Why Sybase was worth $6 billion to SAP
SAP attracted to Sybase's early experience in mobile and strong Oracle rivalry
By John Gallant and Eric Knorr | Network World US | Published: 17:08, 03 June 2010
Few companies get a chance at a second life. When John Chen signed on as CEO of Sybase in 1998, the database software vendor was, in Chen's own words, "a very, very dead company." Once a strong competitor to Oracle, Sybase had lost its way, in part because it missed the opportunity to enter the enterprise application market Oracle now leads.
Over the next decade, through the efforts of Chen and his team, Sybase turned around and reinvented itself as an enabler of the "unwired enterprise." Then, in mid-May, enterprise software giant SAP offered to aquire Sybase, citing Sybase's leadership in both mobile and in real-time analytics.
Since the merger announcement, Sybase has not granted interviews to the press. But in March, before rumours about the merger began circulating, John Gallant, chief content officer for IDG, and Eric Knorr, editor in chief of InfoWorld, sat down with Chen for an hour-long chat as part of the IDG Enterprise CEO Interview Series. The interview explored how Chen was able to rescue Sybase from the brink and establish the company as a key mobile enterprise player. This abbreviated version of the interview focuses on the company's mobile business and insights. To hear the complete interview, which goes much more in-depth on Sybase's history and analytics business, listen to the interview in its entirety via Network World's podcast: .
Gallant: You've got a pretty interesting and diverse product set. You have the database, analytics, mobile management tools, and mobile tools that are pretty widely deployed among the service providers. Help us understand how all of those different technologies fit into one cohesive strategy that makes Sybase unique.
Chen: Sybase traditionally has been an infrastructure software provider to the enterprise. We started as a client-server database company and then moved into development tool sets when we acquired PowerSoft.
And after I came on board, we continued to develop our database. Gradually, we positioned ourselves in high-growth areas, like analytics, mobile middleware, and mobile services. And how we envision that it all comes together is that we believe mobile enterprise computing is going to be the next really big thing. If you think that e-commerce was a big sea change in the early 2000s, m-commerce will make e-commerce a very small thing. M-commerce reaches almost the majority of 6 billion people around the world.
Knorr: What characterises an enterprise mobile service as opposed to a consumer service?
Chen: Applications must talk to applications; machines must talk to machines. There has to be intelligence gathering, mobile analytics, real-time reporting, all these things. We could be a leader in providing those kinds of infrastructures. It starts with back-end infrastructure in a data centre to people sitting here with a device.
When you talk about the database, there are many aspects of it. An OLTP database sitting underneath applications and collecting records. That's a database. Data warehousing, analytics. That's a database. A database could be an embedded persistent store in the field, like if you're driving a truck, with a FedEx machine, or in US Navy or Army deployment units - they have on-board computers. That's an embedded database. So to us a database doesn't really conjure up the image of a dark room and lights blinking. It's that plus many, many things.
And we really do believe in [a mobile] persistent store. Five years ago, that was a laughable subject, because there wasn't enough capacity, there wasn't enough battery to sustain it. Well, five years have gone by and things have changed quite a bit. Things like the iPad are coming out. Who knows what the next two generations of the iPad are going to be like? I mean, this is not only an Apple story. How does an enterprise take advantage of all these technologies? How do we manage these things? What about security concerns, about who's going to use what to see what? And how do we build intelligence in?
I'm holding a device. I'm as good as what you tell me, right? Well, how do I know what you want, at what time? You can go on Amazon.com and it remembers the history of your preferences and tells you what you ought to be buying next. That's just the beginning. You have to be able to deliver that information in a remote way. And all these applications, they have to be able to talk to each other agnostically.
You may have an iPhone and somebody else has a BlackBerry and somebody else has an iPad. Somebody else is staring at a TV; somebody else is looking at the voice-over-IP devices on my desk from Cisco. How does that all come together? Unified communication is the software architecture that's going to bring it through. We'd like to be a participant in that. And that's why we invest in messaging; that's why we invest in how to channel content. That's why we invest in how you manage devices; that's why we invest in all the encrypting of that information that goes over the airwaves. And that's why we invest in analytics, and that's how it ties back to what our core strength has been.
Gallant: That's quite a mouthful. How do you roll all that together?
Chen: To us, this is the unwired enterprise concept: Having a layer of architecture that translates to products and services that people can actually deploy and employ. Not the entire stack, a layer of the stack. You could use my analytics engine over an Oracle database. You could put my services engine over any other company's engine, maintaining an open heterogeneous computing environment, which was the principle of Sybase to start with. So that's how it all ties in.
Knorr: You led the company into the mobile space very early. What did you see that other people weren't seeing?
Chen: I knew we were going to get to that. That has a little bit to do with history. Most other CEOs will claim that they're visionary. The fact of the matter is that we backed into it somewhat, and to be really honest, we didn't have another choice. Because in the e-world, we lost it.
When I took over this company, we were behind in various technologies, not only in the e-world. We made our college effort trying to get there; we had our app server. But by that time, we were the seventh app server in the universe, where WebSphere and WebLogic already had 75 percent of the market. So you can't rebuild a company based on that.
You have to have something that you are uniquely qualified to do. I always ask the question -- what is our right to be a company?
We didn't have applications, like ERP and MRP. That was before my time. We decided not to go there. It turned out to be a near-fatal mistake. And when I came in, the e-world was big. Everybody's IPO'ing their business plan and everybody's making millions and Sybase had deteriorating revenue and was losing money and all that.
Fortunately, we had a good installed base and a good loyal set of customers. And they were questioning our survivability; so were a lot of people. So I knew [I had to] be making money and stabilising the troops and stabilising the customers [who said]: "OK, you guys are going to be in business, I'll take my time moving away from you."