Indian to head SAP s R and D division

German business software maker SAP said it was revamping its management to sharpen its focus on cloud computing as demand for the service which saves clients money grows.

SAP and rivals such as IBM and Oracle are dashing to meet surging demand for cloud computing, which allows clients to ditch bulky and costly servers for network-based software and storage in remote data centres.

The company said it was now grouping all of its development activities and putting executive board member Vishal Sikka in charge of them from June 1. It also named board member Gerhard Oswald to oversee its new HANA Enterprise Cloud product.

"In record time, we went from being a startup in the cloud to being one of the largest companies in the cloud," co-CEO Jim Hagemann Snabe said during a conference call.

SAP splashed out $7.7 billion last year to buy Ariba and SuccessFactors to push into the cloud computing market, which research firm Gartner has said is expected to grow 18.5% this year to $131 billion worldwide.

But it suffered a setback at the start of 2013, when top sales managers in Asia left, giving rivals an edge just as demand for cloud computing was on the rise.

The German company vowed last month to get its Asia-Pacific business back on track after the problems pushed its first-quarter earnings and revenue below expectations.

On Friday, it unexpectedly announced that Lars Dalgaard, the former SuccessFactors CEO who was widely expected to lead its cloud computing business, was leaving SAP to become an investor.

SAP said Dalgaard was stepping down from the management board and leaving the company effective June 1 but that he would continue to act as an adviser to its cloud business.

"We're not letting Lars go. He is still our strategic cloud adviser. We're not turning off his e-mail and he can keep his PC," co-chief executive Bill McDermott said.

Ariba CEO Bob Calderoni will now take on more responsibility for SAP's overall cloud business, though he has not been appointed to the executive board.

SAP just launched a cloud-based version of its HANA tool, which helps companies analyse large quantities of data quickly and competes with Oracle's new Exalytics product.