SAP Acquires Sybase To Capture Mobile Momentum

Earlier this week SAP acquired Sybase for $5.8 billion. Blogs from my colleagues Stefan Ried and Holger Kisker primarily address the database and business analytics components of the acquisition. However, it is important to recognize how prominently SAP emphasized Sybase’s success as a mobile middleware platform and solution provider as a key driver of the acquisition. SAP highlighted the importance of extending mobile applications to billions of mobile users worldwide over any device as a strategic imperative. Forrester’s 2010 survey of IT decision makers in nearly 2,000 North American and European enterprises highlights the critical role of mobile applications and smartphone devices in corporate strategic initiatives. When it comes to mobile applications, 45% of enterprises prioritize supporting more mobile applications for out of office users as a critical or high priority in the coming year, and 33% state that supporting more mobile applications for employees who work in the office is an important or critical priority. In addition, supporting the use of more smartphones is an important or critical priority for 44% of enterprises.

The Sybase acquisition will enable SAP to deliver mobile applications to the growing number of individuals using mobile devices and smartphones. Sybase has a suite of mobile solutions including the Sybase Unwired Platform, a mobile client development platform which supports device platforms including RIM, Google Android, and Apple iPhone. The Sybase 365 mobile messaging platform supports messages for over 700 enterprise customers, including many leading communication service providers. Mobile assets account for about one third of Sybase’s $1.2 billion revenues, and are the fastest growing segment of the business.

SAP and Sybase are not strangers. In March 2009, the two companies established a partnership to develop and deliver SAP applications over the Sybase Unwired Platform. SAP’s acquisition of Sybase solidifies this relationship permanently and provides SAP with immediate credibility in the mobile solution arena. Sybase is challenged with retaining the ability to provide mobile middleware solutions to enable the interface of many different mobile applications (not just SAP applications) with the fragmented array of mobile device operating systems. Sybase will be a wholly owned subsidiary of SAP which should give Sybase the autonomy to continue to play this neutral role in the mobile middleware arena. However, Sybase must show that this is, indeed, the case in the future.