Poor Financials Trigger Change at Sybase

After failing to live up to predictions of renewed vigor last year, Sybase Inc. is trying to regain the confidence of database buyers by overhauling its sales force and targeting a trio of application niches.

After failing to live up to predictions of renewed vigor last year, Sybase Inc. is trying to regain the confidence of database buyers by overhauling its sales force and targeting a trio of application niches.

Sybase began implementing the changes this week, just days after disclosing that its fourth-quarter financial results will be well below expectations. Included is the formation of a sales team dedicated to finding new users -- something that hasn’t been easy for Sybase to do after a US$79 million loss in 1996 and four straight quarters of declining revenue during 1997.

Even some users who have signed on with Sybase didn’t do so with entirely glad hearts. For example, Private Healthcare Systems Inc. "absolutely had our trepidations about Sybase," said Lisa Thompson, vice president of business systems at the Waltham, Massachusetts, managed care services company.

The application that Private Healthcare wanted runs only on Sybase. The company might have chosen a different database "if we had another application vendor that came anywhere near as close functionality-wise," Thompson said. "But there weren’t any [comparable] Oracle or Informix systems out there."

Sybase’s failure to meet its rosy fourth-quarter outlook "is certainly disappointing," Thompson said. "We’ll have to keep an eye on them." But weak results appear to be par for the course for database vendors right now, she added.

Indeed, the shortfall at Sybase is just the latest example of how the Big Three of the database world are struggling with a maturing market and the shift of user priorities to packaged applications.

Market kingpin Oracle Corp. in Redwood Shores, California, has managed only single-digit database growth in the past two quarters. And Informix Software Inc. in Menlo Park, California, has lost money in three straight quarters and was forced to restate its revenue back to 1994.

Sybase hoped to get back on a growth path after shipping a bumper crop of new products last fall. But fourth-quarter revenue is now expected to be as much as 8 percent below plan, and officials at the Emeryville, California, company said it will either report a slim profit or a small loss.

Sybase CEO Mitchell Kertzman said the company is having “to swim upstream a little more than we thought we would” because of the general sluggishness in the database business. But he also blamed the fourth-quarter showing on poor execution within Sybase’s North American sales force.

Another sales change being made is a shift of sales support workers into active selling jobs, Kertzman said. And marketing is being focused on mobile computing, the Internet and data warehousing.

Renewed growth and bigger profits are "something I definitely want to see "from Sybase, said David Usery, chief information officer of a big criminal justice systems integration project for the state of Colorado. "I’d like them to be around so our technical direction gets supported."

"I thought Sybase had turned the corner and momentum was building," said Michael Heaney, database administrator at The Institute for Genomic Research in Rockville, Maryland. "But you have to consider what else is going on around the database world."

Sybase "isn’t going away, and we’re certainly not switching [vendors]," Heaney said. The institute, a nonprofit genetic research facility, began upgrading its database servers to Sybase’s new Adaptive Server Enterprise 11.5 software last week.

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