At its August 1999 TechWave '99 User Training and Solutions Conference, Sybase announced its new Enterprise Information Portal (EIP) strategy, which it plans to make a major business thrust, unifying its four divisions under a common purpose. "Portal" is a hot buzzword for 1999, and Sybase is not the first company to jump on the EIP bandwagon, but the company's strong services organization, coupled with its middleware and database management services products, might just provide the basis for some real success in this emerging market. This Perspective looks at Sybase and its products and services as Sybase launches this new marketing thrust in mid-1999.

Sybase Chases the Portal Wave

Strategic Business Assumption
Sybase's Enterprise Information Portal initiative will fuel product and services growth in 2000 as the company leverages strengths across its divisions to support this activity (probability 0.7)

Sybase's divisional structure will force accountability and fuel product revenue growth in well-managed divisions in 1999 and 2000, led by growth in the Mobile and Embedded Computing and Business Intelligence divisions (probability 0.8).

IT services will continue to represent an increasing percentage of Sybase's overall company revenue through 2003, fueled by the specialty practice offerings of its Professional Services organization (probability 0.9).

Introduction
At its August 1999 TechWave '99 User Training and Solutions Conference, Sybase announced a major business thrust, its new Enterprise Information Portal (EIP) strategy. The company plans to unify its four divisions under this common purpose. "Portal" is a hot buzzword for 1999-Sybase is not the first to jump on the EIP bandwagon. However, the company's strong services organization and its middleware and database management system (DBMS) products might just provide the basis for some real success in this emerging market. This Perspective looks at Sybase, its products, and its services as the company launches this new marketing thrust in mid-1999.

Restructuring Implemented to Increase Revenue
The main goal for Sybase in 1999 and 2000 needs to be revenue growth. Although the company's services offerings have seen a steady growth throughout Sybase's history, product revenue has dropped steadily since its high in 1995, as shown in Figure 1, and net loss resumed its growth in 1998 after a dip in 1997. Total revenue for 1998 decreased 4 percent to $867.5 million, compared to the $903.9 million recorded in 1997. About 42 percent of the company's total revenue in 1998 was derived from international operations, up from 39 percent in 1996. For Sybase, 1998 was a year of significant change as the company implemented a restructuring program aimed at reducing costs and restoring profitability. The restructuring consisted primarily of terminating 1,097 employees, 953 of which were terminated by the end of 1998. The company also closed subsidiaries in Mexico, Thailand, Chile, Peru, and Venezuela. As of March 24, 1999, the company and its subsidiaries had 4,196 employees, excluding temporary personnel and consultants. The focus on cost cutting now needs to be replaced with a focus on revenue and profit growth.

Figure 1
Sybase Revenue History by Product Segment

Source: Dataquest (September 1999)

Effective January 1999, the company realigned its salesforce, product teams, and professional services capabilities into four new divisions, each focused on one of four key markets: business intelligence, mobile and embedded computing, enterprise solutions, and Internet applications. Each of these divisions will maintain its own profit-and-loss accountability, dedicated product development and engineering, sales and product marketing, partner relationship management, and customer support teams. Sybase is now concentrating its direct salesforce on its top 1,000 named accounts. To gain wider coverage, each of the new divisions is empowered to form its own distribution channel coordinated under a corporate program. Each division will be responsible for identifying, recruiting, and developing partners and channels to provide the domain expertise needed to enhance coverage within each target market. During 1998, Sybase acquired Intellidex Systems, a provider of metadata management technology for deploying and managing data warehouse environments, and in 1999 acquired Data Warehouse Network, a provider of industry-specific data warehouse solutions.

Enterprise Information Portals to Provide "Information Anywhere"
Sybase's new push into the EIP market space is designed to provide a unifying program that will bring the company together under a common mission, even as the four separate divisions follow their individual market opportunities. If successful, Sybase could provide some leadership solutions. The company believes that EIPs are being driven by four related factors: "a sudden confluence of content sources; an imperative to drive total commerce solutions to speed and improve customer service and satisfaction; transformation of the enterprise to community-based organizations; and a competitive mandate to join the many islands of automation and information used to manage those areas of business."

Recognizing that these portals will become a primary user interface for a broad number of corporate applications, Sybase is positioning itself early to benefit from this emerging market opportunity. Early in 1998, Sybase delivered its own "first generation" EIP (MySupport) to facilitate more efficient technical support. Sybase is now banking on the experience gained in undertaking this project to help it bring an EIP solution to market. The company is building its second-generation portal (MySybase) using the architecture it is developing, as shown in Figure 2. Sybase plans to deliver the products and professional services that leverage this second-generation portal-building experience to expedite its customers' efforts to create similar portals.

Figure 2
Sybase Enterprise Information Portal Architecture
Source: Dataquest (August 1999)

The term "portal," says Sybase cofounder Dr. Bob Epstein, "is being used today as the magic fairy dust that software vendors sprinkle over their products just before they are shipped!" And although Sybase may well have been somewhat guilty of taking this approach as well as it launched its first two "portal ready" products at TechWave '99, the company does have a serious effort under way, code-named Project OpenDoor, to create an EIP framework that will leverage already-built components such as security, personalization, role definitions, and commerce integration. The framework and associated development tools from Sybase and its vendor partners are slated to be available in beta form by the end of 1999.

Sybase's Enterprise Application Server (EA Server) will be the foundation for the EIP system. It will act as the host for delivering services such as authorization, authentication, and profile generation. EA Server also will access integration services to integrate and deliver data, content, events, and applications to the portal. In addition, Sybase is also extending EA Server, providing key protocols and services tailored to specific industries. The first delivery of this is Financial Server, which provides applications for online Internet banking and brokerage.

Sybase is also leveraging its years of professional services experience in providing solutions for integration of enterprise data, applications, and events to feed into its EIP solution. Sybase has helped its customers develop solutions to retrieve enterprise data and integrate with other applications and legacy systems. Sybase Adaptive Server Enterprise 12.0, the next release of the Sybase DBMS, is being enhanced with Java and Extensible Markup Language (XML) features to ease data movement in support of the EIP initiative.

All four divisions have or will be developing products and solutions to fit into Sybase's EIP portal framework. Although currently a mix of products coming from the different divisions, tied together by substantial professional services resources, Sybase's EIP strategy is intended to evolve into an actual solution. Organizationally, the EIP solution will be housed in the Enterprise Solutions Division, but with engineers from all four divisions participating and contributing to its development. For example, Sybase's strength in the area of mobile computing is expected to contribute components to the architecture that will support the company's "Information Anywhere" message with tools to support mobile devices. EIP is the strategic glue that will bind the individual divisions' goals together and, Sybase hopes, move the company forward.

New Divisions Focus on Revenue and Portals
Sybase began divisional reporting in the first half of 1999. The bulk of the product revenue still comes from Sybase's DBMS and middleware products, with the tools division second. Figure 3 looks at the breakdown of product revenue by each of the four divisions. The divisional reporting includes all products sold by the division as part of division-related projects. A look at product sales, regardless of which division sold the product, would show enterprise DBMS and middleware products accounting for 49 percent of revenue, tools for 27 percent, Sybase Anywhere for 19 percent, and data warehousing products for 5 percent. And although the EIP program provides a rallying call to unify the divisions, each division is adding EIP support on top of business plans already developed.

Figure 3
First Half 1999 Sybase Product Revenue Mix by Division

Source: Dataquest (September 1999)

Enterprise Solutions Division
Although responsible for some of Sybase's key DBMS and middleware technology, the Enterprise Solutions Division will concentrate on developing more services-led sales for those product offerings. Committed to supporting Sybase's established base of 40,000 licensed database and middleware customers, the Enterprise Solutions Division is chartered to provide the products and services that businesses require for developing and maintaining operational systems. Key products in this division include the Adaptive Server Enterprise DBMS, Adaptive Server Replication for synchronizing multiple database systems, and EnterpriseConnect middleware for connecting disparate database types. The division's first portal-ready products are Sybase Adaptive Server Enterprise 12.0 and Sybase Enterprise Event Broker.

Adaptive Server Enterprise Moves to 12.0
Sybase Adaptive Server Enterprise, formerly known as Sybase SQL Server, is the company's enterprise DBMS product. The company is a significant player in the UNIX relational DBMS market but has been losing share over the last few years and slipped to No. 4 in the market in 1998 (see Figure 4) as IBM pushed ahead of Sybase for the first time. In part, the Sybase slide could be attributed to the lack of support for row-level locking in the product, which the company finally corrected in the first quarter of 1998 with the delivery of Adaptive Server 11.9. Page-level locking forces users to design around concurrency problems and incur additional database administration work. The row-level locking issue had caused problems for Sybase in the packaged applications market (for example, not having an SAP R/3 port), and the delivery of Adaptive Server 11.9 was a significant milestone for Sybase.

Figure 4
Sybase's Position in the Unix RDBMS Market in 1998

Source: Dataquest (September 1999)

Adaptive Server Enterprise 12.0, code-named Avatar, is expected to be available early in the fourth quarter of 1999. The company is promoting it as "the portal-ready database." Adaptive Server Enterprise 12.0 has extended capabilities for native Java support, tight XML integration for Internet content management, high availability, and support for Web transaction management. It will include Savant's Q Diagnostic tools for performance monitoring and other key administrative tasks. This partnership with Savant provides Sybase customers with tools that are more state-of-the-art than the current character-based performance management tools. The product will also include a Java virtual machine, Java-structured query language (SQL) functions, and XML capabilities. Support for a new high-availability companion server architecture with a two-node cluster configuration that supports active/active or active/passive failover servers is also included. In case of failure, the server is designed to failover to the companion without impact to end users.

Enterprise Event Broker Added to Middleware Family
Sybase's middleware products are designed to enable information that is different in format, distributed in multiple locations, and stored in disparate computing systems to be integrated for use in online transaction processing (OLTP) and data warehouse applications and to facilitate mass deployment. The key Sybase middleware products include Replication Server, OmniConnect, DirectConnect, Mainframe Connect, and Open ServerConnect. EnterpriseConnect is a new integrated product set that became available in 1998. It is designed to provide distributed transactional replication and location-transparent, application-independent data access among heterogeneous data sources to enable customers to build corporatewide information systems. This new offering integrates Sybase connectivity and data access technologies, including Replication Server, DirectConnect, and OmniConnect.

Enterprise Event Broker, code-named Mercury, was announced in October 1998 but became generally available in time for TechWave '99. This new addition to the EnterpriseConnect family is designed to automate the capture, transformation, and delivery of business events and information across database applications and enable these to integrate with other enterprise applications without requiring changes to existing code. This product is integrated with messaging software from TIBCO Software's TIB/ActiveEnterprise and IBM's MQSeries for event transport.

Sybase is also developing new vertical-market versions of its EA Server, tailored for telecommunications and health care. The first vertical market version, Financial Server, shipped in June 1999. EA Server includes the Jaguar CTS component transaction server and PowerDynamo, a dynamic page server. EA Server is part of the Sybase Enterprise Application Studio (EA Studio), which also includes PowerBuilder and PowerJ.

Internet Applications Division-Rebuilding for the Internet
In April, the Sybase Internet Applications Division announced the general availability of EA Studio 3.0, a bundle containing EA Server 3.0, PowerJ 3.0, and the long-awaited PowerBuilder 7.0, which promises to simplify the development, integration, and deployment of enterprisewide Web applications. This release marked the first complete attempt to jump onto the Internet development wave and leave behind the out-of-vogue client/server development paradigm.

The company had evolved as a provider of tools limited to relational database development, and that was still true only a few short years ago. Sybase has now included tools for creating objects, components, distributed applications, and scalable multitier enterprise systems built on top of the back-end databases. The technical evolution of PowerBuilder over the past five years tracks closely with what most development environments that emerged in the same period (and that have survived) have gone through. Although PowerBuilder achieved the leadership position in the two-tier client/server application development tools market by the middle of the 1990s, early versions of PowerBuilder had some deficiencies, later overcome, in supporting development of more robust applications. In Version 5.0, PowerBuilder introduced the ability to build n-tier distributed applications, so that it functioned as a complete fourth-generation language rapid application development (4GL RAD) environment for building both traditional client/server and multitier distributed applications. The resulting applications, however, used proprietary middleware; PowerBuilder 6.0 offered new capabilities based on industry "standards"-Distributed Common Object Model (DCOM) and Common Object Request Broker Architecture (CORBA). Component development, the latest technology trend to impact application development, was another major emphasis for PowerBuilder 6.0.

PowerBuilder 6.5 was targeted at putting the Web to work. With 6.5 came PowerSite and PowerDynamo for building and testing page-centric Web applications. The Web Deployment Kit for PowerBuilder assisted deployment and management of applications by enabling server-based, centralized distribution and administration. It delivers an existing PowerBuilder application to any client running a Java Virtual Machine (Java VM).

Although there is still a great deal of legacy PowerBuilder code that needs to be maintained and improved, some new projects-especially on the server side or middle tier-are being built in Java. Sybase acknowledged this trend and added Java to its core development technologies with the PowerJ integrated development environment and the Jaguar CTS transaction server. In 1998, Sybase combined PowerBuilder, PowerJ, PowerSite, PowerDesigner, Appmodeler, PowerDynamo, Jaguar, and Adaptive Server Anywhere into EA Studio. The 3.0 version of EA Studio includes significant upgrades to all the products and boasts the ability to develop and deploy both PowerBuilder and Java components in the EA Server. The product adds Enterprise Java Beans components to its existing Common Object Model (COM)/DCOM and CORBA development capabilities, as well as Web site and page development tools, and is focused on creating highly scalable, Web-enabled applications, particularly in the area of electronic commerce.

The past two years have seen significant erosion of PowerBuilder's product license revenue and developer base, in part because of the changing technical environment and in part because of Sybase's overall financial and management problems. Though precedents do exist that demonstrate the potential of revitalizing PowerBuilder to become once again a market-leading product. For example, Fort_ Software, a long-time leader in the enterprise distributed computing market, emerged from its two years of doldrums spent reworking the architecture of its highly proprietary development environment and has found a new focus as e-business infrastructure. The company introduced a new Java-based development environment and has made such strong progress that it is now being acquired by Sun.

So the question remains, can PowerBuilder's (and PowerJ's) technical advances stem the tide of declining license revenue and significantly contribute to Sybase's revitalization? The early returns are not promising, but the Internet Application Division management team remains optimistic.

One continuing area of strength and renewal for PowerBuilder is the breadth of its developer and partner base. Although there have been some defections, enthusiasm is high, and new applications are being developed regularly.

One positive aspect for this community is the development and deployment alternatives offered by the expanded Sybase product. Multiple platforms, multiple tiers, and multiple languages and component models offer the opportunity to support a wide range of solutions. One disappointment, though, as noted by Sybase management, was the inability to significantly revitalize the modeling tool, PowerDesigner, and recapture market share. Sybase has reaffirmed its commitment to the product and its intent to give it greater focus in the coming year. The addition of a strong modeling product would cement Sybase's position as a viable competitor to both Microsoft's and Oracle's development products.

Mobile and Embedded Computing Division
Sybase was early to identify and respond to the opportunity for DBMS products to support the emerging mobile market. The strong marketing and engineering combination of the division keeps the Sybase name prominent with new platform initiatives even as the engineering effort rolls out beta-test versions and then final products. The competition is getting stronger because other vendors now have recognized the opportunity and are beginning to roll out their solutions. But Sybase continues to be the one to beat, with a 55 percent market share of the mobile DBMS new license market in 1998, as shown in Figure 5. The division has a clear road map and consistently delivers as planned, including an increase in the percentage of revenue captured through the channel.

Figure 5
1998 Share of Mobile DBMS Market for New License Sales

Source: Dataquest (September 1999)

In April, Sybase shipped SQL Anywhere Studio 6.0.2, which included the UltraLite technology. UltraLite requires a C or C++ programming environment for the target handheld platform and allows developers to deliver database functionality to Palm and Windows CE devices. Creating UltraLite applications requires either Mac OS or Windows NT-based Code-Warrior 5.0 development tools from Metrowerks for the Palm platform or Microsoft's Windows-only Visual C++ 5.0 development tools for Windows CE 2.0 devices, with a MIPS, x86, StrongARM, or SH-4 processor.

In generating a customer database engine for a handheld application, UltraLite includes only the features required by the application, so that it occupies a small footprint-50KB to 350KB-depending on the amount of embedded SQL code in the application. UltraLite's MobiLink synchronization technology is designed to work with Adaptive Server Anywhere, but it also works with other SQL databases that comply with the open database connectivity (ODBC) standard. Sybase provides customizable scripts for added connection support for Sybase's Adaptive Server Enterprise, IBM's DB2, Microsoft SQL Server, and Oracle's Oracle 8i. Future scripts will smooth the process of synchronizing with enterprise resource planning application data and will support various application server products.

SQL Anywhere Studio 6.0.2 expanded its platform support to include Linux. The product contains the tools necessary to manage mobile and embedded data applications that leverage the Linux platform, an advantage Sybase believes it has over other Linux DBMS implementations. The 6.0.3 product currently supports Red Hat Linux 5.1, 5.2, and 6.0 but does not support Caldera's OpenLinux. Other supported platforms include Solaris, AIX, HP-UX, NetWare, OS/2, Windows 3.x, Windows 95/98, Windows NT 3.51 or later, Palm OS, and Windows CE. The division's major announcement at TechWave '99 was its e-Anywhere strategy, which promises an architecture that will simplify the development, deployment, and management of browser-based and nonbrowser-based applications. Sybase is promising to further address the following three technology areas:

• Enterprise synchronization and distribution-Sybase currently provides a synchronization platform that enables automatic exchange of information between mobile and embedded devices and corporate networks via MobiLink. The plan is to extend this platform to provide a direct connection to ODBC sources, including the leading DBMS products. Also planned is Secure Socket Layer support and support for wireless communication and synchronization over Hypertext Transfer Protocol (HTTP).
• Small footprint, local data store-SQL Anywhere's next major version, code-named Aspen, will include an object linking and embedding (OLE) database driver, graphical stored procedure debugger, support for Microsoft Transaction Server, dynamic cache sizing, and index optimizations. A Java version of UltraLite will be offered to appeal to the Java developer community. The Aspen release is expected to enter beta by the end of 1999.
• Customizable applications-As part of a new jump-start program, application templates will be provided to developers to speed the development of mobile solutions. The program will also provide education and consulting to help with project definition, design, and development. The Sybase Developer Network is part of the program, and the Mobile and Embedded Computing division had already registered 6,000 developers in the first half of 1999. The first set of application templates was announced at SAP's 1999 Technical Education Conference the week following the Sybase conference. Sybase and SAP announced that they are developing a set of customizable applications integrating SQL Anywhere Studio with SAP R/3. These applications will enable handheld or wearable Internet appliances to interoperate and interact with mySAP.com solutions. Evaluation versions of the first two, of what is expected to be several, applications were made available at the SAP meeting: Cross-application Time Sheets and Fixed Assets.

Business Intelligence Division
Contributing the smallest piece of the Sybase revenue pie (at 2 percent), the Business Intelligence Division, not surprisingly, is expected to show the fastest growth rate compared to its divisional brethren. Sybase has been slow to enter the business intelligence (BI) market, with its fellow DBMS vendors (IBM, Oracle, Microsoft, and even Informix) developing some sort of BI organization or thrust long before Sybase did. Although it came late to the party, Sybase has been very active in building its presence in the BI marketplace, announcing product enhancements, strategic partnerships, and even a company acquisition early this year.

Sybase's BI strategy is to focus more energy and resources on industry BI applications than on infrastructure. To this end, the company announced in February 1999 the acquisition of Data Warehouse Network, an Ireland-based provider of packaged, industry-specific BI applications. These packaged applications contain industry data models as well as a common physical database design. Combined with Sybase Warehouse Studio, the company's data warehouse solution, these applications are now marketed as Sybase Industry Warehouse Studio and form the cornerstone of the Business Intelligence Division.

Industry Warehouse Studio is an integrated solution that comes with the Warehouse Architect Design Suite, the Warehouse Control Center, Industry Data Models, and SQL. Industry Warehouse Studio physical databases can be implemented on any SQL-compliant relational DBMS (RDBMS), such as those from IBM, Oracle, Informix, Microsoft, NCR, and, of course, Sybase. Industry Warehouse Studio also comes with packaged customer relationship management (CRM) applications for campaign analysis, customer profiling, customer care analysis, loyalty analysis, and sales analysis. Each Industry Warehouse Studio product also includes industry-specific applications for business performance analysis, and profitability analysis. Industry Warehouse Studio is currently available for the retail banking, property and casualty insurance, life insurance, credit card, telecommunications, health care, and capital markets. Industry Warehouse Studio products for the utilities and retail sectors are in the pipeline.

On the infrastructure front, Sybase' Business Intelligence Division maintains development and marketing efforts to support its Adaptive Server IQ product. In February 1999, Sybase announced Adaptive Server IQ12, a high-performance database server engineered specifically for decision support environments. With Adaptive Server IQ12, Sybase introduces new IQ multiplexing technology, which enables scalability and very large database (VLDB) support for enterprise warehouse environments of large numbers of users and concurrent queries. In April, Sybase followed this up by shipping a version of its Adaptive Server IQ12-Multiplex for clustered Compaq systems. The software runs on Compaq's ProLiant and 64-bit AlphaServer computers and StorageWorks products based on Compaq's Enterprise Network Storage Architecture. It also works in mixed UNIX/Windows NT environments and can support multiterabyte databases.

The Business Intelligence Division has also been busy forging partnerships with other players in the BI market. Recent partnership announcements include a development and distribution agreement with Business Objects announced on June 14, 1999. One of the terms of the agreement is for Business Objects to provide Sybase's Industry Warehouse Studio customers with a five-copy bundle of BusinessObjects software for querying, reporting, and analysis. On the same day, Sybase announced a partnership with Lincoln, Massachusetts-based data mining company Unica. Under this agreement, Unica will provide data mining and campaign management software and services to complement high-speed database access provided by Sybase Adaptive Server IQ12.

On July 6, 1999, Sybase announced a partnership with Cognos to deliver a BI bundle with the Sybase Industry Warehouse Studio. Cognos' BI solutions will be bundled with the four applications for insurance, health care, telecommunications, and retail banking industries. In August, Sybase announced a major strategic partnership with SGI. SGI will be reselling Industry Warehouse Studio as well as IQ packaged with SGI services and technology. Also in August, Sybase and Columbia, Maryland-based Impact Innovations Group announced a strategic partnership and reseller agreement to provide BI solutions and professional services for the financial services, health care, insurance, and telecommunications industries. Under this agreement, Impact will offer customers a complete solution by installing, configuring, and customizing Sybase Industry Warehouse Studio solutions, Adaptive Server IQ12, and Adaptive Server IQ12-Multiplex.

Although the Business Intelligence Division can be considered a "start-up," it has accomplished a lot since its inception to build a presence in the BI market. This presence still has to be translated into revenue, however. What it needs now are credible, production reference sites for its Industry Warehouse Solution, not the legacy installed base from the Data Warehouse Network acquisition. Moreover, more definite and forceful articulation of how the Business Intelligence Division and its products fit into the overall corporate EIP strategy will go a long way toward convincing customers and prospects that Sybase is serious about its entry into the BI market. Overcoming these hurdles should translate into the Business Intelligence Division's gaining ground and moving up from contributing a mere 2 percent to the corporate coffers.

Services Represent More than Half of Sybase's Revenue
As Sybase looks to support customer solutions and move into providing support for the building of EIPs, the company's services offerings will become increasingly important. Within the organizational structure of Sybase, the Enterprise Solutions Division is responsible for all IT services offerings. Sybase organizes these offerings into the following three major groupings:

• Sybase Professional Services
  • Business solutions-includes business and IT consulting, application development, and IT architecture design
  • Technology enablement services-includes implementation and deployment, migration, systems management, performance improvement, and outsourcing
• Sybase Customer Service and Support-provides a wide array of interactive electronic support services and a choice of various levels of technical support, software services, and personalized support
• Sybase Education Services-includes skills assessment methodologies, authorized public and client-centric classroom instruction, certification programs, Web-enabled training, and self-study curriculum

In 1998, revenue generated from the delivery of Sybase IT services totaled $446 million. With overall revenue for Sybase totaling $867 million, IT services were directly responsible for 51.4 percent. In 1997 and 1996, IT services accounted for 47.9 percent and 40.1 percent of total revenue, respectively. Figure 6 illustrates the growing importance of IT services to Sybase's bottom line.

Figure 6
Sybase IT Services as a percentage

Source: Dataquest (September 1999)

Sybase Professional Services
Sybase Professional Services was created when Sybase purchased SQL Solutions in 1991. SQL Solutions, based in Burlington, Massachusetts, had a total staff of 60. Burlington remains the headquarters for Sybase Professional Services. In addition to organic growth, other acquisitions have played a role in the rapidly expanding scope of Sybase Professional Services offerings. The acquisition of Powersoft in 1995 brought new consulting capabilities, although the acquisition was not integrated into Sybase Professional Services organizationally. Also, the acquisition of Oasis Business Consulting in the same year and its subsequent integration into Sybase Professional Services added another set of skills. More recently, Sybase has been aggressively partnering with other application and professional services vendors (for example, Citadel and Sales Vision) to provide very focused end-to-end solutions.

Today, Sybase Professional Services has about 1,200 employees operating in 20 countries worldwide. The Enterprise Solutions Division is organized into three regions:

• North America
• Europe
• Rest of World

Each region is charged with the delivery of professional services as well as product sales. Additionally, all three regions implement both regional and worldwide solutions. Given the unique requirements and regulations found in some regions, it is necessary to develop regionally specific solutions. For example, Sybase participated in developing the Colorado Integrated Criminal Justice Information System, a project to integrate the data resources of Colorado criminal justice agencies. Because of the regulatory environment associated with this particular type of solution, Sybase created a regional specialty practice, the Criminal Justice Practice, to deliver similar solutions across North America. In addition to the Criminal Justice Practice, Sybase has created four other specialty practices focused on delivering specific, end-to-end solutions, either regionally or worldwide. Table 1 lists the five specialty practices, their solutions, and their geographic reach.

Table 1
Sybase Specialty Practices

As for the worldwide solutions, they are developed in Sybase solution centers at present to ensure the repeatability of the solution for specific vertical markets across all regions. Sybase has instituted an approval process to maintain a uniform level of quality for each solution generated by a solution center. Most of the services provided by Sybase Professional Services across all three regions fall under the technology enablement heading. As Figure 7 shows, technology enablement services accounted for 44 percent of Sybase Professional and Educational Services revenue in 1998, compared to 30 percent for business solutions and 26 percent for education services. Sybase is witnessing some renewed growth in its business solutions practice, gaining two percentage points after posting flat growth at 28 percent in 1997. This jump in business solutions revenue supports Sybase's strategy of developing the capabilities to deliver total business solutions, either in-house or through strategic partnerships.

Figure 7
1998 Sybase Professional and Educational
Services Revenue Distribution by Service Category

Source: Dataquest (September 1999)

Customer Service and Support
In January 1998, Sybase finally brought its Powersoft and Sybase service programs together with the announcement of SupportNow. In addition to providing a consistent set of offerings, the program also provided new benefits to Sybase partners, which received special pricing for development use licenses as well as discounts for reselling support to end-user customers when appropriate.

On October 13, 1998, Sybase premiered a new Web-based customer service and support option called MySupport that allows customers to personalize their electronic support. Using Sybase Adaptive Server Enterprise and Vignette StoryServer, MySupport allows customers to choose which products, operating systems, and other topics on which they want to receive updated information. The information available includes up-to-the-minute status of support cases and new bug fixes, as well as e-mail notification on chosen topics. Customization of the MySupport site also extends to sites and information sources outside Sybase. It is likely that Sybase will continue to leverage MySupport as many software vendors, such as Microsoft, have-incorporating ever more online resources onto the Web site rather than just technical support technical documents.

In terms of telephone-based technical support, Sybase fields a truly global support operation, with "follow the sun" capability. Sybase technical support is provided through support centers in Asia/Pacific, Europe, Latin America, and North America that will work together to provide after-hours support for customers entitled to it as well as providing emergency after-hours support. Calls received after regular business hours at a caller's local center are automatically routed to the next available regional support center, with complete call history information made available through a globally available history/tracking system.

For customers requiring technical support, the SupportNow offering provides a choice of four discrete fee-based support plans. Each of the four offerings provides access to MySupport, electronic offerings consisting of technical library access, electronic software distribution sites, newsgroups, and case logging for annual plans. The four offerings, all available globally, are as follows:

• Incident: This offering is for customers with designated workplace-level products who either did not plan to use technical support and so never purchased a plan in advance or for whom entitlement is not an ongoing requirement. The offering provides customers with technical support on a per-call basis, with a term of one year before expiration on a 10-pack of support incidents. Each incident is good for one discrete support question or problem, and the 10-packs are available for business hours only (uplifts are available for an additional fee). The offering includes no software upgrade but does include product maintenance service built within it. Subscribers do not receive their own Technical Library CD set, as they do in the three more comprehensive levels of service. The pricing is uniform globally, with attention to currency exchange rates. Customers may purchase this level of service either directly from Sybase or through resellers.

• Basic: The SupportNow basic plan offers entitlement to two customer contacts for business hours telephone support, with the option of emergency or scheduled after-hours access. Both this and the Incident Plan offerings target response to the customer within four hours or less for critical issues. Users also receive software services for new version releases and maintenance releases and may download upgrades and maintenance updates from a Web site.

• Extended: Extended support provides round-the-clock service using the follow-the-sun methodology. The responsiveness is superior to that found in the Incident or the Basic offerings, bringing the response time target to one hour or less for critical issues. The offering allows up to four contacts to telephone the support centers.

• Enterprise: Enterprise support covers the technical support needs of larger deployments. The offering is more comprehensive and includes six named contacts as well as round-the-clock service. The Enterprise plan has a minimum support fee of $25,000 for workplace-level products and $50,000 for enterprise-level products or mixed projects. Support is priced per product. Additional local contacts are $5,000, and global contacts are $6,000. Callers are placed in a priority queue, with response time targeted at one-half hour or less for critical issues. Callers at this level of entitlement receive expedited escalation to more senior technical resources as needed. Enterprise customers are also entitled to receive software updates and patches on a priority basis. This level of service includes the services of a technical account manager, who will ascertain the status of technical issues, work to coordinate and compile reports of customer activity, and in general serve as the customer's liaison within Sybase. The account manager will hold quarterly conference calls to discuss case activity, escalations, and ongoing support requirements. Options are available for the Enterprise program include deployment assistance, on-site support capabilities, and other highly customized service options, such as dedicated support resources (a dedicated account manager is $255,000 per year).

The product updates, included as part of all but the Incident service, allow customers flexibility to choose which upgrades they will deploy. Support services extend to the latest two releases: A customer whose software is one release prior to the latest release may still receive patched code in response to discovery of a code defect. Sybase technical staff will attempt to reproduce problems on the current or the immediate prior release, although the service engineers will endeavor to solve problems on any prior release currently supported. Enterprise customer requests are given a higher priority. Patches are rolled into the next maintenance release and fully tested and warranted at that point.

Sybase Education
Sybase has an extensive educational services program and claims to be one of the top 15 global leaders in IT training and education. The company offers basic and advanced classes from education centers in North America, Europe, Asia, Japan, Australia, New Zealand, and Latin America. On-site and specially tailored customer classes are also available. Combined with its worldwide network of Sybase Authorized Education Partners, Sybase Education delivers training in over 45 countries and 17 languages. Sybase Education Services also offers a menu of services including client-site classes, professional certification programs in multiple disciplines, customized software, training needs assessment and self-study, and Web-based courses. In late 1998, Sybase introduced a new education development and delivery methodology under the banner Next-Generation Learning Studio (NGL Studio). NGL Studio is built on Sybase's PowerBuilder, Adaptive Server Enterprise, and PowerDynamo. A demonstration of both NGL Studio and the Sybase Education Web-based learning objects and course modules can be accessed through the Sybase Education Web site, called the Sybase Learning Connection.

Vertical Market Focus
Sybase has implemented an extremely focused vertical market strategy targeted primarily at the financial, telecommunications, and public sector markets. To a lesser extent, the company is also targeting the health care and retail markets. In the financial services industry, customers include 68 of the top 100 global banks and 20 of the leading life insurance companies. Sybase provides technology to 125 of the top global telecommunications companies and delivers the underlying database technology for 70 percent of wireless switches and 40 percent of network switches worldwide. The company's health care customers include six of the top 10 managed care organizations in the United States and more than 350 health care organization worldwide. In the North American public sector market, Sybase supports solutions for integrated welfare, criminal justice, and transportation requirements in both local and national governments, as well as enterprise software infrastructure for numerous governments worldwide. For each vertical market, Sybase has structured a team of employees with expertise in sales, support, marketing, engineering, and professional services who are tasked with delivering repeatable solutions for a particular vertical market on a global basis. Members of this team also are deeply involved during the product sales cycle in order to satisfy a potential client's IT needs and concerns in an organized and expeditious fashion. Figure 8 presents Sybase's 1998 professional services revenue by vertical market.

Figure 8
Sybase Professional Services Revenue by Vertical Market, 1998

Source: Dataquest (September 1999)

One example of Sybase's commitment to providing Internet-based solutions to the financial markets is underscored by the work Sybase is performing for i-investglobal.com, a new market entrant. Based in the British Virgin Islands, the start-up company is developing a Web site designed to provide individuals with a personal finance portal in local languages that will market, sell, and distribute a proprietary family of mutual funds. It will also offer payment cards, life insurance, mortgages, and other retail financial products. This service will be targeted at individuals in developing countries. Sybase is providing i-investglobal.com with a turnkey solution that includes business and IT consulting, DBMS integration, and application development services. Together, i-investglobal.com and Sybase plan to work jointly on application development, cobranding, presentations, and white papers. If Sybase feels that this relationship is progressing favorably, the company plans to take a minority stake in i-investglobal.com. This plan represents a business model that Sybase expects to continue using in the future.

Partnering
In an effort to provide end-to-end solutions, Sybase has established a number of key strategic partnerships. It is important to note that most of the partnerships have been formed with companies that are well respected in certain market spaces but relatively unknown to the market at large. In other words, Sybase's interests lie more in developing tight relationships with companies that have deep expertise in highly focused market niches and not with companies that just happen to have a "marquee" name.

One of the primary drivers of Sybase's partnership strategy is to pair with companies that develop applications that can be easily integrated into Sybase's infrastructure and share a common data model. A perfect example is the partnership between Sales Vision and Sybase, under which Sybase resells Sales Vision's Jsales CRM application.

Sybase also has relationships with other professional services and hardware vendors in specific market niches, again to help augment its services and provide the client with a total solution. Sybase is interested in forming partnerships only with vendors that support the IT services it provides in the vertical markets it has identified.

Another main driver behind Sybase's partnering strategy is to choose partners with which Sybase can jointly develop and market applications. Sybase also has implemented a similar partnership model in which the company assumes a small equity stake in a vendor, develops an application with the vendor, and then jointly markets the application. The relationship between Sybase and Citadel is an example of this strategy.

Go-to-Market Strategy
The go-to-market strategy of Sybase is simply to focus on specific vertical markets where it can successfully and efficiently satisfy extremely focused customer needs through a combination of Sybase products and IT services. At the end of the day, Sybase wants to be the best partner for delivery of integrated business and technology solutions that maximize value and provide a competitive advantage to its clients.

Management Team Needs to Deliver Revenue Growth
In the fall of 1998, Sybase completed an executive management transition in which John Chen, who joined Sybase in August 1997 from Siemens Pyramid, replaced Mitchell Kertzman as chief executive officer and chairman of the board. In early 1999, Pieter Van der Vorst became chief financial officer. During the same period, the country managers in Australia, Switzerland, and Japan and the European general manager resigned or were replaced. As part of the move to divisions in January 1999, the company made the following appointments:

• Terry Stepien, senior vice president and general manager, Mobile and Embedded Computing Division. Mr. Stepien had previously worked for Watcom, which he joined in March 1992. Watcom was acquired by Powersoft, which was then acquired by Sybase in February 1995.
• Raj Nathan, senior vice president and general manager, Internet Applications Division. Mr. Nathan joined Sybase in November 1997 from Siemens Pyramid.
• Richard LaBarbera, senior vice president and general manager, Enterprise Solutions Division. Mr. LaBarbera joined Sybase in December 1997 from Siemens Pyramid.
• Eric Miles, senior vice president and general manager, Business Intelligence Division. Mr. Miles joined Sybase in December 1997 from Informix.

In April 1999, the company filled the key position of vice president of corporate marketing with the hiring of Pamela George from Maxager Technology (she had previously worked at Cisco Systems). She will have responsibility for corporate marketing programs, business operations, analyst relations, public relations, internal communications, advertising, creative services, and database, event, and Web marketing.

Mr. Stepien is the only Sybase manager with any longevity with company or product. Sybase does not have a lot of time before it must see revenue growth from its divisions. And although it will be critical that Sybase hold onto valued employees to execute on its vision, division managers should be held accountable for that execution and expected growth. Sybase needs to start to show revenue growth in 1999.

Dataquest Perspective
In many respects, Sybase has all the pieces to the puzzle in place. It is extremely focused on a select set of solutions, based on in-house core competencies, and has identified key vertical markets for these solutions. Moreover, Sybase is aggressively pursuing a partnering strategy that will enable it to provide end-to-end solutions and gain access to new markets and clients. That said, Sybase still needs to concisely organize and promote its go-to-market message for the various products and related IT services it offers. Sybase is aware of this issue and is launching a marketing campaign to address this problem head-on. The end product of this campaign should be a clear and concise message that explains the solutions and IT services capabilities Sybase is currently bringing to market. (On September 9, 1999, Sybase announced it has named Goldberg Moser O'Neill as its new worldwide advertising agency with the charter to help Sybase to work on its corporate branding.)

The EIP program provides a potentially strong unifying message for Sybase and an opportunity to leverage the strengths of multiple division into an industry-leading position. The company must continue to develop its message and clarify the unique value added by Sybase as well as by specific deliverables.

As other vendors jump on the mobile computing bandwagon with comparable solutions, Sybase could strengthen its position by providing application development tools focused on this space and fine-tuned for the Sybase products.

Source: Dataquest, October 14, 1999, Product Code:
DTMW-WW-DP9909.

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