SAP to acquire again?

In my last piece outlining initial thoughts around SAP’s acquisition of Sybase I kept returning to the question of middleware, integration, BPM, in-flight analytics and the future of enterprise software. Given I’ve been immersed in TIBCO’s TUCON, that should be no surprise.

I’ll run a recap on TUCON in my next piece but suffice to say that this ‘invisible company‘ now has to be an attractive near term acquisition target for SAP. In past speculation I’ve said it could be a marriage made in hell. Things change in three years.

Also see:

SAP announces $5.8 billion acquisition of Sybase
SAP acquires Sybase for $5.8 billion, but why?
Dana Gardner: SAP buys Sybase, gets back in the race
SAP acquires Sybase: Mobility and database options
SAP: More company news and full coverage

Prior to the announcement I mentioned to colleagues that it cannot be by accident that SAP’s name kept turning up in customer stories, in asides and that Vishal Sikka was slated to be on the keynote roster. We now know the reason for his absence but even so, Walldorf’s perfume was very much in the air.

You would not expect TIBCO to respond to my inferred questions around independence and having the opportunity to converse with TIBCO’s CEO, I could not let the opportunity pass without asking the question about it continuing to develop the technologies it has as an independent entity. His response on the video was benign but cordial: “We will always do what’s best for the shareholders.” I’d expected a more robust response given the company’s past in this regard. Be that as it may.

Elsewhere, TIBCO executives hinted at a deepening relationship with SAP on strategic projects it could not discuss. That is the first time in five years that I have heard TIBCO talk in such positive terms about a company that quite frankly shafted them some years back - albeit under a different SAP management. The outcome then saw SAP making the decision to use webMethods as its integration partner of choice. I always felt that was a decision motivated by great marketing on the part of webMethods rather than any technical assessment that made sense to me. As it turned out, the decision was made more comfortable by webMethods falling into the hands of SAG, a long term and important SAP partner.

Recent management changes at SAP designed to provide an image makeover and herald a change in style may give the company cause for reflection and a re-evaluation of its relationship with TIBCO. I have long felt that TIBCO and SAP are the right partnership for the companies they serve. I am not alone in that thinking and I notice today that Dana Gardner resurrects the question about whether TIBCO (among others) can remain as a stand alone unit. But then there are plenty who consider the idea barking mad.

Both companies have a glittering showcase of Global 2000 customers yet neither company has truly capitalised on those relationships. The Sybase acquisition changes that equation in my opinion. Here’s why:

• SAP has run out of new things to say to its large installed customer base that are sufficiently compelling to make further and enhanced investments worthwhile. Edge deals are the best it will get.
• SAP/Sybase opens up the FSI market for SAP in ways that were not otherwise possible. The combination is more attractive to buyers but even then, SAP is unlikely to get more than a small piece of the potential pie. TIBCO on the other hand has a long and distinguished history in this market and can offer SAP the opportunity to build on the in-memory story while complementing its BusinessObject reporting tools with real-time analytics offered by Spotfire.
• In presentation after presentation, TIBCO customers talk about the kind of sustainable breakthrough innovations that make them winners. These are almost always about custom development. I was particularly struck by the passion with which Southwest Airlines couples its customer centric mantra with business values out to applications that support its goals. All these are enabled by TIBCO technology. Massive telcos like Reliance in India (who - says a reader?) onboarding one million customers a month and telling the audience they didn’t think TIBCO could provide the capabilities they needed but they did it anyway through co-innovation, speaks volumes for customer relationships. Indeed I detected a warmth towards TIBCO from customers as almost all who presented had some small and amusing anecdote to relate. SAP would benefit from that style of relationship.
• On the other hand TIBCO cannot scale its applications building capability. It isn’t large enough and doesn’t have the channel. tibbr is potentially the springboard for thousands of value driving applications on a platform that makes a lot more sense than SAP Streamwork. SAP on the other hand is in the process of revamping its channel and could provide the conduit for helping TIBCO productise and proliferate easily consumed applications across multiple channels (think any device, anywhere with Sybase as a potential enabler.) Given also that Craig Cmehil is on an innovation hunt, he could park himself outside TIBCO offices in Palo Alto and watch what happens.
• Sandy Kemsley was highly complementary about TIBCO’s BPM story which I suspect is now far superior to that which SAP can offer. BPM is an ongoing issue for SAP as it tries to deepen its relationship with customers. If Sandy says its good, then you can take it as high praise from one of the most respected practitioners in this market. Could TIBCO solve SAP’s BPM issues?
• As always in deals, it is almost always a management fit decision. This is where the ‘gotchas’ come bite you in the rear end. I’ve met Vivek Ranadivé on a few occasions and find him to be a quiet yet strong person. He’s spent many years building his company and despite TIBCO being ‘last man standing’ in the integration/middleware space, Vivek has built a $700 million revenue company. Some might say against the odds. The company has the potential to become a monster player but its Achilles Heel has always been a lack of marketing visibility. Vivek acknowledges that and recognises the changes required. Whether he can execute is an open question but the fact Spotfire exists as a semi-autonomous operating unit speaks volumes to his understanding when to take a hands off approach. Interestingly, SAP is proposing a similar style with Sybase. SAP’s marketing is nothing to shout about but it can show TIBCO how to leverage communities. This is massively important if you want to proliferate great stories around executed innovation. More important, TIBCO and SAP share a similar ‘geek’ ethos. They’re both stuffed full of brilliant engineers who I am sure would relish the idea of sharing code. TIBCO and SAP’s current in-memory passions would go down as exciting frontier stuff in massively scalable environments. In talking to TIBCO executives, it is clear there is a great deal of mutual respect and a particular liking for Vishal Sikka as a technical CTO who knows his stuff. Given all those factors, anything is possible.

Whether I’m blowing smoke up my own tailpipe or not, the case for bringing the two companies together following the Sybase acquisition is - at least in my opinion - compelling. Whether it becomes a reality can only be known to those signing the acquisition checks and whether my assessment is somewhere around right or miles off the mark.