Chen Looks For Apps Partners

The Sybase CEO lays out his plans to form partnerships, improve his database and target verticals.

At its TechWave 2002 conference in San Diego this week Sybase Inc. announced it had expanded its partnership with PeopleSoft Inc. so that PeopleSoft would support more of its applications on Sybases ASE [Adaptive Server Enterprise] database. Sybase, of Dublin, Calif., is at a critical juncture with its database, which has steadily fallen in market share to reach just 3.3 percent of the market for new relational database sales in 2001. In an interview with eWEEK Labs Director John Taschek and eWEEK Senior Writer Matt Hicks, Sybase Chairman, President and CEO John Chen emphasized why the PeopleSoft partnership, and others in the future, will be important to reviving the companys database sales. Chen also provided more details on where Sybase is heading in supporting its database and emphasized how the company has moved far beyond being a database developer to focus on integration, mobile technologies and vertical solutions.

eWEEK: Why are you expanding your partnership with PeopleSoft?

Chen: A couple years ago we started building platforms and turnkey solutions, and we still had missing a really full suite of development toolsets, which we absolutely corrected. And also we were missing major partnerships—applications providers—because a lot of our customers wanted to have the option of build versus buy. When we pushed just build, thats how we got into trouble because they wanted to have both sides of the equation.

We [Sybase and PeopleSoft] also have a very common view and vision of what the future looks like in the market. We love their people, and the people are very easy to work with, unlike some others.

eWEEK: Where are you in working beyond PeopleSoft in having these kinds of technological integrations with other enterprise applications vendors?

Chen: We look at this relationship as rather special. Our strategy with going after theses apps is we want to have the best of breed for each different category of apps. PeopleSoft happened to be our choice of CRM[customer relationship management], ESA, supply chain, HR[human resources] and financials, and there are other relationships that we will have where we will take each others [sales quotas]. Soon I hope we will have a GIS [geographic information system] solution. We already have a content management relationship with both Interwoven and Documentum and search engine relationship with Autonomy.

The strategy is not to have a lot of different relationships but have a few that we could make preferred. We havent really signed any exclusive agreement with anybody, but we like to have a short list of major partners where if any time a Sybase employee is asked by a customer, "What do you provide as a CRM solution?" [we say we] partner with PeopleSoft.

If you follow Sybase for awhile you realize that this is a rather major commitment on our part because weve always been rather neutral. Consequently, some of the application providers are rather neutral to us as well. So weve decided that the smartest thing for us to do is to really sign up for a much longer-term relationship with some top tier-one [providers].

eWEEK: Sybase grew up as a database company and you mentioned that youre looking to be pouring more resources into the database. Could you be more specific in what youre doing, and what should customers be expecting in the coming months?

Chen: There are three areas. One is on the development side we have a roadmap to focus on clustering, failsafe and scalability features. In the partners area, were going to go deep with vertical partners like [in] telco, financials and health care. Thats another investment. These next 12 months will see us pretty aggressive with the financials vertical apps. An example would be fixed-income trading systems. Whoever has a fixed income trading systems wed like to partner with them aggressively. The other area is in sales and particularly the partner alliance sales. With PeopleSoft, were going to have a specialized sales force to take quotas on partner stuff, which weve never done before. We envision that there will be somewhere between eight to 10 people around the world that will take quotas on the PeopleSoft alliance.

eWEEK: Do you expect this relationship to increase your database market penetration?

Chen: Yes we do, we do expect to see that improve. Not just this particular one but this whole concept of really partnering and allying and assigning quotas to our own specialized sales force to bring in more database sales behind it.

eWEEK: How many of these alliances or partnerings youre looking to do say in the next 12 months?

Chen: Well be very careful. I would say one or two more, tops. I think the most important thing is to get this one successful. Once this one is successful I think it will attract a lot of other partners who will say, "Hey Sybase is a pretty good company to work with." Id like to make sure we have a great showcase first.

eWEEK: Where do you think the database market share will come form?

Chen: There are many areas. One of the things weve done poorly in the past with all these apps is we allowed some of our biggest accounts to get penetrated or Trojan-horsed by Oracle [Corp.] and other people who come in underneath the apps. This one will block off some of those future [problems].

The other area is new accounts. When they pick PeopleSoft they actually care less of what database it runs on as long as PeopleSoft supports a tier one. And I have a number of those already, and these are people weve never really done business with. The database was not the choice, the choice was which app they picked.

The third area including the database is sales in Asia Pacific.

eWEEK: But on the side of people actually buying the database because of the database, when are we going to see a next major upgrade from Sybase in your database platform?

Chen: We just did XML [in ASE 12.5]. We always release a major version every other year, so towards the middle of next year. I hope at that time that were going to release a new clustering [capability].

eWEEK: Why clustering? What do you want to do there?

Chen: Our database needs to be kind of a darkroom, black box…database technology is going to that. Its reliable, it scales, it recovers on its own.

We believe in looking at our customer base and looking at the value that we could add. Rather than go fight it out with [Microsoft Corp.s] SQL Server [database] on price on NT, which I think thats interesting but that doesnt play to the strength of our hand, pushing the enterprise up plays to the strength of our hand. Thats what were trying to do.

eWEEK: Did you find that Oracle RAC [Real Application Clustering] technology is something you want to emulate?

Chen: The industry is moving to a kind of grid computing space. I believe in that. I cant speak to Oracles [RAC technology]… We are aligning with the grid kind of concept where database resources are not only recoverable but are on demand. Thats what we believe in and that is what were working on.

eWEEK: During the keynote, you were outlining an increased focus on vertical solutions—the next verticals being telecom and health care. Why this vertical approach? It seems like you could become just kind of a niche player.

Chen: Ever since I took over, I always had the concept that we have a huge installed base but theres thinking of us just selling a database. Eventually, if the database market commoditized, and we dont have enough real applications on top – whether its by partners or by ourselves – eventually you become irrelevant to the decisions. What youre seeing in everything were doing is really to move from database and development tools up one level to the integration platforms. And now were moving yet another level. By turning some of these components to solutions…I used the word solutions, I didnt use the word applications because Im not going to get into applications. Im providing a turnkey solution for messaging, like HIPPA [Studio] is a messaging system for healthcare, like [PATRIOTcompliance] is a messaging system for financial services. So were very careful to make sure we have more turnkey [solutions] that showcase the different parts of our components. On the apps side well leave it to the partners.

The reason Im moving up is really to protect our installed base and broaden our footprint in those verticals rather to want to be a niche player. That space plus government has about 40,000-plus customers. In the meantime, [for] the other verticals we want to broaden [to] we want to give our stack to partners. For example, Ericsson [Inc.] is taking our entire stack and putting it in their network management business. Thats one.

eWEEK: What would you classify as the biggest push youre making at this point?

Chen: If I fail in being a top integration platform provider that means then I have trouble. So the No. 1 thing we have to make sure we do is to be known as an integration platform provider.