Sybase Bounces Back From Slump

Updated: Database maker Sybase released a Q4 earnings report that showed it had bounced back from a gloomy first half of the year, with customers opting to snap up the host of new products churned out in the com

Database maker Sybase Inc. bounced back from a gloomy first half of the year, with customers opting to snap up the host of new products churned out in the companys most productive year ever.

"Were very pleased with our results for the year," said Sybase CEO, Chairman and President John Chen in a statement. "We strengthened and enhanced our traditional products, as 2004 emerged as our most prolific product-introduction year ever."

Sybase on Tuesday reported 4Q 2004 revenues had increased 4 percent to $218.6 million, from total revenues of $210.7 million in the same period of 2003.

It was welcome news coming after a year in which first-quarter results saw Sybases revenues decline 14 percent year-over-year and 2Q revenues fell to $188 million from year-ago revenues of $192 million.

In a teleconference with media and analysts following the earnings report, Chen said that the catch-up was due more to sales of new products than it was to customers finally closing on deals they had postponed during the first half of the year.

Senior Vice President of Sybases Information Technologies Solutions Raj Nathan told that about 17 new products hit the market, not counting upgrades. The products fell into four categories: Products that work on data already stored in the database, above the storage layer, including Real Time Data Services and Dynamic Archive; areas in the middleware stack that have the ability to manage data or applications on mobile devices, such as Unwired Accelerator and Unwired Orchestrator; specialized mobility solutions, particularly for vertical industries such as the pharmaceutical sector; and banking solutions.

Sybase has historically been a strong player in mobile solutions and in financial services, and 2004, in the end, proved to be no exception. Whereas the first quarter saw particularly disappointing results in financial services and telecommunications, typically two of Sybases strongest markets, the 4Q results showed Sybase rebounding in those sectors.

/zimages/1/28571.gifClick here to read about Sybases joint initiative with Informatica for accessing data in mainframes.

For example, Sybase in October closed a deal with Bank of China, one of the worlds top banks, as it selected Sybases Financial Fusion Banking Solution for online banking services throughout China.

Sybase is particularly excited about that win. "China, domestically, is growing very fast," Nathan said. "Theyre offering more services. Also, banks in China want to participate in the international banking arena. For example, organizations such as Bank of China may want to open banks here. They also want to participate in markets outside of China. They have to invest in IT to keep up with Europe, Japan, and other parts of Asia, as well as in North America."

Coming into 2005, Sybase is promising a new version of Sybase IQ, its highly scalable analytical engine, which is due out this quarter. The next release of Sybases relational database, Adaptive Server Enterprise (ASE) 15.0, is also in beta, with general availability expected in August, Chen said during the earnings call.

As far as Sybases release of ASE Express Edition for Linux goes, Nathan said that downloads have been brisk, but no revenues have materialized as yet from support. "Weve seen over 16,000 downloads and 20,000 registrations," he said. "Not yet support. Well probably see that in 2005." But the whole idea of the Linux edition wasnt to get revenues from support, Nathan said—rather, it was to get Sybases footprint established within new enterprises, so as to spread the reach of Sybase, which has long been the dark horse of databases in comparison to Microsoft Corp., IBM and Oracle Corp.

"The idea was to get our footprint established," he said. "A quick sample [of Linux edition downloaders] told us that 35 to 40 percent of them had never tested a Sybase product before. They are completely new to Sybase. … Ive talked to about six end-user companies in the Bay Area who started using [open-source database] MySQL and started developing applications with MySQL. They moved from MySQL on to [proprietary database management systems such as] Sybase, Oracle and so on. Were hoping that model, where customers use us, start developing applications, start finding out about us, they will call back for licenses."

Editors Note: This story was updated to correct Raj Nathans comment about Bank of China.

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