On December 20, 2002, Sybase announced that it will buy AvantGo, a provider of mobile enterprise software, for US$38 million in cash. Sybase intends to operate AvantGo as part of its iAnywhere Solutions unit. Sybase expects to complete the acquisition in 1Q03.
Sybase will pay a considerable price (US$38 million) to enter AvantGo’s business-to-consumer (B2C) mobile niche since AvantGo’s chief B2C channel is mainly indirect – through its partnership with Microsoft for support of consumer applications. AvantGo’s sluggish sales – lingering at about US$5 million per quarter due to deferred enterprise spending on mobile applications – likely accelerated the need for this deal, despite AvantGo’s technology delivering data to more than seven million mobile data users every day.
In integrating AvantGo’s mobile Web technology with its own iAnywhere data synchronization and mobile database technology, Sybase must quickly undertake server software development to produce scalable enterprise solutions. Gartner doesn’t foresee this happening until 3Q03 at the soonest, especially since Sybase must make strategic decisions in sorting out its long-term relationships with other mobile middleware players such as XcelleNet and Synchrologic, which provide mobile middleware components. However, AvantGo’s expertise in pushing data to customer relationship management and other applications via thin clients should enable Sybase to address the following enterprises:
– Those that deploy thinner, less costly devices (such as smart phones and wireless PDAs) that will use third-generation (3G) and 2.5G wireless WANs for connectivity
– Those eager to hold down the total cost of ownership of mobile applications, which Gartner forecasts will climb by 30 per cent in 2003 for most enterprises
– Enterprises using AvantGo for consumer applications should assess whether a new integrated offering will scale adequately to thin devices while minimizing network usage. Enterprises that paired AvantGo with database synchronization (from vendors such as Synchrologic) must determine whether to upgrade to iAnywhere’s database solution or instead swap out their solution in the next generation.
Analytical Source: Bill Clark, Gartner Research
Recommended Reading and Related Research
“Mobile Application Platforms” – Mobile projects in 2003 will continue to be dominated by tactical considerations and focused on vertical applications. By Ken Dulaney and William Clark
“Wireless Application Gateway MQ: Tactics Trump Strategy” – Enterprises should assess and use wireless application gateway platforms for tactical, targeted business-to-business applications. By Peter Lowber, Ken Dulaney and Simon Hayward
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