McDermott said there has been a "structural change in the IT industry. There’s a move away from investing in hardware and expensive services and a move towards business software."
That may sound like a dig at competitor and frequent legal opponent Oracle's CEO Larry Ellison, but the SAP co-CEO said, "I respect him as a competitor and I respect him as a businessman. He's gone for a different strategy. They obviously have gone more for a consolidation play, and that's a fair play."
Still, he said, "we have gone a different way. We think we have to to innovate the future instead of consolidate the past."
He was effusive in his praise of Virginia Rometty, the incoming CEO of International Business Machines. "We've been working together for a decade now. She has a great personality with customers. Her partners trust her and I believe that she's highly respected" within IBM .
McDermott did not comment on a company statement earlier Wednesday on a possible buyback of SAP shares.
Reuters contributed to this report.