Sybase Launches New Product, Pricing

Sybase Inc., one of many second-tier Web application platform vendors looking to break from the pack, will launch next week aggressive pricing and new products to try to increase market share. A key component of Sybase's product strategy is application integration technology, acquired when the Emeryville, Calif., company bought New Era of Networks last year for $188.2 million in stock. The upgrades across its product line--the first incorporating Neon technology--include a portal framework, application server, integration servers, and application development tools.

While far behind application server market leaders BEA Systems Inc. and IBM, Sybase has a better-integrated product line than IBM, and Neon's application integration software is more mature and proven than BEA's, says Tyler McDaniel, market analyst for the Hurwitz Group. "Sybase has as compelling a picture as competitors, and more so than some of the others," McDaniel says.

BEA and IBM are first and second, respectively, in the number of Java-based application server deployments. However, future sales of the emerging platform for Web application development will depend on expanded capabilities, analysts say. Sybase is hoping to meet that demand with its new Business Process Integration Suite, which focuses on tools for linking applications to automate business processes within an enterprise. Built around the core application server are tools for defining business processes through application integration and monitoring those connections at runtime. In addition, the suite includes pre-built adapters to back-office applications and tools for connecting applications using emerging Web services standards.

Sybase's new pricing strategy gives companies a relatively inexpensive package for launching small projects, which can be expanded in the future. For $100,000, a company can buy an integration server and two adapters for connecting two business applications, with the option of adding more adapters at $50,000 apiece. For $75,000, a customer can buy Sybase's Enterprise Portal framework for one server, which would be sufficient, for example, for building an extranet for employees to access human-resource services. Companies interested in trying products sold through Sybase's E-Business Division, which includes the Enterprise Portal, Enterprise Application Server, PowerDesigner modeling tool, and PowerJ, a Java integrated development environment, can buy a development license only for $199. "Sybase's pricing strategy is a good way to attack the market we're in now," McDaniel says.

Sybase also plans to offer special deals for companies willing to switch from competitors' application servers and integration technologies. "The exact details of the program haven't been laid out yet," says Neil McGovern, director of business development and strategy for Sybase's E-Business Division. The company also plans to offer tailored products to the health-care, finance, and government markets.

Despite losses in the second and third quarter of last year, Wall Street has looked favorably on chief executive John Chen's cost cutting and overall strategy of aggressive pricing against competitors. "The tide is definitely turning on Sybase," says Gregg Speicher, financial analyst for Stifel Nocolaus & Co. Bear Stearns initiated coverage of Sybase last week with an "attractive" rating on its stock. The company is scheduled to report Jan. 24 earnings for the fourth quarter ended Dec. 31.