Sybase CEO looks to eschew move toward SaaS

09.08.2006
Sybase Inc. is regaining ground in the database market. Propelled by last summer's launch of Version 15 of Adaptive Server Enterprise (ASE), Sybase's database license revenue for the second quarter grew 22 percent over the prior year -- the fastest rate in the past 12 years, according to CEO John Chen. But there's more: At a time when many enterprise software vendors are looking to reinvent themselves as Salesforce.com clones, Chen wants to turn Sybase into an old-school channels powerhouse, a la Microsoft.

In an interview at Sybase's annual TechWave conference this week in Las Vegas, Chen expounded on that plan, as well as why the vendor's push into data integration doesn't threaten Informatica Corp. or IBM's Ascential lineup -- at least for now.

Excerpts from the interview follow:

In the second quarter, 46 percent of your revenue came through indirect sales. Will indirect sales make up the majority soon? When I started, 20 percent of our sales were indirect. I would love to be 75 percent indirect, 25 percent direct, though it's not our stated goal inside the company. Because what Sybase is really good at is building technologies, creating [intellectual property]. What we don't do as well is go into hand-to-hand combat with the big boys, who have more salespeople than my entire workforce.

We do want to keep our direct enterprise customers happy. To do so, we want to stay like a limo driver, not a taxi driver. Meaning, we don't meter you for everything. Oracle, they charge you for everything they do. Maybe they can get away with it. But we train our people not to say, "What's changed?" when a customer has a problem, as if it were automatically the customer's fault, even though nine times out of 10, they did change something.

But even Microsoft is getting a lot of pressure to explain how it will fit into an industry that is supposedly moving toward a software-as-a-service model. If that's happening, why go back to a channels model? The interesting thing about running a business is that nothing is absolute. Given what I think Sybase excels at, we can improve our margins and expand our reach by expanding channels today. And next year. And the year after that. Everything you mentioned about SaaS -- there's no money in it now.