IBM could unlock bank vaults for Sybase

Sybase Inc.’s strategic partnership with IBM to offer its Adaptive Server Enterprise Linux database on Big Blue’s eServer OpenPower systems could help open the doors of Canadian financial institutions to Sybase.

While U.S. analysts suggest the announcement will help push IBM’s server solutions into U.S. financial institutions, as IBM can tap into the solid presence Sybase has in Wall Street trading and banking houses, one analyst at IDC Canada Ltd. said Sybase will use the deal to do the same in Canada.

Jamie Sharp, vice-president of customer segments with IDC in Toronto, said Sybase is not a significant presence in Canadian banks, but that the partnership could change that. Sybase would be able to leverage IBM’s significant presence among Canadian banks to push its Adaptive Server Enterprise, using IBM’s server platform as a way to get a foot in the door.

“If anything, this is a gift for Sybase,” said Sharp. “IBM is the de-facto vendor in Canadian financial services as they have significant presence in all of the big five institutions. So this helps Sybase more than it does IBM as IBM is already the incumbent in Canadian financial services.”

According to David Jacobson, senior director of product marketing for data management and tools with Sybase in Dublin, Calif., Sybase is the number-one database solution provider in New York’s capital markets. Sixty-eight per cent of all U.S. stock trades are done on Sybase systems.

“So this announcement with IBM gives us that much additional reach into other regions such as Canada,” Jacobson added.

The partnership will include support and management services for Sybase under the IBM Global Services group along with joint marketing and sales programs to be rolled out by both companies in 2005.

Jacobson said Linux is making significant inroads among financial institutions, which are looking toward Linux-based solutions to help reduce overall IT costs.

“One of the principle ways that our customers have found to reduce IT costs has been to move away from proprietary systems, like Microsoft NT or proprietary Unix systems, and to move to open Linux systems,” Jacobson said.

Charles King, principle analyst and president of Pund-IT in Hayward, Calif. said the announcement also lets IBM promote its concept of server consolidation. OpenPower is made to consolidate the workloads of some 10 traditional servers onto a single processor, thereby cutting the number of servers a company needs to deploy. Companies in the financial services sector are now moving to consolidating server deployments to save money and using Linux to further reduce that overall IT cost.

“This is going to be pretty valuable to these big financial installations that have traditionally deployed hundreds or even thousands of small Sun boxes,” King added.

According to Cambridge, Mass.-based Forrester Research, the Linux database software market will increase to US$400 million in 2004 and to US$1 billion in 2007.

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