A New Era Dawns for Sybase
Written By: M. Reed
Published On: March 8 2001
A New Era Dawns for Sybase
Sybase, Inc. (NASDAQ: SYBS) has announced an agreement to acquire
New Era of Networks, also known as NEON,
(NASDAQ: NEON) in a stock-for-stock trade valued at approximately $373
Million. After completion, Sybase will create a new e-Business division
integrating NEON and other parts of its product suite. Within the last
month, Sybase has announced record earnings and completed a three-year
re-engineering effort to transform themselves from a database vendor to
a provider of e-business solutions.
Colorado-based NEON offers a range of enterprise application integration
products and services in the application-to-application (A2A) space. (It
should be noted that TEC treats A2A as nothing more than enterprise application
integration, or EAI, by another name). Key NEON products include NEONProcess
Server, NEON e-Biz Integrator, and pre-packaged
solutions called NEON Adapters that are designed to work
with specific off-the-shelf applications and standards. According to the
vendor, with NEON Adapters customers can easily integrate best of class
ERP, CRM, supply-chain management and e-Commerce applications including
those from SAP, Siebel, i2 and BroadVision.
to John Chen, chairman, president and CEO of Sybase, "With NEON, Sybase
will be able to capitalize on the most important segment of the e-Business
marketplace - one that necessitates the integration of existing applications
with new e-Business applications. With this, Sybase can join the top-echelon
of e-Business infrastructure providers, capably servicing some of the
most demanding environments in the world."
announcement is yet another chapter in the continuing saga of Sybase's
recovery from near disaster. Not too many years ago, Sybase was considered
a has-been in the vendor community, with declining revenues, a defecting
customer base, and the fourth or fifth (out of 5, dueling with Informix
for the bottom rung) ranking relational database management system.
that time, Sybase has refocused on vertical markets, released new versions
of its software (including Sybase Adaptive Server
IQ Multiplex for Windows NT which was proven to support
a 2.0 terabyte data warehouse on NT and won the Winter scalability award;
and also their enterprise portal product, Sybase EP), and
moved into the lucrative application integration market space. According
to CEO Chen, "e-Business will be for this decade what the database was
for the '80s and packaged applications were for the '90s and Sybase will
be a leading e-Business platform provider." They are one of the last of
the major software vendors to enter the application integration market,
but will be able to hit the ground running due the breadth of their product
offering, established customer base, and strong sales, marketing, and
vendors, especially the smaller ones, will have to keep a wary eye on
Sybase to see how they approach the market, and what distinctive competencies
they highlight to customers. These vendors may be forced to modify their
marketing message to counter Sybase's moves, a novel concept in the last
few years, since Sybase was generally a follower, not a leader.
Customers evaluating EAI (or IAI, or A2A, or B2B, pick your acronym) solutions
should include Sybase on a long list of vendors for technology selection.
There are many vendors which compete in this space, or ones similar to
it, and due diligence must be exercised to ensure that what the vendor
says they sell is what is actually "in the box". Sybase is promising technology
that is actually being delivered to customers, and should be able to provide
reference accounts that have implemented environments similar to the one
being contemplated by the evaluation team.
with a strong management and a vision for e-Business enablement which
many vendors lack, Sybase brings to the table an ability to support long-term
customer relationships. Over the years, database management system vendors
have become quite facile at servicing and supporting customer relationships
that last for many years (the life expectancy of a typical RDBMS). This
capability is absent in many of the smaller vendors, who are more used
to shorter product cycles. Indeed, one of the reasons given by Ardent
Software to explain its merger with Informix in late 1999
was that Ardent could leverage just this type of expertise from Informix'
worldwide sales and support organizations.
the "e-Business infrastructure provider" market, Sybase will be competing
with vendors such as Informix/Ascential, IBM, BEA
Systems, NEON Systems (not to be confused with New
Era of Networks), WRQ, IONA Technologies, Oracle
and Microsoft, among many others. Customers should engage in a
careful needs-assessment exercise (especially in the area of what platforms
data must be extracted from) before speaking to vendors, and can then
further refine their product requirements as the selection process progresses.