An intriguing analysis of SAP's partnership with Sybase

Last November, I wrote a short article on SAP's partnership with Sybase to bundle its database with SAP's Business One offering to small businesses. Now Josh Greenbaum, writing for Datamation, provides a more in-depth analysis on what the SAP/Sybase combination means in terms of competition with Microsoft for small business market share.

Greenbaum recounts the history of Sybase's missteps in the database market, first in the 1980s by licensing a desktop version of its SQL Server database to Microsoft and later in the 1990s by rebuffing the overtures of SAP, which was looking for an alternative to Oracle's database, since Oracle was starting to compete with SAP for application software. Against this backdrop, Greenbaum goes on to analyze Sybase's current opportunity with SAP:

It may be a classic case of too-little, too-late. But I think it may give Sybase a much-needed chance for revenge and redemption.

One reason this may work is that SQL Server isn't always the database of choice for Microsoft's flagship Axapta enterprise software. Developers worldwide know that big Axapta projects can tax SQL Server's scalability limits -- forcing these partners and their customers into the relatively expensive hands of Oracle. A lower-cost Sybase alternative tied to SAP's software and reputation could make Business One a viable competitor to Axapta and the rest of the Microsoft Business Solutions product line.

Another reason is that SAP is actively courting Microsoft partners, many of which are feeling pressured to support Microsoft's attempts to use pricing as a way to compete with SAP. This policy has resulted in lower revenues for a Microsoft partner network made up of relatively small companies that have been punished by the recent recession and lack the financial resources to absorb a large number of low-ball deals. These partners may be heartened by the prospect of being able to compete on price with Microsoft without killing their profit margins.

The final reason that this might work is that SAP will now be in the position to offer Business One on Linux, something that was impossible when SQL Server was the only database Business One supported. This may be the big redemption play for Sybase: aiding and abetting the Linux market, particularly as a replacement technology for SQL Server, could mean sweet revenge for Sybase's past errors.

That last point is particularly intriguing: a small business enterprise system with no Microsoft application software, no Microsoft database, and no Microsoft server operating system.

Read Greenbaum's whole article.