SAP-Sybase: What to expect in the first 90 days

Now that SAP’s roughly US$6 billion acquisition of Sybase has gained clearance from European regulators, it may not be long before the deal is finalized. With that in mind, users and partners of the companies have much to consider during the next few months, analysts say.

SAP will gain a comprehensive set of technologies for mobile applications through the Sybase purchase and has announced big plans for them. In fact, “mobility is the new desktop,” according to Co-CEO Bill McDermott.

But there are already questions about its mobile strategy that require answers, observers say.

For one, SAP needs to define the differences between its own Project Gateway and Sybase’s mobile platform, said Jon Reed, an independent analyst who closely tracks SAP.

The pending introduction of Sybase’s technology, coupled with only limited public information released about Gateway so far, “muddies the mix” for customers interested in building out a mobility strategy, Reed said.

Gateway appears to be aimed at supporting lighter-weight mobile applications, judging from remarks SAP CTO Vishal Sikka made during a Sapphire keynote. In less than two months, internal developers at SAP created more than 600 applications with the platform, he said.

Sybase’s platform could end up being positioned for heavier-duty uses, Reed said. Some clarity could come at the vendor’s upcoming Tech Ed conferences in October, he added.

Meanwhile, the competitive stakes will be raised for other enterprise mobility vendors, many of which already work with SAP.

Just about all of them are scrambling to make sure their applications are supported on Sybase said mobile analyst and consultant Kevin Benedict, founder of Netcentric Strategies.

Users can also expect these vendors to develop fleets of specialized applications targeting verticals within the SAP universe, in order to compete with ones SAP and Sybase are sure to develop, Benedict added.

While many companies have some type of mobile applications already deployed, if only e-mail, “100 percent of the industry” is still trying to define a broad-based strategy, according to Benedict. Therefore, it would be useful for SAP to lay out its plans for the next couple of years, he said.

Forrester Research analyst Paul Hamerman echoed Benedict.

“Customers don’t need to have these [applications] available overnight,” he said. “But in the next couple years, many kinds of business processes will start to migrate to untethered devices. SAP sees that and wants to position themselves to be able to ride that wave.”

Apart from mobility, it would also be helpful to customers if SAP indicated how quickly other Sybase technologies, such as its database, will be integrated with SAP’s software portfolio, Hamerman said. This is of lesser urgency, since SAP already supports a number of databases, he added.

However, SAP will also be gaining in-memory database technology via Sybase, noted Altimeter Group analyst Ray Wang. The market will be looking for details of how SAP’s own in-memory database, which received great fanfare at Sapphire, will work with Sybase’s product, he said.

Meanwhile, some typical problems involved with mergers don’t seem to be as severe in this case, analysts said.

For one, product overlaps are “less intense” compared to SAP’s last major purchase, Business Objects, Reed said.

The Business Objects deal also gave SAP valuable experience in the logistics of executing large acquisitions. Sybase will act as a separate division, according to SAP.

That said, Benedict expects Sybase will eventually be well-absorbed into the company. “SAP has no interest in using Sybase to mobilize Oracle. What they really want to do is mobilize all the components of SAP. The more they do that, the less separation is justified,” he said.

In the meantime, however, SAP must also juggle duties involved with the Sybase deal while keeping close watch on other strategic fronts, Reed noted.

The acquisition comes as SAP is revving up its SaaS (software as a service) strategy, which includes the midmarket ERP (enterprise resource planning) suite Business ByDesign and a separate line of applications meant to complement large enterprises’ on-premises systems.

“The more there is on your plate the harder it is do all of them well,” he said.

Overall, customers may be best served by a wait-and-see approach, according to another observer.

“I wouldn’t put much credibility into any details that come out early. Because the companies truly won’t know,” said Curt Monash of Monash Research. “Anything they say with much detail won’t be much more than an educated guess.”

It’s certainly realistic for SAP to tell customers right away what it will attempt to do, but it will “still take several quarters to see if they’re pulling it off,” he said.

Would you recommend this article?

Share

Thanks for taking the time to let us know what you think of this article!
We'd love to hear your opinion about this or any other story you read in our publication.


Jim Love, Chief Content Officer, IT World Canada

Featured Download

Featured Articles

Cybersecurity in 2024: Priorities and challenges for Canadian organizations 

By Derek Manky As predictions for 2024 point to the continued expansion...

Survey shows generative AI is a top priority for Canadian corporate leaders.

Leaders are devoting significant budget to generative AI for 2024 Canadian corporate...

Related Tech News

Tech Jobs

Our experienced team of journalists and bloggers bring you engaging in-depth interviews, videos and content targeted to IT professionals and line-of-business executives.

Tech Companies Hiring Right Now