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IBM deal could be Sybase's last stand

Sybase and IBM are joining forces to increase their stake in the Linux market, a move that could be Sybase's last chance to maintain a presence in the database market.

In an attempt to boost its share in the booming Linux market, Sybase Inc. is integrating its Adaptive Server Enterprise with IBM's eServer OpenPower platform.

Sybase's database management software will be bundled with IBM's OpenPower platform and made available to customers early next year. The two software makers will also jointly sell and market the combined offering.

The partnership is essential for Sybase if it wants to have a number of successful implementations on Linux platforms.
Noel YuhannaSenior Analyst, Forrester Research Inc.

IBM's eServer OpenPower servers are designed and tuned specifically for Linux environments. Developers from IBM and Sybase are also joining forces to build a new compiler and improve performance and tuning for the bundled software, said David Jacobson, senior director of database and tools marketing at Dublin, Calif.-based Sybase.

Sybase and IBM will look to make their mark first in the financial services market, Jacobson said.

"A great deal of our customers are in the financial industry," he said. "Financial firms lead the pack in adoption of new technology, and they're moving from Unix to Linux machines to take advantage of lower price points."

Sybase's database software sales have struggled to keep pace with IBM, Oracle Corp. and Microsoft. The joint venture is designed to take aim at Oracle, which has become the leader in sales of its database software on Linux in recent years.

The IBM OpenPower server was introduced in September. It uses the new Power5 processor, which runs the open source software.

Jacobson said OpenPower 720 caters to small and mid-sized businesses as an alternative to higher priced entry-level Unix and Linux systems. IBM has been battling Sun Microsystems Inc., which sells the UltraSparc processor for Unix systems, and Advanced Micro Devices Inc. for a larger share of the Unix and Linux markets.

But the partnership is even more important for Sybase as it attempts to stage a comeback against its competitors. Despite being the first DBMS on Linux, Sybase has struggled to maintain its stature in the market, said Noel Yuhanna, a senior analyst at Cambridge, Mass.-based Forrester Research Inc.

"The partnership is essential for Sybase if it wants to have a number of successful implementations on Linux platforms," Yuhanna said. "Linux is still maturing and customers want more partnerships to ease integration and have a more reliable platform."

Sybase needs to convince prospective customers that it's not fading away, Yuhanna said. The company is not releasing its customer numbers on Linux, instead pointing to thousands of downloads of the free version of its Linux-based software that was released in September.

However, analysts point out that Sybase's free Linux version is too limited to work in a production environment. The free license limits customers to one processor and 5 GB of data storage, but allows users to build, test and deploy new applications with no license fee.

"Customers are waiting and watching to see whether Sybase sill remains a top DBMS for their platforms," Yuhanna said. "Sybase has a very long presence in the Linux market, but they're losing the battle to the other players, and now they're facing further competition from open source databases."

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