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SAP takes on Oracle with $5.8bn Sybase bid

18th May 2010
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German ERP developer SAP has finally taken Oracle head-on by acquiring Sybase, one of the last remaining challengers to Oracle (aside from Microsoft and IBM) in its core database market.

By acquiring Sybase for $5.8m, SAP can add a relational database management system (RDBMS) to go alongside its enterprise resource planning (ERP) and business intelligence (BI) software portfolio. While Sybase ultimately was left behind in the great 1990s database race, it diversified into wireless and mobile applications and scored a big success with its iAnywhere Mobile Office. According to SAP executives, this mobile expertise was one of the key drivers behind the Sybase deal.

“With the acquisition of Sybase, we will secure our leadership in on-device, further cementing our ability to bring information to users anytime, anywhere, and on any device,” said SAP co-CEO Jim Hagemann Snabe.

“As mobile applications for consumers have changed the world, the way people live and communicate mobile applications for the enterprise will have an equal profound impact in the way they work. We want to make sure that SAP solutions can be accessed from all leading mobile devices.”

Back in the 1990s, Sybase competed with Oracle, Ingres and Informix in the market for relational database management systems (RDBMS). Ingres ultimately became part of Computer Associates, while Informix was acquired by IBM. Analysts at Gartner now estimate Sybase to have just 3% of the database market, compared to 19% for Microsoft, 24% for IBM and 43% for Oracle. 

SAPs rode to a dominant position in ERP software on the back of Oracle’s database, but was doing so well that Oracle decided to launch its own competitive business applications. For years analysts speculated whether SAP would purchase its own database in order to lessen its dependency on Oracle, but instead it extended its support to Informix and other RDBMS – but not Sybase.

The move came later than anticipated, but SAP now has its own in-house database technology. “We will continue to innovate the database and grow the license and maintenance revenue stream coming from it,” promised Snabe.

The SAP co-CEO explained that Sybase’s “column storage” technology was particularly useful for advanced analysis and would combine well with SAP’s activities around real-time analytics. “Sybase will help us accelerate the delivery of a next generation platform for business intelligence and planning optimising applications,” he said.

This article is based on a more detailed analysis by Stuart Lauchlan on our sister site


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