from Kevin Benedict!
I received an interesting call yesterday from a Wall Street analyst. He wanted my opinion on SAP's acquisition of Sybase. His premise was that there was not $5.8 billion worth of value in Sybase. I responded that I had no expertise in valuation so could not help him in that determination. However, I did have more than enough opinions on enterprise mobility to share.
I provided him the following list for his consideration during his valuation exercise:
1) Had he looked into the potential value of Sybase's 365? I said much of the world, and the fastest growing segments of the mobile market (LDC - less developed countries), are increasingly using SMS for mobile banking, money transfers, mobile payments, and many enterprise applications
like field services, inventory, database queries, sales reports, etc. He had not considered this.
2) Had he looked into the value of Afaria? I said iAnywhere acquired Afaria before the market recognized the need. However, nowadays the market need is rapidly growing and IT organizations know it, because of the plethora of mobile devices, mobile operating systems and different versions of mobile operating systems. In addition, the popularity of mobile smartphones, and the fast evolving mobile commerce and mobile money usage are making them attractive targets for hackers and criminals.
3) Had he considered the pent-up demand for mobile applications within large enterprises? I told him that people I know within Sybase are being worked to death because of the demand to meet with SAP customers. I told him about SAP's goal to touch over 1 billion people by 2015. I said today around 5 percent of an SAP customers' employees use SAP, but the goal is to dramatically increase that through mobile devices. I asked him if he had thought about the impact on the sales of SAP user licenses.
4) I suggested he investigate the in-memory technology and its impact on mobile applications. I shared that business intelligence reports that once took hours can now be completed in seconds. I shared how this makes complex reports available to mobile devices of all kinds.
5) I shared that if the Sybase Unwired Platform development now occurring helps third party mobile application vendors better support SAP, then it will also become a more attractive platform for companies wanting to not only support SAP but Oracle and
6) I suggested that he consider how SAP is moving forward aggressively with mobility and bringing order to chaos, unlike Oracle which remains in the middle of mobility chaos. I painted a picture of what an ordered mobility world in the SAP ecosystem might look like over the next 12-36 months and contrasted that to a world without order.
7) I shared Jim Snabe's quote that "mobile applications are the new desktop." I explained that in the future mobile devices (smartphones, wireless laptops, tablets) may even become the standard method of integrating with an ERP. Combine the power of mobile devices, in-memory computing, SaaS models, and it is an entirely new world. I explained that SAP was aggressively architecting this new world and this could potentially be a major competitive advantage for them.
8) I asked the analyst if he had considered the sales impact of having thousands of SAP field sales people championing mobility. I said Sybase/iAnywhere had relatively small field sales and professional services teams prior to the acquisition. I suggested he think through the impact of suddenly adding thousands of resources and SAP's marketing dollars/euros.
This morning I realized I should have spoken more about the potential value of the mobile SDK. If done right, the mobile SDK can revolutionize enterprise mobility. It can permit both IT organizations and systems integrators to develop a wide range of additional custom mobile applications that could add SAP user licenses.
I should have also highlighted the successes this year of SAP's mobility partners like Syclo, ClickSoftware, Smartsoft Mobile Solutions (SAP services partner) and Sky Technologies. All of these companies have experienced phenomenal growth in 2010 and this will ultimately add SAP user licenses.
After our conversation, the analyst seemed to have a much broader understanding and appreciation of enterprise mobility and the potential value of the Sybase acquisition. It may be useful for SAP to highlight the potential of the ten points listed above and add supporting market forecast numbers to each to help paint the clearest vision possible for analysts and customers.