SAP Swallows Sybase, CEO John Chen's Role Uncertain

Sybase will be an SAP brand, not a separate subsidiary, in an integration that eliminates the longtime Sybase CEO's current role.
The big Sybase sign at 1 Sybase Drive in Dublin, California, has come down, soon to be replaced by an SAP sign. It's a change that symbolizes the switch from "Sybase, an SAP Company" to Sybase as a brand name attached to the company's products. It's a change that's happening amid an unrelated top-level executive shakeup at SAP North America.

Sybase is being integrated into its corporate parent to bring the company's database and mobile assets and its expertise into the SAP fold. It's also a move that, for now, leaves longtime Sybase CEO John Chen in limbo. "Mobility needs to be closely connected to all our apps, and the Sybase database team needs to help us accelerate the in-memory computing revolution," SAP Co-CEO Jim Hagemann Snabe told InformationWeek at last week's SAPPHIRE conference.

Where it took SAP little more than a year to integrate BusinessObjects, the business intelligence software SAP acquired in 2008, SAP took its time with Sybase because it was a different type of acquisition, according to Snabe.

"It was important to keep Sybase a separate company for a while because it was a new business for us and they had a lot of customers we didn't want to lose that were not SAP applications customers," Snabe explained.

BusinessObjects, too, had plenty of non-SAP customers, but the overlaps were significantly lower with Sybase, Snabe said. Having evolved the Hana in-memory database strategy, matured on mobile, and learned how to work with stand-alone Sybase customers, the time was right for integration, Snabe said.

[ Want more on SAP's in-memory strategy? Read SAP Builds Ecosystem To Boost Hana. ]

Chen's current position will be eliminated through the integration project, which Chen is leading. Snabe said Chen is being "extremely professional" about the change.

"We're, of course, looking for other opportunities to leverage [John Chen's] leadership and skills," Snabe said.

SAP's most recent acquisition, SuccessFactors, has been retained as an independent subsidiary in much the same way that Sybase was held. But SuccessFactors CEO Lars Dalgaard, 44, was immediately invited to join the SAP executive board and charged with running the company's cloud computing business. A native of Denmark, Dalgaard speaks several European languages including German.

Reached by phone, Chen, 57, told InformationWeek that the idea of integrating Sybase was discussed with him in a very "open and transparent" way.

"If you look at the bigger-picture benefits of integrating the sales force, engineering, and the back office, I felt it was the right thing to do even if it was difficult for me on an emotional level, given that I had built up the company over the last 14 years," Chen said.

The transition to a single company will be completed by July from an operational perspective, Chen said, though legal corporate paperwork may linger. Chen said it was agreed that his future role would be addressed at the conclusion of the integration project.

"I'll keep a very open mind because I like the company and I'd like to be involved if it's the right thing for me to do," he said. Snabe and Chen did not discuss possible new roles, but Chen, a native of Hong Kong, is credited with leading Sybase's successful push into the Chinese market, which is also an important long-term strategic bet for SAP.

With the SAP and Sybase product lines more tightly coupled, sales and service should improve, he added, noting that stand-alone Sybase customers, such as those in financial services, are very important to SAP. "There's a lot of opportunity for SAP to leverage the Sybase footprint on Wall Street, and it was a key reason for the integration," Chen said.

Sybase customers can only hope that SAP has learned lessons from its poorly handled transition from BusinessObjects to SAP support services soon after the business intelligence vendor's acquisition in 2007. SAP hastily switched services with little warning to customers, and active service cases in the BusinessObjects system were actually lost. SAP subsequently struggled with poor BI-support satisfaction ratings, and it has yet to fully recover in the "ability to execute" dimension of Gartner's Magic Quadrant for BI.

Diversity Goal

SAP is making another executive change after recently parting ways with its president of SAP North America, Robert Courteau, after just 15 months in that role. That move came after SAP's results fell short of expectations for the first quarter of 2012, and the company admitted that "sales execution issues" had diminished the company's performance in North America.

SAP has since replaced Courteau with Geraldine McBride, a 16-year SAP veteran who left the company just last year to join Dell as vice president and global head of its Applications and BPO Services business. At Dell, McBride led more than 15,000 employees in that company's services business, and she is now the highest-ranking female executive at SAP. That distinction was held for many years by human resources executive and Executive Board member Angelika Dammann, who retired last year.

SAP has set a long-term target to increase the share of women in management to 25% by 2017. The company said that figure recently stood at 18.7%.

A native of New Zealand who also spent 10 years with IBM, McBride pointed out in an interview with InformationWeek that technology has always been a male-dominated field. "I've never made an issue out of being a woman, but I've always been an advocate for diversity," she said.

Women face unequal pay as well as unequal representation in IT, according to the InformationWeek 2012 U.S. IT Salary Survey. Based on interviews with 1,713 female and 12,163 male IT professionals, the survey found that median compensation for female staff is $80,000 versus $90,000 for men. The median salary for female IT managers is $109,000 versus $118,000 for male managers.