The New SAP: Databases, BI and Mobile Computing
With broad product portfolios, IBM and Oracle have been competing for dominance in the enterprise software market. SAP's acquisition of Sybase positions the company in that same competitive space, where an extensive portfolio is important to those customers who prefer to deal with a single source for software.SAP has long had a solid reputation built on the strength of its leading Enterprise Resource Planning (ERP) suite. But acquiring Sybase enables it to better compete with software for database, business intelligence and mobile computing users. SAP's move cements its identity as an enterprise software supplier with products that complement its reputation in the ERP space. The acquisition also opens the door to new markets because Sybase has an established base of customers in the financial, insurance and mobile/telco user communities.
Despite the merger's implications for marketing muscle, there are other aspects to be considered:
∙How well do the products and technologies of the two companies complement each other? ∙Can customers leverage their existing systems?
In recent years SAP and Oracle have been the big dogs in an ERP market that once included software products from Baan, J.D. Edwards, Lawson Software, Peoplesoft, and Siebel.
As the dust settled at the end of the first decade of the 21st century, an aggressive acquisition strategy had made Oracle a broad-spectrum purveyor of enterprise software, including application suites, middleware and database software. SAP countered with a replacement for its venerable ERP product (R/3) and acquisitions of its own.
To expand its portfolio of enterprise software products, SAP has made a series of acquisitions in recent years. SAP acquired Business Objects for $6.8 billion to position itself in the analytics and business intelligence (BI) space. To appeal to CFOs, SAP acquired OutlookSoft, a performance management system, and Virsa Systems, a compliance software vendor. SAP acquired Top Tier to add a corporate portal product to its software product line. The Top Tier technology enabled SAP to offer the mySAP portal and web-based solutions suite.
SAP released NetWeaver as the base for integrating heterogeneous systems and integration of SAP Business Suite with service-oriented architecture (SOA). SAP also unveiled mySAP ERP, which combines its NetWeaver platform with the R/3 Enterprise product. In a move that marks recognition of the importance of cloud computing and software as a service (SaaS), SAP launched BusinessByDesign for selected mid-sized clients. The upcoming release of BusinessByDesign will support in-memory analytics, mobile devices and business intelligence.
The Sybase acquisition is strategic because, despite acquiring Business Objects, SAP still faced stiff competition in the BI market from Oracle (Hyperion) and IBM (DB2, Cognos). In acquiring Sybase, SAP has broadened its footprint as an enterprise software vendor with software at the front and back end of analytics and BI applications.In acquiring Sybase, SAP has broadened its footprint as an enterprise software vendor with software at the front and back end of analytics and BI applications.