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Lars Living Large

If you're done with the people-management realm, thanks for the memories, Lars. If not, I look forward to your next act.

June 7, 2013

What to make of the recent departure of Lars Dalgaard from SAP to venture capital firm Andreessen Horowitz?

Will the boisterous, bold and sometimes-bellicose founder of SuccessFactors give a shot in the arm to HR technology startups? Will his departure from SAP after about 18 months at the firm undermine the software giant's cloud computing strategy? Will Lars and his big personality leave the realm of people management software altogether?

It's hard to answer any of these questions quite yet. In the first place, Dalgaard isn't altogether abandoning SAP—the company to which he sold SuccessFactors for roughly $3.4 billion. He remains an adviser to SAP's cloud computing business one day a week.

Before acquiring Dalgaard and his talent management software firm, SAP took only halting steps into the cloud, also known as Software as a Service. Dalgaard clearly understood the market for delivering software over the Web. With Dalgaard leading SAP cloud computing efforts over the past year or so, the company's cloud software revenue has jumped dramatically. On the other hand, SAP's cloud strategy continues to be dogged by criticism.

So it's unclear what Dalgaard's career shift means for SAP. "SAP's movement into the cloud has been a rocky path. The departure of Dalgaard could be something bad, in that they lose even more momentum," writes David Linthicum, senior vice president of consulting firm Cloud Technology Partners. "Or, perhaps it's time that fresh eyes take a look at SAP's cloud computing strategy."

How about what Dalgaard, who is in his mid-40s, will do at Andreessen Horowitz? Will Dalgaard look to fund more startups like SuccessFactors, which helped make cloud-based talent management applications such as performance management priorities for organizations? That scenario seems unlikely. After all, Dalgaard never really identified as an HR or talent management guy. He dubbed SuccessFactors' products as "business execution" software.

Maybe, as my colleague Frank Kalman notes, Dalgaard is looking to his new investor role as a way to explore a wider variety of businesses. In fact, Silicon Valley-based Andreessen Horowitz (also known as "a16z") hasn't stood out for people management apps. Among its more famous investments are stakes in consumer technology companies such as Pinterest, Facebook and Lyft—the ride-sharing system where participating cars wear giant pink moustaches. Lars recently tweeted about how nifty it was to be in a Lyft ride in San Francisco:

"In my @lyft ride driving behind a @Zipcar on way to Sting concert - on Franklin 2 more Lyft cars this is hella cool."

Ben Horowitz of a16z told All Things D that Dalgaard will "have the freedom to look at a lot of categories." This includes the consumer products arena, given Dalgaard's background at consumer products conglomerate Unilever.

In explaining the decision to bring Dalgaard into a16z, Horowitz also portrayed the SuccessFactors founder as something close to a hero:

"Building a company isn't about business models and inflection points; it's about doing something larger than yourself. It's about working for each other. It's about being part of a team trying to make possible the impossible. It's about doing it in a way that no matter what the outcome, everyone was glad they were there."

That's going a bit far with Lars, it seems to me. I once interviewed a laid-off SuccessFactors employee who felt the company had been disrespectful to employees. The record indicates Dalgaard at times acted callously towards SuccessFactors workers, at one point framing what was effectively a lay off as performance-related firings.

But I do give Dalgaard credit for acknowledging less-than-ideal leadership surrounding job cuts. And for being a mover and shaker. For spicing up the HR software field with his larger-than-life personality.

Lars, if you're done with the people-management realm, thanks for the memories. If not, I look forward to your next act.

Ed Frauenheim is associate editorial director of Human Capital Media, the parent organization of Workforce. Comment below or email him at efrauenheim@workforce.com.