SAP Acquire Sybase
SAP Moves into the Database and Mobile Market
SAP have announced that their subsidiary, SAP America, Inc. have signed a merger agreement to acquire Sybase, Inc.
Now the deal is closed, SAP have wasted no time in laying down a mobile-centric roadmap for SAP and Sybase synergies. According to the SAP press release, they plan to extend the reach of Sybase's solutions across mobile platforms, whilst using Sybase's mobile platform to connect the SAP and non-SAP applications and data, and enable them on mobile devices. SAP will also acquire Sybase Unwired, which allows mobile apps to be written once and deployed across multiple mobile platforms, including BlackBerry, Apple, and Android.
During the company's Q1 2010 conference call for investors, co-CEO of SAP Jim Hagemann Snabe hinted at this forthcoming shift in focus for SAP. He said that “mobile devices are becoming the preferred interaction point with business applications. We want to make sure that SAP solutions can be accessed from all leading mobile platforms, like RIM, Nokia, Apple, Google Android, etc."
According to Paul Hamerman, vice president of enterprise applications at Forrester Research in Cambridge, Massachusetts, this acquisition is effectively SAP heavily betting on mobile applications as the future of computing. Jefferies & Co analyst Ross MacMillan gave this strategy his seal of approval, telling Reuters that Sybase's mobile software will give SAP an edge over Oracle when it comes to allowing customers to access business management programs on the go.
Meanwhile, SAP's in-memory technology will be used in Sybase's analytic processing capabilities, and Sybase's core database business will be integrated with SAP in-memory technology to deliver combined transactional and analytical capabilities.
This acquisition brings SAP into the database software market, where it will compete with Oracle. Oracle have traditionally sold the database products that are needed to connect with business applications, although SAP's acquisition of Sybase's ASE database platform could reduce SAP’s dependency on Oracle. Could the community soon have an integrated SAP and Sybase database option, to choose from?
But, how much is Sybase's database software worth? Currently, Sybase trails Oracle, I.B.M. and Microsoft by a “significant margin” in the database market, according to The New York Times – that “significant margin” being a 3% share of the market, compared to Oracle's 43%, I.B.M'S 24% and Microsoft's 19% market share. However, Sybase's database could benefit from the upcoming SAP integration, and it hasn't been doing too shabby – in 2009, it accounted for 73% of Sybase's $403 million software sales – even if Sybase wasn't quite giving Oracle and Microsoft a run for their money.
SAP pledges to continue to support each organisation’s product road map. Sybase will now operate under the moniker of 'Sybase, an SAP Company,' although Sybase’s management team will continue to run the business and there are plans to appoint the Chairman and CEO of Sybase to SAP’s Executive Board.
SAP America, Inc, will make an all-cash tender offer for all of the outstanding shares of Sybase common stock at $65.00 per share. This is a 44% premium over the three-month average stock price of Sybase. Following the announcement, Sybase's shares rose to $64.50 in extended trade, after climbing 35% on the NYSE after it was announced that SAP was planning to buy Sybase.
The transaction is expected to close during the third quarter of 2010. SAP Business Suite does not currently work with Sybase’s database, although Noel Yuhanna, an analyst at Forrester Research, told The New York Times that this integration could be achieved in six months, with a combined SAP and Sybase product expected to be launched in around a year.