R "Ray" Wang
R "Ray" WangNews Analysis: SAP Bets On Innovation With $5.8B Sybase Acquisition
Move Signal Seriousness To Acquire Key Innovation Driven Technologies
SAP announces a $5.8B acquisition of Emeryville, CA, based Sybase. The acquired entity will remain a stand alone company. At first customers, prospects, and casual observers will wonder why SAP has agreed to acquire what is perceived as an aging, legacy database company. However, industry watchers will realize the fit in technology innovation for three main reasons:
- Sybase is a leader in mobile platforms. Over the past decade, Sybase has transformed its company to succeed and lead in the mobile space and has extended its BI and analytics capabilities. Sybase delivers the complete value chain in managing, analyzing, and mobilizing information. A key solution is Sybase's Uwired Platform, which provides a mobile development platform, supports heterogeneous deployments on most devices and operating systems, extends back end data, and ensures security and mobility management. Sybase also brings strong capabilities with real time decision support, predictive analytics, dynamic reporting, and high performance BI.
Point of View (POV): SAP and Sybase already cemented their partnership at CeBIT. Enabling SAP CRM to work on mobile devices with ease, put some life back in the staid SAP CRM product. The ability to deliver the same capabilities in the rest of the Business Suite will help SAP achieve a key part of its innovation strategy in mobile. On the analytics and BI front, SAP will need to provide a clear road map on how the analytics integration will work with the BOBJ teams and NetWeaver architecture. Customers will want a road map on 90 day, 180 day, and 1 year integration milestones.
- Massive data volumes require in-memory databases for rapid access. Sybase brings a high performance in-memory database (IMDB) to the table. The proliferation of information, devices, and delivery platforms require reduced response times. Sybase delivers an integrated approach to IMDB. The offering shares the same SQL language, drivers, and admin tools. The result - limited code changes, reduced bugs, and quicker time to market.
Point of View (POV): IMDBs represent a key component in both future on-premise based applications and SaaS/Cloud based applications. While SAP had an offering called Max DB, the product did not appeal to financial services and insurance customers who remained skeptical on its application in massive workloads. However, Sybase has proven itself with its IMDB offerings and financial services pedigree. Another key reason for moving to IMDB - SAP resells an estimated $1B of Oracle Database every year. (Clarification 5/14/2010: The SAP install base buys $1B in Oracle databases every year.) Any effort to stop funding SAP's largest competitor is a proactive and perfect reason to move to IMDB.
- Cloud technologies bring SAP into the future. Sybase has built a strong relationship with Amazon's Elastic Compute Cloud (EC2), storage, and virtualization vendors required to support cloud technologies. Sybase products for mission critical data management, embedded and mobile database, column based analytics, and data movement and synchronization already work in the Cloud.
POV: SAP can take advantage of the advances made from the Sybase team to support both private and public cloud environments. The private cloud capabilities deliver a must have requirement to meet strict European privacy laws and mitigate concerns of public sector customers. Sybase is unique in being able to provide the same database management technologies in both the private and public cloud.
The Bottom Line - Sybase Brings Three Critical Technologies Required For Next Gen Apps And More
SAP has broken its promise of no more big acquisitions after the BusinessObjects deal. However, these acquisitions make sense toward the path of next generation applications. Mobile, cloud, in-memory provide the tools required to support the 10 elements of next generation applications. More importantly, they also gain access to the financial services and public sector markets. On the geographic front, Sybase has strong presence in the China market, an area where SAP sees future growth.
Your POV.
Are you a Sybase customer? Are you an SAP customer? How do you feel about the acquisition? Will you have more confidence in SAP's ability to innovate after this acquisition? Does this allay your feels on SAP innovation? You can post or send on to rwang0 at gmail dot com or r at softwaresinsider dot org and we’ll keep your anonymity or better yet, join the community!
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Related resources and links
- 20100512 MarketWatch - John Letzing "Sybase shares surge on SAP buyout reports"
- 20100512 IDG News Service - Chris Kanaracus "SAP to buy Sybase for $5.8B in all cash deal"
- 20100512 Bloomberg Business Week - Rochelle Garner, Joseph Galante and Ian King "SAP to Buy Sybase for $5.8 Billion to Vie With Oracle"
- 20100512 ZDNet: IrregularEnterprise - Dennis Howlett "SAP acquires Sybase for $5.8 billion, but why?"
- 20100513 TechQQ - 责任编辑 "SAP 宣布58亿美元收购Sybase 溢价幅度达56%"
- 20100512 Wall Street Journal - Ben Worthen and Justin Sheck "SAP Buys Sybase for $5.8 Billion"
- 20100512 ZDNet: Between The Lines - Sam Diaz "SAP announces $5.8 billion acquisition of Sybase"
- 20100512 Merv's Market Strategies For IT Suppliers - Merv Adrian "SAP - Sybase: Synergies. Suspect So?
- 20100513 GigaOm - Om Malik "Analysis: Why SAP Bought Sybase For $5.8 Billion"
- 20100513 People Over Process - Michael Cote "Acqiuiring, everyone's doing it - SAP buying Sybase - Quick Analysis"
- 20100513 Observations From Hong Kong - Alan Tan "Software Arms Race Continues"
- 20100513 TMCnet - Alice Straight "SAP AG and Sybase Inc. to merge"
- 20100513 IDG News Service - Chris Kanaracus " What Sybase Customers Should Expect From SAP"
- 20100514 Wall Street Journal - Ben Worthen "SAP Other Tech Firms Vie To Add Product Lines"
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