While watching the recording of last week’s press conference for the launch of SAP HANA for ERP, I noticed something that already struck me a number of times before.
At 18 minutes into Hasso Plattner’s introduction, a presentation slide comes up titled “Where We Are Today”.
“Thanks to the power of SQL, only one version of Suite will go forward using not only HANA but DB2, Oracle, MS-SQL, SAP-ASE as well.”
That’s all good, but what struck me here is “SAP-ASE” being mentioned last. This must be about “Sybase ASE” – I’ve seen it named “SAP Sybase ASE” elsewhere – but why is it mentioned after Oracle and Microsoft?
After all, SAP spent 5.8 billion to acquire Sybase in 2010. After the initial press coverage it got very quiet around Sybase. And that’s odd: Sybase was supposed to be a strategic and database-centric acquisition for SAP. Yet SAP never seems to bother even mentioning Sybase.
A case in point is Hasso first mentioning Oracle, DB2 and MSSQL with ASE trailing at the end: it doesn’t sound like he cares much about the Sybase databases. If Hasso or SAP did care you’d expect to see ASE always mentioned first. Okay, let it come second after HANA, but definitely the pecking order should be that all non-SAP databases only get into the picture after HANA and Sybase ASE.
It was not the first time this made me wonder. When was the last time you heard Sybase being promoted at a big SAP event?
So what has happened to Sybase? Their products had a good reputation, with Sybase ASE strong at Wall Street. Sybase had probably disappeared off most IT people’s radar but with SAP blowing wind in Sybase’s sails, great things could have happened. Sybase still has thousands of paying customers and SAP sure wants to keep them happy. Staying mum about Sybase will not achieve that.
I occasionally tried to discuss the Sybase issue at the big SAP events, but finding folks with opinions ain’t easy. Most agree Sybase is invisible. Consensus on the reasons there is not:
- Buying Sybase was a mistake since SAP is exclusively about HANA.
This one I got at the HANA booth at Sapphire (perhaps not surprisingly). The Sybase databases will be closed down and the developers reassigned to HANA or leave. This is not impossible but then there comes a point where SAP must write down those acquisition billions and I guess they’d rather avoid that (HP/Autonomy, anyone?). SAP may have gotten some technology from Sybase but if that really played a role in HANA you’d expect SAP to give that fact much more exposure, if only justify the acquisition.
- SAP only took the Sybase mobile software but never knew what to do with Sybase databases which they just forgot about and now they’re quietly circling the drain.
The rationale behind acquisitions is often more boneheaded than you’d think so this is a definite possibility. But also here a huge write down would be looming which makes this theory unlikely.
- SAP just needed fresh new customers to sell SAP applications to.
At least that’s how Bill McDermott’s quote can be understood: “With this transaction, SAP will dramatically expand its addressable market by making available its market-leading solutions to hundreds of millions of mobile users, combining the world’s best business software with the world’s most powerful mobile infrastructure platform”. This actually makes sense because as we all know the ERP market has become saturated and is more of a replacement market now. But also here you’d expect more rumble about Sybase if SAP wants to approach those customers.
- Sybase was destined to be SAP’s flagship database.
According to SAP at the time of the acquisition, “Sybase’s core database business will be enhanced by SAP in-memory technology to deliver integrated transactional and analytical capabilities, according to SAP.” This sounds like putting the HANA concept inside Sybase. When you think of it, that actually makes a lot of sense: take some startup ideas and put them in a well-established proven product.
But there must have been a change of plan because HANA took the #1 spot. Maybe the Sybase technology was not as good as it seemed but SAP only found out after the deal?
- SAP has a plan to use Sybase technology as part of HANA but does not want to give it exposure.
I would have believed this two years ago but if they still have not figured it out by now, it ain’t gonna happen. Business Objects got much better visibility in comparison.
- Sybase is SAP’s secret weapon: while HANA is sold at premium price, Sybase will be deeply discounted to undercut Oracle, Microsoft and IBM for everyone who does not buy HANA.
Such a two-pronged strategy would make a lot of sense, especially because HANA seems very expensive for ERP (remember, you need to buy special hardware for HANA too). But SAP’s corporate silence around Sybase doesn’t add up. Even a great secret weapon does not sell itself. And from what I understand the pricing for Sybase is exactly the same as for Microsoft and IBM. So whatever the plan is, it’s not this one.
In short I just don’t see how the Sybase acquisition makes economic sense to SAP unless Sybase databases are either aggressively marketed/sold or the Sybase technology somehow gets a prominent place in HANA. In either case SAP would need to give it exposure or Sybase effectively dies as the silence erases it from memory. And that would make the acquisition a failure.
If SAP is forced to write down the Sybase acquisition that would be a public embarassment for SAP and surely it will not be appreciated by investors. It also calls into question SAP’s technology vision.
So if I had the opportunity to ask Hasso a question, it would be this: you have stated repeatedly HANA is the future, but how does Sybase fit into this? Please enlighten us.