SAP co-CEOs Bill McDermott and Jim Hagemann Snabe and Sybase CEO John Chen keynoted a two-continent event on August 19 to demonstrate their solidarity and provide an early look at strategic plans. Many analysts greeted the initial announcement with positive reviews – mine is here, and Noel Yuhanna of Forrester weighed in here. Progress since the $5.8 billion transaction formally closed (just a few weeks ago) has been modest, but certainly better than the message, which was not yet crisp. The press release (several pages in length) was long on marketing phrases and short on specifics, and those in attendance generally found the content scattered and difficult to parse. Highlights emerged, however, in the subsequent discussions as press, analysts and bloggers dug in for details:
- A mobile application software development kit (SDK) will combine the Sybase Unwired Platform (SUP) with SAP NetWeaver Mobile and Business Objects Mobile software within 9 months.
- Sybase CEO John Chen, on the SAP board, will operate Sybase as a “separate, independent unit,” and reaffirmed the commitment to maintaining the product roadmap he made when I interviewed him at TechWave
- SAP will “port, certify and optimize” SAP Business Suite, NetWeaver Business Warehouse, Business Objects Data Services and Business Objects BI solutions to Sybase ASE. No dates were specified.
- Business Objects, already certified for Sybase ASE and IQ, will be “combined with (unspecified) Sybase data management servers” to deliver “discovery, storage, and consumption.” No dates were specified; it’s not clear what’s new here other than packaging.
- The companies will incorporate SAP’s in-memory computing technology across SAP and Sybase data management offerings.
Bill McDermott kicked the story off with some ringing phrases. As I’ve said before, the charisma deficit is clearly behind SAP, as McDermott spoke enthusiastically of billions of workers and trillions of devices to be linked. He yielded the floor with a generous intro:
“We become the leader in mobile with the Sybase acquisition – and we can see the transformation of Banking and Retail businesses ahead. John Chen, a luminary, is an incredible leader with a great management team. Under him, the roadmaps go forward.”
Chen observed that SAP’s 22 verticals afford opportunities for “low-hanging fruit mobile applications.” As he noted, the combination of technologies allows such scenarios as businesses reaching a discrete customer in a discrete location with a loyalty campaign. In a live demo using a shortcode texted to a consumer whose location in a store was known, a POS system, integrated with SAP’s CRM offering, addressed the mobile device, offered the consumer a deal to sign up, registered membership, presented a coupon, and executed the transaction.
Some twitter traffic at this point said “we’ve seen this before.” True, but this combination brings real applications to the table, not just parts and possibilities. Consumers don’t go to Home Depot to buy a house, and businesses don’t build enterprise-class transactional mobile apps out of widgets. SAP provides a business process platform the retailer already is running; SUP mobilizes. For this observer, the promise is shorter time to value, and we may at last see widespread rollouts of systems that until now have been left to the pioneers. To Chen’s point, there is plenty of low-hanging fruit out there.
Digging in the Data Details
Vishal Sikka got the tough assignment: answering a welter of specific, pointed questions about the entire portfolio. Determinedly casual (he told me he wouldn’t be caught dead with a tie given a choice), he took on all the questions and offered a lot of specifics, given the short window since the deal was closed. For example, he defended database diversity in the portfolio: “One size does not fit all for database. Depending on the app we’ll use different database management.”
The combined company has both mature and new databases. Sikka noted, “IQ is an awesome disk-oriented column store and we’ll make it a supported database for [more – MA] Business Objects products.” In response to my question about which in-memory offering is the go-forward choice, Chen added, “As long as it’s transparent to our customers, we will have the best underneath – either one, a combination – whatever gets them protection of their purposes.” Sikka was nonetheless clear that the SAP in-memory columnar database technology is the future, and that the “disk-optimized” Sybase IQ will continue to be sold and developed, with its attributes being added to the SAP technology. Clearly, SAP is not likely to abandon the substantial and still growing IQ revenue stream, and indeed, several references were made to its future release strategy.
The ease of handoff between the two firms here was evident. It confirms off the record conversations I’ve had with the Sybase technical teams that have dwelled on what was often called the “respectful” process of discovery and exploration of technical opportunities that has been underway so far.
I asked about the volume of non-database resident information, the fastest growing piece of many shops’ challenge. Sybase CMO Raj Nathan talked of Sybase’s work on distributed query processing, and said that future releases of IQ will have access to Hadoop and other outside structures. No details yet, but in earlier conversations, Sybase has shown some of these ideas under NDA to analysts, and the commitment to that work is likely to grow, not shrink, with SAP’s help. Information management was so prominent in the dialogue that Carl Olofson of IDC (twitter: @databaseguru) tweeted: “ they buried the lead: the mobile info stuff is great, but its power is in … ASE and Replication Server.” As a fellow database guy, I can hardly disagree; Replication Server was unnamed but has thousands of customers and its heterogeneous data support is a powerful weapon in SAP’s broad strategy..
SUP? Mobility Rises, NetWeaver Continues
Project Gateway will create the connection to SAP applications for SUP (which already has extensive data connections but not for all the specific application possibilities.) Specific timing is not yet forthcoming – again, hardly surprising. The commitment is to enable both current and prior versions of SAP application software, a substantial undertaking that will take time to plan and execute. Sikka reaffirmed that “NetWeaver is our platform, underneath everything that you see. Joint products will get the organizational structures necessary to develop, deliver and sell them.”
Specific application mobilization in SAP’s verticals creates new market opportunities, and Nick Brown, SVP for mobility, reaffirmed retail and CPG as early opportunities that can leverage Sybase’s industry-leading mobile banking and mCommerce offerings, some of which the companies were already working jointly for sales and workflow. Brown noted that partners like ClickSoftware and Syclo are also on board offering certain mobile middleware solutions.
There are significant opportunities for the development expertise Sybase brings: for example, it’s unclear how to handle device-specific GUIs and functions (trackballs, pinch and stretch, etc.) and avoid reducing functionality to least common denominator approaches to avoid incompatibilities. Designers will want to use the “coolest” capabilities. Device GUIs and functions will be developed using the manufacturers’ (iPhone, Blackberry, Android) mobile OS SDK. I asked about PowerDesigner and PowerBuilder. I got an acknowledgment that features like the datawindow are leverageable onto a mobile device, and that the SDK will come with UIs – for workflows, process logic – a complete package. But no more details yet. For me, the opportunity to offer guided scenarios to developers (“You’ve chosen Blackberry. It has trackball click features that allow you to….Click here for commands.”) offers real possibilities that go beyond today’s simple apps.
Some of the analysts and bloggers had specific – and often enthusiastic – points of view. Bob Ferrari was eloquent in noting the maturity of SAP’s viewpoint as they discussed how mobility will work:
I finally heard an open acknowledgment that industrial or supply chain related mobile applications are far different in approach than the mobile user performing periodic inquiries or seeking ad-hoc analytical information…. that you just can’t take a 20 screen SAP order entry application and send it to an iPhone or BlackBerry user and require them to navigate through all of these data inputs in a 3.5 inch screen… that CIOs have real issues in security of information on mobile devices, and that mobile applications remain uncharted territory… too many times I have witnessed briefings that completely gloss over realities or complexities of enterprise level systems.
It’s also worth pointing out (several of us were tweeting about it) that Sybase’s Afaria device management will be a substantial asset here, offering capabilities that few organizations have even considered yet for their mobile future – securing and managing devices, applications and data. In some of the key verticals, this capability will be a powerful differentiator – although one suspects Sybase will still sell the offering to non-SAP customers, sustaining its strong, profitable business there.
Event Processing – Hidden Jewel
Hardly mentioned until raised in the Q&A, Complex Event Processing is a key piece of RAP, one of Sybase’s recent products getting attention and strong growth in the financial market. RAP has an event engine, in-memory columnar processing, and rich analytics libraries bundled into a unique package. Raj Nathan noted it’s about to also be targeted at the insurance industry, and with SAP’s support, beyond into other markets.
Sybase plans to rename its Complex Event Processing (CEP) products, which include the recently acquired Aleri, as the Sybase Event Streaming Platform, and in response to questions the company talked about the attributes of Coral8, Aleri and the prior Sybase offerings and how they will be brought together into the combined future offering. Analyst Curt Monash discussed some of these details a few months ago in this post.
Going to Market – Some Questions
Many of the analysts are not as familiar with some of the surrounding Sybase assets that will act as force multipliers for the new combination. For example, the addressable ecosystem is further extended with the opportunity to engage and transact with four billion mobile subscribers, through Sybase’s messaging and mobile commerce services. The Sybase 365 play, a profitable business in its own right, delivers reach to 900 mobile operators worldwide. And all of them are potential customers for the rest of the portfolio. Raj Nathan, responding to questions about go-to-market mechanics, noted “SAP has a very large sales force across many verticals.” His eagerness to leverage that engine was almost palpable.
Sikka looked ahead to a release of Business Objects coming this year, focused on preserving simplicity while adding enterprise attributes and processes. In fact, BI was one of the main themes called out in the press release, but it got little specific discussion – as noted above, product specifics were vague, packaging is unclear, and all the BI we saw was “applied BI” in the service of better applications. That will be very useful to customers and points the way to richer uses. But there is an “independent” revenue stream for Business Objects as a “separate, independent unit” as well, and exploring those options was largely left undone. I’ll be watching for more at Sapphire.
Engaging both firms’ partners is an opportunity, but will take focus, resources and a strong program. Both companies have existing programs for partners and developers. How will the partner relationships and ecosystem programs evolve? Some of SAP’s require investment for participation; Sybase’s are structured differently. Will partners in one be invited to the other? The answer to that question came immediately when SDN invited participation. On what terms? What kind of programs will be built to certify and cross-train existing partners? These are downstream efforts, of course, that will take time, and both firms’ long experience will be brought into play. It may be one of the larger opportunities ahead.
Finally, as for the message delivery, there’s some work to do. One of my favorite recommendations to marketing communications and AR folks has always been: think of the headline you want. Set it up. Develop the “Why.” Review it at the end. Many vendors miss this basic idea in their briefings; this was one of those cases. A few key points, crisply stated and repeated, are needed by the time Sapphire rolls around. Not just for analysts and press, but also for the sales forces, which will need the stories to tell to customers and prospects as 2011 budgets begin to be prepared.
Other Posts For Further Reading
Jon Reed (twitter: @jonerp) posted an informal 5 minute video chat with Vishal Sikka well worth watching here. Jon’s an astute observer well worth your time for the perspective of someone committed to make SAP offerings work.
Eric Lai, a former journalist now employed by Sybase, gives his view (a non-executive’s reaction, if you will, from the inside) in his post.
Brian Sommer’s take on his Enterprise Irregulars blog is here.
Disclosures: SAP and Sybase are clients of IT Market Strategy
Once again, a very insightful analysis, Merv. I didn’t attend the keynote but watched the tweetups and the blogs, but this is clearly the first one with deep substance.
Once again, it seems that SAP has emphasized how Sybase will help to mobilize processes, : it was more about a mobile roadmap that about the Sybase/SAP overall roadmap, leaving behind the Business Intelligence and information management stuffs, wasn’t it ?
On the database side, and specially on the analytics data base side, I’m a little bit frustrated by the announcement. SAP/Sybase cannot in the long term go to market with so many different options (ie : BW, in memory appliance, columnar disk based data base) without articulating a convergence roadmap . And I’m surprised that SAP don’t highlight the benefits of the different approaches with relation to “data heat” (eg Sybase IQ can complement in memory with low cost near line storage thanks to efficient compression algorithm, thereby making in memory more affordable) -> they have an opportunity to differentiate here if they can integrate they technologies and make it simple.
On the wider BI side, I fully agree with your comments. BI was mentioned in the press release, but clarification misses. And feel SAP cannot wait until Sapphire 2011 to clarify on that. They are the BI leader, aren’t they ? and Oracle pressured them with the OBI announcement on their own play gound (with message around integrated meta data, business apps…). So I feel they should launch their BI solutions with dedicated focus and explain how the new Sybase/SAP will make the difference. Seems that there should be lot to say about appliances, common meta data layer, self services… And BW customer in particular need again a clear message on were this solution is heading after all those acquisitions.
The last area were I feel SAP/Sybase need to clarify, is Enterprise Information Management. This is an area where both Business Objects and Sybase have a significant background. But, since SAP has acquired BusinessObjects, seems like EIM has small traction. I feel that the Sybase/SAP merger should resonate to SAP as a wake up call in this domain, where players like IBM and Informatica are moving very fast. An area were well targeted acquisitions may probably help, eg in the MDM arena or Data services for the cloud arena.
Thanks for a detailed comment full of the right questions. It’s no surprise that Oracle’s messaging on BI was crisp and detailed – and very well focused on its key messages. That continues to be an area where Oracle routinely outperforms its competition. That said, I think that it’s fair to think back to when Oracle began discussing Fusion, and consider how long it took to get clarity there before we are too hard on SAP and Sybase for not having a fully realized roadmap and set of messages just a few weeks after the actual close of the acquisition.
There was discussion of both BI and of EIM at the event, and it’s fair to say the executives attempted to paint a picture of intent and direction – and largely succeeded. There’s much work to do before an engineering plan can be built and an allocation of resources that allows them to give an estimate of time to delivery. Our impatience will just have to simmer a little while.
Thanks for this useful summary, Merv. Extra points for the alliteration in the title. I would also note that, when asked why more detail regarding plans for DBMS, CEP, etc., were not shared or even included in high level slides, the answer was that they wanted to focus on the key themes of emphasis: synergy, mobility, and joint innovation (specifically around IMDB). In so doing, I feel, they missed an opportunity to assure existing users, especially of ASE (and to a lesser extent IQ, though as you point out, it was highlighted a bit) that their products remain strategic.
Thanks, Carl. I agree, but I also think we have to give them credit for clearly being in serious thought about where they will go, and being candid about the high-level directions. You and I have some pieces we both want to see – and I think we will before long. The clock is ticking.