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5/13/2010
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SAP Must Prove Sybase Synergies

Applications vendor is counting on breakthrough combinations with Sybase mobile and analytic technologies.

Real-Time Analytics

Sybase's $800 million database and information management unit -- the largest part of its business -- sometimes gets short shrift as being staid and unglamorous. But SAP is counting on important synergies here, too, particularly with the Sybase IQ analytic database and Aleri, the recently-purchased complex event processing company.

The staid part is Sybase ASE, the company's transactional database and distant-fourth competitor to Oracle, IBM and Microsoft. SAP doesn't even support ASE as an underlying database for its applications currently. Support will quickly be added, but SAP executives clearly stated yesterday that they are not interested in single-stack selling and will leave the choice of databases entirely up to the customer. A few hard-core ASE customers in the banking, insurance or government sector might bite on database consolidation, but the majority of SAP customers run Oracle database, and SAP knows better than to mess with entrenched loyalties.

There's a two-way fit between SAP's in-memory technology and Sybase IQ, which is the leading column-store product in what has become a very-hot market. In the current big-data era, more than 2,500 customers are using IQ for fast analysis of huge volumes of information. That's a nice match with SAP BusinessObjects and the closest market adjacency in the deal. Introduced by SAP in 2006 as part of BW Accelerator, in-memory technology speeds analysis by handling processing in cache rather than on disk. SAP incorporated in-memory into the BusinessObjects Explorer tool last year.

By combining IQ and in-memory analysis, Sybase customers could gain an even faster analytic database. On the SAP side, SAP customers are likely to see the same combination; and if it's well integrated, customer analytic queries could explore real-time transactional information as well as historical information. That would enable users to make decisions based on what's happening now rather than relying on yesterday's data. Lots of application vendors are working on eliminating the barriers between the transactional and analytic worlds. Microsoft (Dynamics), Lawson and Epicor have made strides in blending business intelligence into apps with recent releases, and it's a central tenant of Oracle's coming Fusion Applications.

Another real-time wrinkle in the Sybase portfolio is Aleri, the complex event processing (CEP) vendor Sybase acquired in February. CEP is used to spot patterns in fast-moving, high-volume data streams as they course through business systems, rather than after the data is stored and becomes a matter of history. The technology was pioneered on financial trading floors, but it's now being adopted for telecommunications network monitoring, smart power grid management, real-time Web clickstream analysis and adaptive supply chain/shipping logistics planning. It's a good fit for many SAP customers, and it could also be used to quickly pass data from the transactional environment into an analytic warehouse. IBM, Oracle, Tibco and Software AG all have CEP technology, and Microsoft recently added it to SQL Server with stated ambitions to pursue real-time data analysis.

Execution Counts

There's no shortage of potential in the combination of SAP and Sybase technologies. The real question is whether SAP will be able to beat rivals in delivering innovative products and services that exploit these underlying technologies. Oracle acquired the TimesTen in-memory database years ago, but the technology hasn't surfaced very prominently elsewhere in the portfolio. Oracle also has CEP technology, by way of the BEA acquisition, but here, too, the company hasn't delivered much. But that's not to say it couldn't answer SAP innovations.

Combinations of Sybase IQ and BusinessObjects are also a possibility, answering IBM's bundling of Cognos software with its data warehouse offerings. On the mobile front, the question is, will on-device access to apps be truly game changing, and can rivals counter with good-enough access through the dominant mobile platforms?

Mobile access to applications and the blending of historical and real-time transactional insight are very new areas that don't have a proven market track record or known demand. In that sense, SAP is truly counting on innovation and breakthrough-value for customers.

"Yes, we could work together and, yes, we could go to market through partnerships," acknowledged SAP co-CEO McDermott during yesterday's conference call. "But when you put two great engineering teams together to share crown jewels, you can connect the shop floor to the corner office and help customers all over the world be real-time enterprises."

That's a compelling vision. Whether it pays off is a matter of timely execution.

For Further Reading

SAP Buys Sybase For $5.8 Billion;

SAP Smart To Snare Sybase’s Mobile Mojo.

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