10 Reasons Why Buying Sybase Was a Good Move for SAP

by Eric Lundquist and John Pallatto

Larry Ellison has been buying every company he can find that fits with his business application consolidation model. But Oracle could never buy Sybase without gutting the Sybase customer community.

The mobile Internet is the next big thing and Sybase has the chops to be the database for the mobile enterprise database machine.

SAP needed an enterprise-scale relational database underpinning to build its business applications business both direct and in the channel.

Sybase will help SAP in the mobile and cloud computing sectors, which are the two areas where SAP stands to gain the most in the unrelenting market competition with Oracle.

SAP and Microsoft have been application development allies. Microsoft has sometimes been rumored as a potential suitor for SAP. With the Sybase deal, it will gain technology that will help SAP make inroads in the midmarket business where Microsoft is strongest.

Sybase needed access to a big customer base if it was going to grow its mobile business. Sybase and SAP have already been doing business together on lots of different levels.

While it probably was not the decisive factor, SAP stands to gain Sybase’s annual revenue stream of about $1.2 billion, including new revenue sources from Sybase database and mobile software products.

SAP has recognized that if it is going to be a 2.0 business in the cloud and applications on-demand company, it needs a mobile business database platform. Those are all elements also still missing from the Oracle portfolio.

SAP will be able to work more closely with mobile device makers such as Hewlett-Packard, Research in Motion, HTC, Apple and Motorola to get SAP applications running on their mobile hardware.

Look for SAP to rapidly and closely integrate its Netweaver Web application platform with the Sybase Unwired Platform to give mobile devices of all kinds online access to the SAP technology stack.