UPDATE 1-Germany's SAP to make McDermott sole CEO from 2014
* SAP says co-CEO Snabe to move to supervisory board
* Move due in May 2014, leaving McDermott as sole CEO
* Shares fall 1.3 percent, underperform market
FRANKFURT, July 22 (Reuters) - German software maker SAP AG said co-Chief Executive Jim Hagemann Snabe would move to the company's supervisory board next May, unexpectedly leaving co-chief Bill McDermott alone at the helm.
The news, announced late on Sunday, comes after Snabe defended the company's dual leadership structure as recently as early July in a newspaper interview, and follows a management revamp only two months ago.
Snabe, 47, said he was stepping down from management after a 20-year career at SAP, including three years as co-CEO, for personal reasons and had no plans to take on a management position at another company.
Snabe and McDermott took the helm of SAP in February 2010, with contracts that were due to run until 2017.
"We have done great things since then, got through the global economic crisis and jointly with the employees and the management board made SAP a highly innovative and profitable company again," Snabe told Frankfurter Allgemeine Zeitung in an interview published on the paper's website on Monday.
In May, SAP said it was revamping its management to sharpen its focus on cloud computing as demand for the service which saves clients money grows. Also, its finance chief Werner Brandt is due to leave when his contract ends in June 2014.
"The news is a bit negative, there is a lot of reshuffling on the board," Commerzbank analyst Thomas Becker said.
Shares in SAP were down 1.3 percent to 55.00 euros by 0800 GMT on Monday, the second-biggest fall on Germany's blue-chip DAX index, which was flat.
The news comes only days after SAP trimmed its sales outlook for this year, warning a slowdown in China was prompting firms across Asia to put investments on hold.
It also shifts the focus of SAP to the United States. Snabe was based at the company's headquarters in the German town of Walldorf near Heidelberg, while McDermott's main office is at SAP's North American centre in Newtown Square, Pennsylvania.
Hasso Plattner, co-founder of SAP and chairman of the supervisory board, has criticised the company's management for failing to boost SAP's popularity among young talent.
"That needs to change as quickly as possible. We have fantastic new products but are not on par with Google or Apple," he said in an interview published by German magazine Wirtschaftswoche on July 8.
In SAP's statement on Sunday, Plattner said Snabe and McDermott had exceeded his expectations for profitable growth.
"Now I can look to bring Jim's experience and energy to the SAP supervisory board, and be sure SAP is firmly in the hands of a visionary leader with Bill as sole CEO," Plattner said.
DZ Bank analyst Harald Schnitzer said he did not expect a major change to SAP's strategy as Snabe will still have some influence from his new position on the supervisory board.
SAP said the proposal for Snabe to move to the supervisory board must have the support of at least 25 percent of shareholders at the company's annual general meeting next May.