Fred Manhartsberger, Sybase's senior vice president and general
manager for Emea, dismisses rumours that the company could be
bought, insisting it is going from strength to strength. Roanna
Avison reports.
As the database market consolidates, some might say Sybase is in a
vulnerable position as the smallest of the big five. But Fred
Manhartsberger, senior vice president and general manager for Emea,
dismisses such remarks, claiming databases are not the key to its
business model.
While admitting Sybase may be at the bottom of the big five
database companies, he insists it is not really a database company.
"We still sell a lot of databases, but we normally sell them as
part of a system. We add it to what the customer has already
developed, whether they require additional databases to enhance the
system or are buying one because it is a key component of the
enterprise portal."
Open for business
Manhartsberger insists users do not
have to buy a Sybase database, because its products are compatible
with Oracle or IBM databases. "We have the interoperability to
peacefully co-exist," he says.
"Ever since the original Sybase SQL server, openness has been a
Sybase hallmark, unlike some of our competitors, which have closed
up the system as they've developed it," he claims.
"Being completely open does make it hard to sell. The customer asks
'what do I need?' so we ask them what they intend to accomplish.
Together we look at the business needs and what we can provide," he
adds.
Manhartsberger predicts no single company will dominate the
Internet as Microsoft has the desktop, but he suggests Larry
Ellison believes Oracle can control everything. "For an Oracle
system to work, you need to have the entire infrastructure on
Oracle," he argues.
His next target for criticism is IBM, which he claims makes $1,000
(£666.70) on product and $20,000 on services, but does not have an
out-of-the-box e-business infrastructure product. "It has to build
it on each occasion. You do not need to reinvent the wheel to such
an extent every time.
"IBM buying part of Informix adds $400m in support revenues, but I
think the main reason was to get at Oracle."
In response to speculation that Sybase could be the next database
company to be bought, Manhartsberger says: "I've been at Sybase for
eight years and there has never been a quarter when there has not
been a rumour about someone buying us. But nobody bought us when
our stock was $4.50 or $6.50, and now we're $16.50 I think our
valuation would be too high."
A balancing act
In 1999, Sybase split into four
divisions under what it called the Sierra strategy. Manhartsberger
thinks this has been key to its success.
"We realised we needed a reasonable balance between realistic
revenues expectations and expansion, so we took $100m out of the
cost base with the revamp," he says.
"The aim of Sierra was to obtain and maintain operating
profitability - we have just concluded two years of sustained and
improving profitability - and to demonstrate growth in-line with
the market in year three."
Manhartsberger adds that Sybase operates in a variety of segments,
so if, for example, the growth rate is 10% in one market, it
expects to grow at no less than 10%.
"We also set ourselves the target to grow more than 10% in 2000. At
a corporate level Sybase grew by 10.3%, but in the UK this was over
30%," he reveals.
For the past 18 months, Europe has been leading in terms of
revenues growth on a percentage basis and in terms of contribution
growth. "There are a number of reasons for this and the clearest is
that I'm here, but most people will not believe that,"
Manhartsberger quips.
On a serious note, he continues: "The biggest reason for Europe's
growth is that it
represents 30% he company's revenues, while the US is 50%. It's
much harder to grow a business of $600m than one of $275m.
"Europe's growth was 30% last year and I'm targeting 27% this year.
We're already finding it harder this year than last because of the
growth we have already sustained."
Each of Sybase's four geographies is responsible for handling
direct and selected partner transactions, but most also have an
indirect selling function for smaller customers, for which
Manhartsberger is responsible.
"One reason we've had success in Europe is because we are organised
on a country model, but we have a fairly well developed European
mechanism above those country operations."
The latest thing
Looking forward, Manhartsberger
expects the Internet to play a part, but perhaps not in the way
many expect. "It will be used to do the transactions that don't
need any input because they are so comfortable."
He points to Computer 2000 and Ingram Micro dealing with resellers
electronically: "There is not really a problem with this model when
there are no real issues and face-to-face contact would not really
add any value."
He admits there are some things that businesses would not want to
risk electronically, but "just because you don't do it now, doesn't
mean you never will".
"If you think about commerce through the ages, there has always
been some element of dealing with people remotely, so I can't see
why the Internet should be any different," he maintains.
"You only need personal contact for anything non-standard. After
six months, a year or five years, it will become standard and other
concerns will arise.
"If I have a knife, I want to make sure I have the best knife and
I'll put all of my focus on the knife. But then a fork comes along,
so I'm not worried about the knife because I know it, so it can go
electronically. Then all my attention will be focused on the fork,
until the spoon comes along."
He predicts that wireless will be an important issue when the
telcos have figured out how to make it work. "WAP has slowed down,
but when we see the convergence of GPS and WAP, we will begin to
see location-based services and m-commerce applications take
off."
But, he warns, it will be interesting to see how the telcos target
information. "In Japan, the teenage population is already
interested in getting a joke a day on their mobile phones, but that
just wouldn't work for US teenagers," he argues.
"The telcos have to find out what people will find compelling and
that is tough. I don't know what I would find compelling. "But
location services would be good, so if I use my Dutch phone and go
out for a walk while I'm staying in Stockholm, when it gets dark
the phone could direct me back to my hotel. Obviously, GPS would be
key to this."
But for Sybase, the real challenge remains to convince the market
that it is not vulnerable and has more to offer than just a
database.