Acquisition is not simple

SAP -Sybase acquisition agreement

May. 16, 2010 10:04 AM

On May 14th SAP AG signed a definitive agreement to acquire Sybase Inc. for approximately $5,800 million. The offer price represents a premium of 44% over the three-month average stock price of Sybase and a premium of approximately 56.36% over the closing price of Sybase' common stock of $41.57 on May 11, According to the announcements by the two companies the deal, which follows a partnership for a significant time, is beneficial for both companies. I partially agree: It is very good for Sybase. However, I think that acquiring Sybase looks like a SAP's mistake.

What motivated SAP to acquire Sybase?
Previous SAP's CEO LEO Apotheker was replaced by Bill McDermott and Jim Hagemann Snabe due to conservative business approach. One of the significant results of this approach is few acquisitions. SAP's main competitor Oracle, is acquiring many companies in a relatively short time. So far SAP's significant acquisition was Business Objects a Business Intelligence infrastructure software provider, while oracle acquired ERP and CRM companies like PeopleSoft and Seibel, Infrastructure software leader BEA (Oracle's BEA Acquisition SOA perspective Revisited again), Infrastructure Hardware and Software vendor Sun (Vendors Survival: The Sun is red - Oracle to buy Sun First Take) and other applications and infrastructure vendor such as Hyperion and Golden Gate (The Golden Gate).

The new co-CEOs have to adopt a dynamic acquisition based policy. An acquisition of a large vendor like Sybase is a clear manifestation of a new policy.

Another major reason for Sybase's acquisition is Sybase's leading Mobile products.
Mobile infrastructure and applications as a significant part of Enterprise Architecture is a major IT trend. In order to compete in that segment SAP needs to integrate Mobile solutions to its Applications and Infrastructure. The partnership with Sybase marks it as a good candidate with leading Mobile products.

The third reason is Sybase's presence in the Financial vertical as an Infrastructure and Analytic solutions provider.

Published May. 16, 2010— Reads 1,550
Copyright © 2010 SYS-CON Media, Inc. — All Rights Reserved.
Syndicated stories and blog feeds, all rights reserved by the author.

▪ ESCO Announces Acquisition of an Energy Data Management Company

▪ Openwave Completes Acquisition of SoloMio

About Avi Rosenthal
Ari has over 30 years of experience in IT across a wide variety of technology platforms, including application development, technology selection, application and infrastructure strategies, system design, middleware and transaction management technologies and security.

Positions held include CTO for one of the largest software houses in Israel as well as the CTO position for one of the largest ministries of the Israeli government.

Enterprise Open Source Magazine Latest Stories . . .

That Boom You Hear Is the Cloud

By Patrick Burke

Cloud computing is creating the new Wall Street boom, according to NIA. The only industry that is as bright as cloud computing on Wall Street is social networking, NIA said in a recent report. 2012 will be known as the year cloud computing became widely adopted worldwide. Cloud comput...

Cloud Expo NY: How Pro Sports Teams Use Collaborative Decision Making

By Pat Romanski

The impact of Big Data is extremely broad for business, information management and technology. Being able to analyze your growing mountain of data can give you a distinct competitive advantage, but Big Data can be more than traditional tools can handle. In his session at the 10th Int...

What's Working, What's New, What's Next? | CTO Power Panel at Cloud Expo

By Pat Romanski

In this CTO Power Panel at the 10th International Cloud Expo, moderated by Cloud Expo Conference Chair Jeremy Geelan, industry-leading CTOs & VPs of Technology will discuss such topics as: Which do you think is the most important cloud computing standard still to tackle? Who should...

China Gives Google-Motorola Merger Conditional OK

By Maureen O'Gara

China’s antitrust regulators gave Google’s $12.5 billion acquisition of Motorola Mobility the nod Saturday provided Google’s Android operating system remains open and free-of-charge for the next five years. The “free” stipulation apparently doesn’t apply to applications or services...

Cloud Expo New York: Private PaaS for the Enterprise and Beyond

By Liz McMillan

If your organization already uses virtualized infrastructure, you are well on your way to providing IT as a Service. But as businesses demand faster results in today’s competitive market, organizations look to gain more benefits from cloud computing than just virtualized infrastructure...

Citrix Buys Virtual Computer

By Maureen O'Gara

Citrix has acquired Virtual Computer, a little Massachusetts outfit with enterprise-scale management solutions for client-side virtualization. It means to combine the acquisition’s NxTop widgetry with its XenClient hypervisor to create a new Citrix XenClient Enterprise edition that c...