Newly combined SAP and Sybase could mean big trouble for Oracle

SAP and Sybase are making a big play for Oracle database and business applications customers, according to industry experts.

BOSTON -- Technology professionals can expect SAP Business Suite and other SAP offerings to be fully ported, certified and optimized to run on Sybase database management system (DBMS) software by the middle of 2011, SAP and Sybase officials said yesterday.

The announcement, made yesterday at a media and analyst event co-located in Boston and Frankfurt, Germany, put a general timeframe on SAP’s plans to support its newly acquired database technology. Industry analysts have been speculating about the SAP product roadmap since May, when SAP acquired Sybase for $5.8 billion.

SAP also plans to port and optimize several other products to run on Sybase’s flagship database product, Sybase Adaptive Server Enterprise (ASE). In addition to SAP Business Suite, the list includes SAP NetWeaver’s Business Warehouse component, SAP BusinessObjects Data Services software and SAP BusinessObjects business intelligence (BI) software.

When the porting and certification process is complete, analysts say, the newly combined powers of SAP and Sybase could present Oracle with some big problems – especially if SAP’s other long-term gambles on mobility, in-memory database and analytics technology pan out.

“I think that in the long term [SAP-Sybase] could definitely pose a big threat to Oracle,” said Noel Yuhanna, a database technology analyst with Cambridge, Mass.-based Forrester Research Inc.

SAP and Sybase spotlight business analytics, in-memory database capabilities

SAP-Sybase officials also spent time yesterday focusing on business analytics software. Company officials pointed out that SAP-BusinessObjects Business Intelligence (BI) offerings are already certified to run on Sybase’s analytics engine -- Sybase IQ -- as well as Sybase ASE 15.0. Additional SAP offerings will be ported and certified for Sybase ASE between now and the middle of 2011.

SAP officials said the combination of SAP, BusinessObjects and Sybase will offer users a complete analytics infrastructure that includes business analytics applications, BI reports, and scorecards and dashboards, as well as data integration and data quality-related capabilities. Officials said the portfolio will also include fully integrated transactional storage, data marts and data warehousing features.

SAP and Sybase also plan to introduce industry-specific analytics applications for financial services, consumer products, and retail and manufacturing organizations.

Meanwhile, executives said they will leverage SAP-Sybase's in-memory computing technology across all of the company’s data management products. In-memory database technology speeds up the process of retrieving information for business applications by storing data in the cache as opposed to within a database or storage system itself.

In-memory database technology is increasing in popularity because the high costs associated with it are starting to fall. But at least one technology professional questions whether in-memory database technology would be helpful at his firm.

Brandon Lassiter, a BI solutions architect with Ferguson Enterprises Inc., a large Newport News, Va.-based distributor of residential and commercial heating, plumbing and building materials, said he believes that in-memory database technology is good for straightforward queries. But he doesn’t quite see the value of in-memory when queries get more complicated.

Lassiter, who has a great deal of experience working with software from SAP, BusinessObjects and Oracle, added that he doesn’t think in-memory would benefit him because his company offers more than 2.5 million products, and queries can get very data intensive.

"Unless you have a more simplified business model where you can classify customers, vendors, products or locations in a very standardized and homogeneous format across organizations … in-memory management almost becomes unwieldy because you're managing an extremely large and unstructured dataset,” he said. “That, combined with the cost, to me limits the proposed benefit of in-memory systems."

SAP vs. Oracle: A new chapter begins

SAP’s acquisition of Sybase should provide the German software giant with a fresh burst of energy in its ongoing quest to take customers away from database and business software market leader Oracle Corp., according to some IT industry analysts.

Forrester’s Yuhanna, who attended yesterday’s event, said the task of getting Oracle customers to defect to SAP is largely about the money.

If SAP successfully positions Sybase Adaptive Server Enterprise (ASE) as a reliable, lower-cost alternative to Oracle Database, Yuhanna believes that many Oracle customers would be likely to jump ship. With a little up-selling, he added, those same customers could be persuaded to standardize on SAP-Sybase for both database and business applications.

While cost is important, however, it’s not the only factor that customers will look at when comparing Oracle with SAP in the future. Analysts say the Sybase acquisition also throws a spotlight on considerations related to, among other things, mobility and database optimization.

SAP is now banking on its mobile strategy. At yesterday’s event, the company announced plans to gradually release its entire collection of business applications on a unified, Sybase-enabled mobile platform. SAP and Sybase executives said the newly converged mobile platform should be available within nine months. Oracle, meanwhile, hasn’t been so heavily focused on mobile issues, according to Yuhanna.

“SAP believes that mobility is going to be the big [revenue] driver in the future,” he said. “But I think Oracle does not see as big a driver there.”

SAP-Sybase’s continued focus on heterogeneity could also give it an edge on Oracle in the future, Yuhanna said. The new mobile platform will allow users to run both SAP and non-SAP enterprise applications on any mobile device, according to company officials.

Executives also announced that SAP BusinessObjects Mobile will eventually be fully integrated with Sybase’s Unwired Platform.

SAP and Oracle migrations expensive for everyone

Merv Adrian, founder and principal of IT Market Strategy, a Pleasanton, Calif.-based consulting firm that focuses on BI and data management, cautiously agreed with Yuhanna’s assertion that SAP-Sybase could eventually pose a threat to Oracle. Adrian stressed, however, that if it does happen, it won’t be quick and it won’t be cheap, particularly for SAP.

Adrian said SAP-Sybase’s best chance of attracting customers would be to go after new installations – organizations that don’t have an investment in either Oracle or SAP. After that, he said, SAP should focus on customers running SAP on Oracle. Finally, he said, customers that have completely standardized on Oracle will be the most difficult to entice.

“The migration of an application this large to an alternative platform will cost time and money far beyond the potential license savings [associated with switching to SAP-Sybase],” Adrian said. “Inertia is a very powerful force.”

If SAP is smart, he added, the company will eventually try to make it less expensive for customers to migrate.

“How aggressive [SAP chooses] to be on that will be a matter of investment on their part,” Adrian said. “If they consider it a strategic imperative, then they may very well spend significantly on technology and services support to help migrate the customers. That remains to be seen.”

SAP-Sybase to focus on optimization

Another factor that could sway customers running SAP on Oracle is database optimization. Oracle is the No. 1 database for SAP applications, but Yuhanna says that SAP is not completely optimized for Oracle.

“The integration level is the problem. It is not done very well [and] I think that is because of some political reasons,” he said.

But Yuhanna said users can expect SAP applications to be finely tuned to run on Sybase database software. The level of integration between Sybase and SAP will probably be highly optimized so that users can scale their applications effectively. “I think you will find that level of integration optimized so that you can scale.”

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