptions, reach $35 billion in revenue and drive 7.5% to 10% compound annual growth in operating income by 2023. SAP’s market cap, if those items are achieved, could be $282 billion to $338 billion, per McDermott’s view.

Klein tells Yahoo Finance SAP remains on target with that guidance. Wall Street expects SAP to deliver $32.7 billion in sales this year. SAP’s market cap stands at $172.2 billion.

Watch Yahoo Finance’s full live network coverage of the 50th Annual World Economic Forum from January 21-24 here.

Brian Sozzi is an editor-at-large and co-anchor of The First Trade at Yahoo Finance. Watch The First Trade each day here at 9:00 a.m. ET. Follow Sozzi on Twitter @BrianSozzi and on LinkedIn.

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