Despite Revenue Shortfall, Sybases Chen Optimistic

By Lisa Vaas  |  Posted 2003-04-17

Despite Revenue Shortfall, Sybases Chen Optimistic

Despite an earnings report that showed Sybase Inc. revenues in the first quarter of 2003 fell short of expectations by $20 million, plus an earlier IDC report that showed that the companys role in the RDBMS market is shrinking, President and CEO John Chen told eWEEK that Sybase is doing "tremendously well," pointing out that share prices were up 68 cents following the earnings report.

Still, IDC in March released a report that found that Sybases already small share in the RDBMS (relational database management system) market slipped even further in 2002. The company took in RDBMS software revenue of about $464 million in 2002, accounting for a mere 3.6 percent of the $12.7 billion market. That was down 6.3 percent from its 2001 share of $495 million, IDC found.

At the heart of Sybases RDBMS woes is the companys dependence on large enterprise sales, the report said. It also claimed that Sybase is "suffering from a decline in credibility in the marketplace due to a general perception that Sybase no longer provides leadership in the RDBMS space."

In an interview following Thursdays earning conference with media and analysts, Chen challenged those assertions, pointing out that Sybase is doing well in other markets besides that of RDBMS.

"On the lower end and medium-size market, were doing tremendously well," said Chen, in Dublin, Calif. "On the mobile end and embedded systems end, we own 73 percent of the market. … so the answer to IDC is theyre looking at just one corner of the market."

Chen attributed much of Sybases ongoing profitability to the companys database efforts—particularly, in the realm of mobile and embedded databases.

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Indeed, Sybases iAnywhere Solutions Inc. subsidiary is a bright star in the companys sky. Sybase completed its acquisition of the company in the past quarter, putting it into high gear with partnerships. Deals included arranging a relationship with Intel Corp. to deliver mobile technology; hooking up with NEC Corp. to stimulate the development of mobile, wireless and remote database-powered products in Japan; and announcing the formation of iAnywhere Solutions KK in Japan, a subsidiary that will push to grab more of Japans mobile, remote, embedded and workgroup database and mobile middleware market.

As for the RDBMS vision, Tom Traubitz, senior marketing manager for Sybase, promised there would soon be news around XQuery, the XML querying standard now under consideration by the W3C.

Meanwhile, Sybase customers are keeping the faith, with renewal rates for ASE service at 94 percent, Traubitz said.

Indeed, customers such as Versifi Technologies Inc. arent concerned about Sybases shrinking market share or its lower-than-anticipated earnings. Versifi, an enterprise infrastructure and integration company in Aliso Viejo, Calif., recently selected Sybases ASE (Adaptive Server Enterprise) on Linux for its data management platform. Jerry Schuman, president and chief technology officer, spurned earnings and analyst reports, saying that Sybases Java capabilities put it head and shoulders above other RDBMSes.

"With [things like] J2EE support, Sybase has always been the front runner," he said. "We know our DBMSes extremely well. We run them all—SQL Server, Oracle, etc. … From the enterprise market space, Id say Sybase is an extremely strong offering for anybody looking to get into any kind of secure, highly transactional, good uptime and multiplatform support."

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