Sybase to buy AvantGo

Enterprise software company Sybase Inc. will buy AvantGo Inc., a maker of software for mobile devices, according to a statement released by Sybase.

The deal, for US$38 million cash, will add AvantGo’s technology to Sybase’s iAnywhere Solutions subsidiary and is expected to close in the first quarter of 2003, according to Sybase, which is in Dublin, California.

AvantGo, based in Hayward, California, makes client and server software that is used to link handheld devices to CRM (customer relationship management), SCM (supply chain management) products in addition to marketing and data synchronization applications.

Sybase’s iAnywhere Solutions subsidiary sells mobile, remote, embedded and workgroup databases and mobile middleware. iAnywhere’s SQL Anywhere Studio allows developers to create applications for mobile, remote, embedded and workgroup database software used in industries with large numbers of mobile workers such as transportation, utilities, health care and government.

The deal will help Sybase’s position in the market for mobile database software for enterprises, and expand the reach of Sybase’s iAnywhere technology into the wireless arena, Sybase said.

Following the completion of the acquisition, which must still be approved by AvantGo’s shareholders, Sybase plans to use AvantGo’s technology to expand the iAnywhere Solutions mobile database to Web developers and use its channel relationships to broaden the reach of AvantGo’s products, services and applications, Sybase said.

Sybase will retain the AvantGo brand, according to Terry Stepien, president of Sybase’s iAnywhere Solutions subsidiary.

“We think there’s very good value in the AvantGo brand. We’re going to keep that for AvantGo products, but extend the AvantGo products with iAnywhere’s technology,” Stepien said.

For example, AvantGo’s mobile sales application does not currently contain a database. In the future, that product will likely ship with the iAnywhere database included, Stepien said.

Sybase and iAnywhere will also continue AvantGo’s “My AvantGo” consumer service, which allows Web content such as information on cars or airline tickets to be downloaded and viewed offline on a handheld device.

Sybase has no plans to begin charging users for the My AvantGo service, but intends to use the free service, which has a base of more than 7 million mobile device users, as a channel to reach the mobile community with Sybase and AvantGo products.

Among other things, Sybase will offer technology and services that will enable companies to develop internal My AvantGo channels for use as private company portals for mobile device users, Stepien said.

Sybase will also look to expand the My AvantGo service in Europe, where mobile device use is ahead of the United States, Stepien said.

While not a perfect match, Sybase’s acquisition of AvantGo will give it a variety of new products and technologies that can be used to broaden its appeal to customers and application developers, said Ken Dulaney, vice president of mobile computing at Gartner Inc.

“(Sybase) got a good client side development piece, good middleware, tools to hook in to non-Sybase applications, and a nice portfolio of template applications for pharma(ceuticals) and field service,” Dulaney said.

AvantGo was an easy target for acquisition. After an initial public offering that raised US$66 million in September 2000, AvantGo struggled to achieve profitability. Its stock was delisted from the Nasdaq exchange in September of this year.

Sybase does not plan to lay off AvantGo employees. However, AvantGo’s staff will be asked to relocate from the company’s headquarters to Sybase’s home base, which are about 10 to 12 miles apart, Stepien said.

It is likely that a number of AvantGo executives will not make the move, however. Some of AvantGo’s senior staff have already said privately that they will not be a part of the merged company, Stepien said.

Stepien declined to name executives who have decided not to join Sybase.