Database Race Gets Hotter

Sybase looks to NEON to fuel growth; IBM drives away with Informix.

Fourth place isnt good enough for Sybase. The vendor—which trails IBM, Oracle and Informix in the database market—is poised to swoop into new areas through its pending $373 million acquisition of New Era Of Networks (NEON).

Sybase CEO and president John Chen says his company will use NEONs integration technology for new tools that will work across multivendor enterprise portal architectures, in addition to Sybases own portal.

Diversification is nothing new for Sybase. The company has augmented its core database business, moving into mobile/wireless databases, financial database management, enterprise development tools, business intelligence and various vertical markets.

So far, the results are mixed. Chen has rebuilt Sybase into a profitable company, but revenue rose only 1 percent for the quarter ended March 31. Sybase could face even more competition from IBM, which plans to acquire Informixs database business.

Still, some observers say Sybases planned acquisition of NEON could be one of the vendors best moves to date.

"Were fairly bullish about enterprise portals, which give end users a single common view of the world," says Dwight Davis, a VP at market research firm Summit Strategies. "The challenge is that everyones been trying to build their own frameworks, with plug-ins that only work with their own particular architectures," says Davis.

By contrast, Sybase is building products that could bolster cross-platform interoperability. The company will leverage NEONs software integration technology in the upcoming 3.0 edition of its own Enterprise Portal, as well as a vendor-neutral "portals kit." Both are expected to ship in August.

"We already have a proof of concept for the kit," says Chen. NEON makes a series of EAI products that include point-to-point "adapters" for integrating ERP, CRM, supply chain and e-commerce applications from companies like BroadVision, i2 Technologies, SAP and Siebel. Up to now, though, a tool kit has not been part of the NEON lineup.

Combining technology from NEON as well as Sybases existing PowerDesigner and PowerJ tools, Sybases planned portal kit will let integrators and other solutions developers build custom adapters that will "attach to anything thats J2EE-compliant," says Chen.

If Sybase is able to fulfill this vision, its latest diversification effort could help to shore up the companys bottom line, something much needed in light of the recent IBM and Informix deal.

Sybases Financial Fusion and business intelligence arms, for instance, have remained unprofitable. Chen, however, expects both of those businesses to show a profit or break even by Q4 of this year.

Chen says hed like to grow both the services and products sides of the business by 10 percent annually, while increasing the percentage of revenues from Sybases partnership with NEON to 30 percent of the mix by the end of 2001.