Dealing with Russia causes internal discussions

SAP

Must SAP use its influence to increase pressure on Russia? Many employees ask themselves that.

(Photo: imago/photothek)

Dusseldorf After Russia’s attack on Ukraine, SAP boss Christian Klein published an emotional message: The war was “inhuman and unjustified,” he wrote in a blog entry. The software manufacturer supports the international sanctions – and will stop doing business in Russia.

Two days later, however, the group added: Existing customers would continue to be served “within the scope of the contractual obligations”, at least insofar as sanctions and export controls allow this. The cloud services from SAP will therefore continue to be used.

This decision has sparked debate among parts of the workforce. In internal forums, the board around CEO Christian Klein was confronted with the question of whether SAP should withdraw completely from Russia, even if the sanctions do not currently require it.

The considerations that numerous international corporations are currently having to make have particularly far-reaching consequences for software manufacturers and cloud service providers: They provide the technical infrastructure of the economy with which companies connect machines and control supply chains, reach customers and pay employees.

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Classic licensed software runs locally. However, the manufacturers provide updates to close security gaps or reflect legal innovations. They also offer support for technical problems. Without this – usually expensive – maintenance, problems can arise over time.

The influence of cloud services is even greater: they run entirely in the data centers of IT companies. If they terminate the business relationship, customers will no longer have access within a short period of time. So far, however, the Russian economy has been hesitant to use the cloud.

Management refers to valid contracts

Can? Yes. But doesn’t SAP have to use this influence to increase the pressure on Russia? Some employees see it that way. They refer to the group’s ethics guidelines, which postulate, among other things, the observance of human rights in their own business activities and along the value chain.

SAP CEO Christian Klein

The CEO’s management discusses with employees in internal forums.

(Photo: dpa)

In the internal discussion, however, the management around CEO Klein points out that the Russian companies have valid contracts. In addition, one argument goes, ending the business relationship could have undesirable side effects, in Russia and beyond.

Customers include, for example, hospital operators and drug manufacturers who are essential for supplying the population, as well as food manufacturers and energy companies who also deliver abroad. In response to a Handelsblatt request, SAP referred to the blog entry by CEO Klein.

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The economic importance of the Russian market may have been part of the considerations. In the 2019 annual report, SAP reported unconsolidated sales of 483 million euros for the subsidiary serving Russia and the former Soviet Union. More recent figures are not available. According to earlier company reports, customers include corporations such as Aeroflot and Sberbank.

Microsoft, IBM and others also remain present

Other software manufacturers also refrain from a complete withdrawal. Microsoft has announced that it will stop selling new products and services, but – unlike SAP – has not commented on business with existing customers.

You can read between the lines: it keeps going. Further measures will be taken “if the situation develops,” said Microsoft President Brad Smith.

For Amazon Web Services and IBM, the picture appears to be similar, but the companies’ communications are sparse. Google Cloud has not yet commented. How sensitive the topic is can be seen in Oracle: The IT group announced via Twitter at the beginning of March that it would end work in Russia, but did not give any details when asked and later deleted the tweet.

The Internet service provider Cloudflare, on the other hand, is aggressive in its presence in Russia. “An arbitrary termination of service would do little harm to the Russian government, but it would limit access to information outside the country and make those who have used us as a shield to criticize the government far more vulnerable,” CEO Matthew Prince said in a statement Blog entry.

More: More and more companies are giving up business in Russia

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