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.