In late breaking news today, SAP announced a definitive agreement to acquire Sybase for $5.8 billion. The deal will be accretive for SAP and is expected to close in July 2010. Sybase is a profitable company with revenues of $1.2 billion and $1 billion in cash. Sybase Chairman, CEO and President John S. Chen will become a member of SAP's Executive Board.
The deal is a good move by SAP mainly because it accelerates SAP’s innovation strategy, which is focused on in-memory computing, mobile device applications, analytics, and SaaS. Sybase brings assets to the table in each of these areas:
- In-memory databases via its Adaptive Server Enterprise (ASE) platform and SQL Anywhere.
- Mobile applications development and device management via Sybase Unwired and Afaria.
- Analytics via the Sybase IQ column oriented analytics server and complex event processing (CEP) technology.
- Cloud computing is delivered via Sybase’s partnership with Amazon Web Services.
It is also a good move for several other reasons:
- It extends SAP’s industry play with Sybase’s strong presence in financial services, as well as increasing its regional presence in AsiaPac.
- It grows revenue profitably, at a time when SAP has been struggling with sales of its own products.
- It makes a move that will get Oracle’s attention.
Regarding the latter point, SAP and Oracle regard one another as bitter rivals in applications, yet SAP has a significant dependence on Oracle as a key database platform provider, both for customers and for its own internal use. Potentially, the Sybase ASE database platform will reduce SAP’s own dependence on Oracle and give it an opportunity to offer customers another option. However, Sybase is not currently a supported platform for the SAP Business Suite. SAP says it intends to make Sybase a supported platform as soon as possible.
Overall, the real gem of the acquisition, from an innovation standpoint, appears to be the mobile development environment and device management platform. With Sybase Unwired, the mobile apps can be written once and deployed on multiple mobile platforms, including BlackBerry, Apple, Android, etc. This platform gives SAP the opportunity to develop new types of business applications for mobile devices, extending its footprint well beyond the current apps portfolio.
My colleague Boris Evelson raises interesting questions regarding product overlaps from a BI perspective http://blogs.forrester.com/boris_evelson.