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Sybase acquisition extends SAP footprint in APAC

With acquisition of Sybase, market share for the German enterprise software maker's database software in region will grow and provide SAP the opportunity to cross-sell, say analysts.
Written by Liau Yun Qing on

SAP's acquisition of Sybase will gain the German software maker market share in the Asia-Pacific database software market, as well as boost its presence in verticals such as healthcare and finance solutions, said analysts.

In a Wednesday announcement, SAP said it plans to buy Sybase for US$5.8 billion.

"Assuming the acquisition closes, SAP would gain automatic entry into the top five chart in the region's database software market," said Sharon Tan, research manager, information management and analytics software, domain research group at IDC Asia-Pacific.

Apart from immediately increasing market share for SAP in the region, Dane Anderson, CEO of Springboard Research, noted that Sybase has had a strong presence in pockets of markets such as China's financial services market, and can provide a boost for SAP.

With Sybase's existing markets, IDC's Tan said SAP will be able to cross-sell its applications.

Praveen Sengar, research manager, enterprise application software, domain research group at IDC Asia-Pacific, added that SAP will be able to leapfrog into in-memory database technologies and mobility solutions. Sybase had been championing the notion of "unwired enterprise".

"In light of key enterprises' need to extend enterprise applications to Web and real-time data access and analytics, [the acquisition of Sybase] will strengthen SAP's position in the market," he said.

As both firms had jointly collaborated on developing a customer relation management mobile solution for smartphones, Tan said: "There's already some experience that can be drawn upon for new product development and go-to-market strategies."

SAP will also be able to compete well with Oracle, as well as strengthen its future plans to provide database as an integrated part of the applications stack in the long run, said Sengar.

Benefits from the acquisition will not go solely to SAP. According to Anderson, SAP's more robust operational presence and extensive approach will provide Sybase with a stronger platform to grow its presence in the region.

The acquisition does have its risk, noted Anderson, adding that the premium is high. SAP's acquisition is calculated to be at a 44 percent premium to Sybase's average trading price for the past three months, said reports.

There is also risk of alienating other database providers. However, Anderson believes SAP will continue to support clients using Oracle, IBM and Microsoft databases.

"Moreover, SAP's position in the market and centrality to many companies' computing environments make it highly unlikely that any of its existing external database partners can choose to stop partnering with SAP," he added.

When contacted, Sybase declined to comment on the announcement but pointed to SAP's Web site for more information.

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