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Todd Does SAP's Purchase of Sybase Accelerate Mobile CRM?

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 By Todd Weiss

Will More Integrated CRM and Mobile CRM Expand Mobile Adoption?

In the world of enterprise resource planning (ERP) software and customer relationship management (CRM) systems, the announcement that enterprise software and ERP powerhouse SAP is acquiring database vendor Sybase for about $5.8 billion is big news.

Several SAP executives were quick to tout the move as a boon for mobile users who will now be able to gain ERP expertise and power on their mobile devices for their businesses. "With this transaction, SAP will dramatically expand its addressable market by making available its market-leading solutions to hundreds of millions of mobile users, combining the world's best business software with the world's most powerful mobile infrastructure platform," said Bill McDermott, co-CEO of SAP, in a prepared statement. "This is a game-changing transaction for SAP and Sybase customers, who will be better able to connect their staff with key functionality and information from anywhere and make it easier for companies to make faster, more informed business decisions in real time."

Notwithstanding the hype from SAP, is this a move that can finally accelerate mobile CRM adoption to a mass scale? Several ERP and CRM analysts have been taking a deep look at the new SAP Sybase combined offering. "Immediately, I think it puts SAP out in front" in terms of truly joining ERP and mobile capabilities, said Merv Adrian, principal analyst with Pleasanton, California-based IT Market Strategy. "Assuming," he quickly added, "that they execute."

"But the vision goes beyond that," Adrian wrote in his blog. "The combined companies will be able to deliver the ability to act on those decisions, anywhere, anytime. The combination of SAP's substantial share of its customers' transactional systems with Sybase's mobile expertise in messaging and application development tools for mobile devices affords extraordinary opportunities that are not lost on management."

In a follow-on telephone conversation, Adrian said the merger makes a lot of business sense because SAP retains a huge base of customers using SAP ERP applications and that they'll be able to obtain big gains from the alignments that come from Sybase mobile offerings. "Part of the value of SAP's original purchase of Business Objects was in helping business decision makers make decisions," he commented. The Sybase deal is another step in that same direction, he added, especially since Sybase and SAP have already worked together on some of these kinds of technology issues before joining.

A big stumbling block to expanding the use of ERP on mobile devices so far, Adrian said, is that there are so many types of devices and form factors on which these applications have to be able to operate, which requires extensive custom porting. The Sybase acquisition will be a major boon for SAP in this case, though, because Sybase has "ways to do this that's device independent, so it doesn't have to be ported to each specific device. It's probably one of the most important things that Sybase brings to the table here."

In addition, Sybase can further help SAP as the company has been doing a lot of work with mobile carriers in mobile commerce and related fields, especially in verticals such as accounting and finance, Adrian said. Sybase also has its Sybase 365 offering, which is essentially inter-carrier middleware for messaging that allows communication messages to be distributed across carriers to get to the endpoints, he explained. "This is big stuff," he said. "This is putting two big business values together. So bringing Sybase's mobile capabilities together with SAP's ERP software capabilities is a massively synergistic opportunity."

If the two companies pull this off and bring the two technologies together successfully - ERP and deep mobile computing capabilities - "at a level that's not been done before, that's very powerful," he said. "This could make mobile ERP more of a reality."

However, none of this will be easy, writes independent mobility analyst, Kevin Benedict. Benedict, the principal consultant for Boise, Idaho-based Netcentric Strategies, wrote that he once ran a mobile enterprise application company that partnered with Sybase, so he saw this kind of acquisition as inevitable. "SAP has been highlighting mobility since last December, but the timing still took me by surprise," he acknowledged. "I have been recommending for some time that SAP should own the mobile integration layer. I think this move will clarify in the future how mobile applications should integrate with SAP."

On the other hand, Benedict wrote, the acquisition of Sybase "introduces a host of near-term problems for customers and partners" because it will take some time for the full integration of the software product lines to take place, perhaps even not until after 2011. "SAP needs to immediately clarify their recommendations for what customers should do today to address their mobility needs or risk introducing sales and market paralysis," Benedict wrote. At the same time, he advised Sybase has a major shortcoming, it "does not have a user friendly, graphically rich, template based rapid application development environment for enterprises or systems integrators to develop mobile enterprise applications. It requires deep programming skills and knowledge to utilize their mobile middleware. I know as I have used it."

SAP software customers "need mobile enterprise applications now," Benedict writes. "How does this acquisition help? It doesn't in the short term," and that's a problem for the companies and their customers.

What this all means, he writes, is that there is still much work to be done to integrate the products and capabilities of the two companies. And until then, "companies looking for mobile solutions should not expect to find them in the SAP-Sybase acquisition".

In a related story in Mobile Enterprise Magazine, Jack Gold, principal analyst with J. Gold Associates, says the deal is a cunning move by SAP. "SAP rightly understands that within the next two to three years, there will be more mobile platforms used in business than desktops, especially in emerging markets where many businesses are skipping the traditional PC device in favor of the many flavors of smart phones and other wireless devices (i.e., emerging trend in tablets-slates)," Gold told Mobile Enterprise. "Getting to this 'next billion users' is critical to SAP's long term success. With the acquisition of Sybase, SAP gets a proven technology player that has a major impact on mobilized solutions across a wide swath of features and capabilities. And while mobility may be the driving force behind this acquisition, SAP also gets a high quality analytics capability and mobile infrastructure play (Sybase 365) it can leverage to boot."

For the future of mobile CRM and ERP, the SAP acquisition of Sybase is promising but not yet certain. The next two events which may result in increased mobility, or not, include SAP's integration of its new acquisition as well as how this deal will inspire similar acquisitions and realignments by competitors. End

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Comments — Comments for this page are closed —

Guest Jay Huntsman
  I think the Sybase acquisition demonstrates real commitment by SAP toward mobility. Their words also back up their actions. I attended SAP SAPPHIRE NOW, 2010, and the three most touted topics were mobile, software as a service and in-memory database management. The new slogan for the event was "on premise, on demand and on device." Co-CEO Bill McDermott made a bold statement that SAP will be number 1 in enterprise mobility. I don't think they could possibly be any more clear with their intent and investments. It'll take some time, but watch for SAP to set the bar with mobile business applications.

Guest Anonymous
  SAP hasn't a clue about mobile CRM or CRM software in general. When ERP software users desire mobility, they may then be in a position to offer a solution.

Guest Brian Williams
  Please thank the Oracle sales person for the valuable prior comment.
  Denise Denise Holland
    So noted.


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With this transaction, SAP will dramatically expand its addressable market by making available its market-leading solutions to hundreds of millions of mobile users, combining the world's best business software with the world's most powerful mobile infrastructure platform."

~ Bill McDermott, SAP co-CEO


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