SAP acquiring Sybase!

SAP has offered $5.25B to acquire Sybase, the database company. I guess Sybase was the only independent database company after Ingres was acquired by Ask and then by CA. Ingres is back to being a private company focusing on open source. Informix was acquired by IBM.

When I left IBM to join Oracle back in 1992, these three were fierce competitors (Oracle, Sybase, and Informix). Sybase had good technology and it really invented the concept of stored procedures to reduce the number of round trips from the client to the server. This made Sybase the default choice for client-server database in Wall Street financial houses during the early 1990s.  Sybase also did some early pioneering work in data replication. Next to Oracle, Sybase ranked as the other database company.

But Sybase could not keep pace with Oracle’s dominance. Hence it changed course to focus on Business Intelligence, and mobile technology during last few years. Under the leadership of John Chen, it has quietly stayed healthy with reasonable growth. SAP is paying a hefty premium (around $65 a share) to acquire Sybase, indicating the value it sees.

This acquisition will bring SAP at par with Oracle’s portfolio of being a database supplier as well as application software supplier. Until now, SAP has been riding on DB2 and Oracle DBMS engines. During my early years at Oracle I spoke once to SAP users and subsequently had a chat with Hasso Plattner, the founder. At that time, Hasso emphasized how important a customer SAP is to Oracle, being a big user of the database engine. Oracle was having a tough time balancing the “friend-foe” relationship – it was a friendly customer of Oracle’s DBMS, it also competed fiercely on application software with Oracle.

Now the path will be clear. SAP will supply the entire stack, from its own DBMS engine (Sybase) to middleware (Netweaver) and Application software. It has to play the partnership roles with IBM and Microsoft carefully.

With Sybase gone, the era of independent RDBMS vendors seem to have come to an end.

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One response to “SAP acquiring Sybase!

  1. Jnan, great conclusion, though we have an explosion of small database players these days. None aspire to “Tier 1A,” as I’ve referred to Sybase for a long time. Most would be happy to be in Tier 3. It’s a long way down; arguably there is really no Tier 2 anymore, so I have to say you’re spot on.

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