Sybase celebrates being in the black

Smoke machines, green lasers, pounding rock music and videos of waves crashing on distant shores greeted a record number of Sybase users at the company’s TechWave ’99 conference, held recently in Buena Vista, Fla.

John Chen, chairman, CEO and president of Sybase greeted the nearly 5,000 attendees with a keynote speech thanking them for the company’s success. It was Chen’s first year as CEO, and the first of a three-year plan focusing primarily on financial stability.

“Twelve months ago when I took over this job, whenever I’d see customers or members of the press, a lot of people would ask me ‘is Sybase viable?’ Well, I’m very pleased to report to you that, nowadays, I rarely get asked that question,” he said.

“And that has to do with the fact that we make money – we make a lot of money.”

The company has had a net profit for five consecutive quarters, and has accrued almost US$300 million in cash, which is “ready to invest,” he said. Chen expects Sybase’s revenues to grow by 10 per cent to 15 per cent next year, based on sales of 12 products introduced this past year and another 12 products to be unveiled over the next year.

However, sales for the rest of this year will be flat, he warned, due to continued uncertainty over year 2000 problems and the time lag while sales of the new products ramp up. The company invested 17 per cent of revenues in research and development last year, and expects to match or exceed that this year, he said. Sybase must provide more than technology, it must become a solutions provider, he said.

As part of Sybase’s corporate makeover, the company “divisionalized” into four areas: business intelligence; enterprise solutions; Internet applications; and mobile and embedded systems. The company has also given up its “stealth marketing” strategies in favour of many aggressive marketing campaigns which will be apparent in the next few months, he said.

Chen also detailed the company’s Enterprise Information Portal (EIP) strategy which will serve as a big piece of the company’s global business platform. Sybase aims to use its existing product line to capitalize on the emerging EIP market, which is expected to be a US$14.8 billion market by 2002, according to Merrill Lynch, he said.

Sybase had suffered in the past because it hadn’t gained a position in the packaged applications market, Chen continued. He wants the company to invest in turnkey platforms in industries where Sybase has a strong presence. Most prominent among these is the capital market, where Sybase has increased its market share in production databases to 68 per cent, up from 62 per cent last year, he said.

“Sybase is definitely back – it’s a very strong company.”

Rob Hailstone a research director for Bloor Research in Bletchley, England said the most significant announcement had to do with the restructuring of the company into four separate business units.

“They’ve gotten over that whole ‘we are going to do everything to save costs’ bit and are now restructuring back to growth again, which has got to be good news.”

He also said the EIP strategy will probably be significant for the company. “I think the difference with Sybase (compared to other companies offering portal strategies) is that they have actually got quite a bit of product breadth and a lot of technology to back it up with. And they’ve also got the infrastructure to provide the services, support and consultancy too.”

One Sybase customer at the conference said the company’s roots in client/server and mobile environments made it a good fit when first choosing a database.

“I think [Sybase has] dealt with a lot of the issues that we will need to deal with as well,” said Ken Johnson, vice-president of sales for NIKU, a Redwood City, Calif.-based consulting firm. He was also encouraged by the keynote addresses.

“I like their enterprise portal (initiative), I think it’s a step in the right direction. Obviously, we are neck-deep in portal technology. But I think from the standpoint of what Sybase is doing, once people understand how they can harness these portals rather than make everything run on private networks, people are really going to pick up on that.”

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