SAP and Sybase Align Resources - Analyst Blog

SAP AG (SAP) and Sybase announced that they will collaborate to develop a mobile platform based on open architecture that supports different operating systems and devices.

Further, the two companies will develop a solution for corporate information management to provide customers with a broader range of database platforms for running SAP applications. Moreover, the companies will offer a comprehensive business analytics platform to support end-to-end functions
from data origination, data storage and usage of data. The two companies will also jointly develop technology to enable accessing real-time data anywhere and at anytime.

Research firm Gartner has forecasted that by 2014 there will be a very high level of mobile penetration with 6.5 billion mobile connections worldwide. This new group of users would demand immediate access to enterprise applications anytime and from anywhere.

On May 12 2010, SAP had announced its acquisition of Sybase Inc. It was agreed that Sybase will operate as a standalone unit under the name 'Sybase, a SAP Company.' Sybase's management team will continue to run the business. The SAP Executive Board is expected to propose to the Supervisory Board to appoint the Chairman and CEO of Sybase to SAP's Executive Board.

SAP would be able to accelerate the reach of its solutions across mobile platforms and drive forward the realization of its in-memory computing vision. This would drive higher user requirement of SAP software and unlock significant business value out of existing customer relationships. In addition, Sybase's innovative mobile platform can connect all applications and data and activate them on mobile devices.

For Sybase, SAP in-memory technology would provide the opportunity for dramatic performance improvements to its analytic process capabilities. Sybase would also be able to bring its complex event processing and analytics expertise, which was built in the financial sector, to customers in other industries, markets and product areas in which SAP has a complementary and strong presence.

SAP is the leader in the worldwide enterprise applications market with the largest market share. Its primary focus is on high-margin software license sales, since this category benefits the most from the improving information technology (IT) spending environment. The company is poised to benefit as the market environment is improving.

The company remains best positioned in the European software space, given its top-tier positioning, strong service-oriented architecture (SOA) adoption trends and its diversified industry and geographic footprint.  The company is entering the on-demand market, with SAP Business ByDesign being the most important innovation.  SAP Business ByDesign is a next generation on-demand technology platform, and the company is confident of rolling out the product in 2010.  The company is also innovating products in the area of mobility, which would provide SAP solutions that can be accessed from all leading mobile platforms, like RIM, Nokia, Apple, Google Android, etc.

There are many new small companies that have based their businesses on offering support and maintenance services specifically for SAP software. These companies offer their services at times up to around a  price discount of 50%. This increased competition from these specialized companies will eat into SAP's margins for its support and maintenance segment in the next several years. However, a growing number of acquisitions in the software industry since 2007 is beginning to lower the supply of software and ease the price pressure for SAP.

Headquartered in Walldorf, Germany, SAP AG is one of the largest independent software vendors in the world and the leading provider of enterprise resource planning (ERP) software. Its solutions are designed to cater to the needs of organizations, ranging from small and medium businesses to large, global enterprises. SAP's business suite solutions help clients improve customer relationships, enhance collaboration, and improve efficiencies across their supply chains and business operations.