Sybase to rent analytics Web app for high-speed stock trades, says CEO

Sybase Inc. celebrated its 25th anniversary in November. The enterprise software company is a survivor: it faced near-bankruptcy in the late 1990s, and a challenge in 2008 from a dissident investor who sought to break Sybase apart.

Today, Sybase is on a roll, with its stock price doubling in the past year. Wall Street loves Sybase for enabling high-speed stock trades, while other enterprises are using Sybase to get a grip on their iPhones, longtime CEO John Chen told Computerworld .

The following is an edited version of an interview with Chen late last month.

Your stock was in the 20s last year. In October, it peaked at $42.57, the highest it's been since January 1995. Besides Sybase's revenue growth, how much credit do you give to the $300 million stock buyback that the hedge fund, Sandell Asset Management, pushed you to do? Not much at all. We still have 82-83 million shares outstanding. This whole Sandell thing was a distraction. Whatever. It's not about buybacks or other mathematical gimmicks. You have to execute well and you have to be able to grow revenue.

But couldn't their threat to launch a proxy fight with you have inadvertently helped tell the story about Sybase being undervalued? No. We've had that story out for a very long time ... They missed the big picture. Had I done what they asked us to do [break apart Sybase] -- which at the time I knew was wrong, because the synergies get completely broken apart -- you wouldn't see our results today.

Last question about that M&A-fueled era: I wrote an analysis back then that said Sun Microsystems should've bought you rather than open-source database vendor, MySQL. How close was that to happening? I can't comment on that.

But you did hire Merrill Lynch, so you were looking at deals? No, we hired Merrill Lynch to help us acquire firms.

Let me follow up on that. Sybase IQ is one of the more popular data warehousing analytics apps. Yet, many data warehousing startups argue that they've got better scale-out technology for massively parallel systems. Would you acquire here in order to augment Sybase IQ? I haven't seen any benchmarks proving their claim. Sure, on the high end, Teradata can probably scale better than us, but they are $10 million a pop. We do have our own internal project to build a lot of parallelism into IQ. We're working very hard to scaling it upwards and make it highly available.

If that doesn't get anywhere, and they can prove that they are faster and more scalable, then I would be interested in acquisitions.

Independent analyst Merv Adrian is one of your biggest cheerleaders. But in his blog, he called Sybase a "tier 1.5 database vendor." Agree? It depends on the vertical that you're talking about. In China, we are number one. In U.S. government and military, we do well. In finance, we are obviously a top player.

I've heard about your real-time analytics apps for Wall Street. Yes, our complex event-processing (CEP) software for risk platforms. The financial vertical is so excited about it, they are turning into design partners. They want to handle both structured and unstructured data in a more real-time basis.

Was this how you were able to grow despite all of the bank failures we've heard about in the past year and a half? The funny thing is that although there were bank and brokerage failures, trading volumes never subsided. The algorithms behind the trades are getting more sophisticated. We sold lots of IQ systems to do counterparty risk analysis ... not only the United States and Western Europe, but in China, where the firms tell me they don't want to repeat the mistakes the United States made.

Are you worried that the Securities and Exchange Commission will rule that real-time trading systems like these give big firms an unfair advantage over smaller investors and should be outlawed? No, because everybody can buy one.

Well, anyone with a certain amount of money. It's not that much money. And pretty soon, we will be releasing a hosted solution. Even small hedge funds will be able to come in and rent time. We are releasing it by June next year. It will cost about $37,000 a year, or 25% of the license cost.

You talked about how well Sybase IQ is doing. SQL Anywhere is, according to one of your competitors, the "dominant lightweight database". Based on that, and how well Microsoft and IBM are doing in the database market, do you think Oracle's acquisition of MySQL should not be held up for being anti-competitive? Oracle is saying, 'Hey all of these other guys are doing so well.' In the short term, it is probably a pretty good argument. On a long-term basis, today's small company could very well be tomorrow's big company. So this needs to be analyzed.

You recently told a newspaper that IBM was the competitor you respected the most. Why? They're steady, and they never go away. We compete and partner with them. On the latter, IBM is a company of high integrity, which I respect.

What are your predictions about the adoption of mobile devices such as phones and netbooks by enterprises? Two new features -- geo-location and near-field communications -- will generate limitless new applications. Data-intensive apps that know where are you, who are you, why are you there, etc. We're very excited. Even if the markets stay bad, we think growth is still going to be in the 10-20% range. In a good market, that will be even higher, because in the enterprise alone adoption will be doubling.

You just released iPhone compatibility for your Afaria enterprise management product. How popular is it? We had a deal two quarters ago where someone literally bought 1,000 licenses in Europe just for managing their iPhones. We have other customers talking about buying hundreds and hundreds of licenses.

I can tell you that a lot of people here at Sybase run their business using an iPhone. We are able to provide executive dashboards, route purchase orders, device management ... We are testing a CRM module for SAP to run on the iPhone and Windows Mobile by Q1 next year. Other modules like ERP will also come in 2010. So there's an awful lot that businesses can do securely with an iPhone.

Apple recently cooperated with AT&T on some ads to defend against Verizon's advertising. Have you and Apple ever talked about cooperating formally to target iPhones in the enterprise? We are doing an awful lot together already. Their field salesforces are introducing Afaria to their corporate accounts, and our engineering staffs are well-coordinated.

As the "unwired enterprise" continues to evolve, what kind of new products might you be creating? Things like enabling collaboration or social networking during conference calls ... Say you'll be able to click once, call and share data with you on a real-time basis while we're both on a conference call on our devices. This will be seamless. There are people working on technology that will automatically transfer the conversation you were having on your cell phone on to your IP-based phone as you walk to your office desk. Basically, communication and computing are going to be inseparable. Look at HP buying 3Com , or what Cisco says it's going to do in the server business.

Let's turn to China. You serve on a few corporate boards like Disney, and you are often asked to advise American companies on how to do business in China. What's the best insider advice you would give them? Two things. Customer satisfaction and reputational integrity is one. Because like everyone else, Chinese consumers and businesses want to buy from people they feel good about. And when they decide to purchase your service or equipment or software or whatever, they really expect it to come together and work.

Number two, China is more interested in creating their own intellectual property than buying IP, though they know they have to purchase it now. That's why they want something more than a simple buyer-seller relationship. Help them or their company get up to speed on the latest technology ... U.S. customers want that, too, but it's even more critical in China.

You've been running Sybase for almost 13 years. How much longer do you think you'll stay CEO? As long as I still make progress and the shareholders want me to, of course. You know I'm quite intrigued where we are right now. We're early to a market -- mobile commerce -- that promises to potentially explode. So I don't have any immediate plans to not keeping doing this.

Copyright © 2009 IDG Communications, Inc.

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