Corporate software makers SAP and Sybase are teaming up to make it easier for business users to access SAP's software on mobile devices such as Apple's iPhone.
SAP, which is the world's biggest maker of business management software, is already working with Research In Motion to develop applications for the BlackBerry. But now SAP says it will extend its software to other devices like the iPhone.
Sybase, which provides database software to large companies, already sells programs that let users access corporate applications and information on their mobile devices. But now it says it will work closely with SAP to customize the software.
"It's true we can already get you to SAP on mobile devices," John Chen, chairman, CEO and president of Sybase, said during a press conference in New York City. "But it doesn't work very well. It is very clunky. We need to get with the SAP engineers to make sure that the experience will be a rewarding one for customers."
Initially, the companies plan to focus development efforts on the iPhone, RIM's BlackBerry, and phones running Microsoft Windows Mobile. But eventually they will provide support for other mobile platforms.
Bill McDermott, president of Global Field Operations for SAP and a member of the SAP executive board, said during the press conference that SAP sees big opportunity for taking its business applications mobile throughout the world. The goal is to help companies make their workforce more productive while away from the office. He said many companies have already started coming up with their own solutions. But the work with Sybase will allow SAP to offer a solution that is easy to implement.
"The big breakthrough here is that we are offering this solution out-of-the-box," he said. "We are handling all the integration for you."
Smartphones are the fastest growing segment of the mobile phone market. And devices, such as the iPhone, have made consumers aware of how applications and software can be used on a mobile device. Apple has also made it easy to purchase and download applications through its App Store. Other companies such as RIM, Microsoft, Google, and Nokia, have followed Apple's lead and are launching their own application stores.
It's little surprise that corporate applications would be bubbling to the top of the list of applications users are interested in, especially as people's work life and home life become more intertwined.
Correction: Sybase reported a 13 percent increase in license revenue, based on constant currency.
Update at 7:49 a.m. PST, with comments from the conference call.
Sybase posted fourth-quarter results on Wednesday that sailed past Wall Street's earnings expectations.
With earnings driven by strong growth in its core database business, company shares jumped 7.8 percent to $27.87 in early-morning trading.
Revenues during the quarter rose to $305.1 million, up 3 percent over the same time a year ago. Wall Street was expecting the enterprise software company to make $300.3 million, according to Thomson Reuters.
Sybase reported net income of $47.3 million, or 59 cents a share, compared with net income of $73.5 million, or 81 cents a share, a year earlier.
When excluding one-time charges and special items, the company posted earnings of 78 cents a share, soundly beating Wall Street's expectations of 61 cents a share, according to Thomson Reuters.
"They really blew it out this quarter, " said Terry Tillman, an analyst at Raymond James & Associates. "The theme for them is, they have the right kind of products in this type of market. Their database had one of the strongest product cycles in a decade."
Sybase posted a 38 percent increase in database sales, as customers continued to spend on such enterprise software as their data capacity needs continued to grow, despite recessionary times, noted Tillman.
He also noted that customers have been increasingly responding well to efforts Sybase has made in retooling its database, which began in late 2005. The company's Advanced Server Enterprise 15, otherwise known as ASE 15, has gained traction, and Sybase has taken advantage of its database with additional features to sit on top of the software, such as analytics.
Tillman noted that business intelligence software is performing well in this recessionary climate, as customers are particularly eager to gain insight into their own businesses.
John Chen, Sybase CEO, said during the conference call: "Clearly, we are taking share from our (database) competitors with these results."
During the quarter, Sybase reported that new licenses grew 8 percent to $122.1 million, compared with a year ago, when accounting for changes in currency. Based on constant currency, that figure rose 13 percent for the quarter. Investors tend to keep a keen eye on new license revenue because it serves as an indicator for future business in other parts of Sybase, from tie-on products and services to maintenance and support.
Sybase also provided guidance for how it expects to perform throughout 2009, a move that many companies are shying away from in these tumultuous economic times, as customers' orders are becoming increasingly difficult to predict.
The company expects to report revenues of $1.14 billion and earnings, excluding charges and special items, of $2.16 to $2.21 a share for 2009. The revenue forecast is slightly below Wall Street's expectations of $1.16 billion but higher than analysts' predictions of $2.14 a share.
"Customers are still buying and spending, but they're highly selective," Chen said. "While they are less willing to spend on professional services, they are still willing to spend on mission critical applications."
Some of those critical enterprise software applications include security software, real-time reporting, and risk management business intelligence software.
Chen noted, however, that sales cycles have been a little bit lengthened.
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