SAP / Sybase - The Real Attraction

SAP & Sybase - the subtleties you might have missed on today's press conference
Written by Brian Sommer, Contributor on

SAP / Sybase Press Conference August 19, 2010

SAP just wrapped up a press conference that offered a few additional insights into their recent Sybase acquisition and how it will fit in with the SAP product roadmap. The meeting focused on three areas:

- Development of an EIM SDK – the two companies will create a SDK (solution developers kit) for enterprise information management within 9 months. This will permit third parties to create mobile apps quickly and will ease the ability of mobile apps to connect with SAP applications and the data within them.

- Separate but increasingly inter-related operations between the two businesses – Sybase will continue to operate as a standalone business for now. The company has different economic buyers than SAP and has more developed customer relationships with some customers, particularly in China.

- Business analytics – This is really the gem of the deal and the one that didn’t get much air time at the event. Sadly, a demo of this failed to launch. Here is where SAP sees the opportunity to help businesses crunch massive amounts of data in in-core memory resident databases. Businesses would like the ability to quickly process non-accounting data, like weather forecasts, to better know how to stock stores, staff and schedule its personnel, etc. This isn’t accounting or transaction data but a different kind of business information that needs different kinds of IT hardware and software to process. SAP already had two in-core technologies (one from Business Objects) and now has other resources to draw upon from Sybase. Mass data crunching will change the way people think about Business Intelligence and analytics; however, I think the power behind these concepts got short shrift at this event.

It appeared that SAP management understands the new frontier for business applications but had a bit of a struggle articulating it well. By discussing short-term operational tactics (e.g., will the sales operations of the two firms be integrated) diluted the real power of the deal and today's announcements.

SAP execs also took some thinly veiled pot-shots at competitors. It was clear that they believe that vendors that make acquisitions of other software vendors for their install base are missing the boat when it comes to making a more strategic acquisition that brings the potential for long-term product line innovation. The former brings an acquirer instant revenue growth but the latter helps build long-term value for the vendor and its customers.

Another executive made it a point that the new SAP management team is global and collaborative and not command & control focused. This, he explained, permitted more innovation. I'll leave it to your imagination as to what competitor this is addressing.

The long-term aspects of this marriage will require SAP and Sybase finding new non-accounting applications that consume large amounts of sensory, econometric, competitive, scientific and other data. That information will need to be processed in a non-linear manner for businesses to gain competitive and operational advantages. I believe they'll need to create a whole new language around these new kinds of capabilities, technologies and solutions. Watching all this unfold in the next few years should be interesting as some of these new concepts will not be extensions to pre-existing business processes but all new ways of doing business.

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