Sybase still isn't in a SaaS-y mood

Vendor says software-as-a-service versions of its enterprise apps aren't in the offing

Despite the success of its hosted mobile messaging service, Sybase Inc. has no immediate plans to introduce software-as-a-service (SaaS) versions of the rest of its corporate software offerings.

The messaging service run by Sybase's Sybase 365 subsidiary is considered by analysts to be one of the most two widely used online services for managing the delivery of text or video messages to mobile phones, along with one operated by VeriSign Inc. The service, which Sybase acquired when it bought Mobile 365 Inc. last fall, delivered 19.5 billion messages and reaped $32.4 million in revenue during this year's second quarter, the company reported earlier this week.

Sybase now predicts that Sybase 365 will bring in total revenue of $130 million this year, up from an earlier forecast of $120 million for that unit.

Most of Sybase 365's customers are telecommunications companies, but some banks are also starting to adopt its technology, Sybase CEO John Chen said during a conference call on the Q2 earnings.

"I would say there is a lot of synergy, and some of this you are going to hear [about] at TechWave," Chen said, referring to Sybase's annual user conference, which is scheduled to begin Aug. 6 in Las Vegas.

However, Sybase doesn't plan to bring out SaaS versions of its other corporate software, including its Adaptive Server Enterprise (ASE) or SQL Anywhere databases -- at least not yet, according to Raj Nathan, chief marketing officer at the Dublin, Calif.-based company.

It's where we are going, but it's not on the front of our burner," Nathan said in an interview. "We haven't seen the customer demand for it."

Another reason for the current reticence, Nathan said, is that Sybase recently has been trying to cultivate more channel partners as part of a plan to increase indirect sales. The company's revenue is currently split almost 50-50 between direct and indirect sales, and Nathan said an aggressive move into the SaaS market could create conflicts with resellers. "Before we go [SaaS], we'd have to talk to our partners," he added.

Microsoft Corp., which is both a competitor and business partner of Sybase's, has confirmed that it is working internally on hosted versions of virtually all its software. In doing so, Microsoft is trying to minimize conflict with its channel partners. For instance, it is guaranteeing partners that support customers of its upcoming Dynamics Live CRM applications a 10% share of the subscription revenues.

In a separate development, Sybase has made available a beta release of the next version of ASE, which will include a shared disk clustering feature similar to the Real Application Clusters feature in Oracle Corp.'s flagship database.

The current ASE 15 software, which shipped two years ago, gained 273 new customers in the second quarter, Chen said. That number was up 18% year-over-year, he added.

Copyright © 2007 IDG Communications, Inc.

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