SAP co-CEO defends price of Sybase deal

The vendor is set to pay $5.8 billion for Sybase, an amount some analysts say is too high

Contrary to the opinions of some analysts, US$5.8 billion is not too much for SAP to pay for mobile and database technology vendor Sybase, SAP co-CEO Bill McDermott said during a press conference at the Sapphire conference in Orlando on Monday.

"Exceptional assets don't come cheap," McDermott said. "This gives us the number-one position in mobility. I believe, as does [co-CEO Jim Hagemann Snabe], that the new desktop is the mobile device. ... This is a dynamite transaction for both sides and we’re very, very confident it will play out that way in the marketplace.”

The $5.8 billion offer represents a 44 percent premium over Sybase's average stock price over the past few months, according to SAP. Some observers have speculated that the seemingly rich sum is meant to fend off counter bids from rivals, with Hewlett-Packard a favorite guess.

Once completed, the Sybase acquisition will increase growth "from day one," said McDermott, who indicated that major cost-cutting and layoffs aren't on the table. "It's very important that the Sybase people understand this is about growth, customer satisfaction and expansion of the SAP ecosystem," he said.

Apparently alluding to SAP's highly acquisitive rival Oracle, McDermott said the Sybase deal "will not be like some of the other acquisitions ... in the northern California area" where "people have been demoralized."

There will be "no change to the way SAP goes to market" following the Sybase acquisition, even as it gains a broader portfolio of technology, according to McDermott. "We are totally open to the ecosystem. We don’t believe in lock-in. We don’t believe in stacks," he added, making another apparent allusion to Oracle.

This year's Sapphire event is happening simultaneously in both Orlando and Frankfurt. SAP is hoping the show can help shut the door on a couple of rocky years marked by flagging sales and loud customer discontent over a support price increase, as well as serve as a launch pad for a wave of promised innovation.

Join the PC World newsletter!

Error: Please check your email address.

Tags databasesmergers & acquisitionsSAPsybaseCEOs

Struggling for Christmas presents this year? Check out our Christmas Gift Guide for some top tech suggestions and more.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.

Chris Kanaracus

IDG News Service

Most Popular Reviews

Follow Us

Best Deals on GoodGearGuide

Shopping.com

Latest News Articles

Resources

GGG Evaluation Team

Kathy Cassidy

STYLISTIC Q702

First impression on unpacking the Q702 test unit was the solid feel and clean, minimalist styling.

Anthony Grifoni

STYLISTIC Q572

For work use, Microsoft Word and Excel programs pre-installed on the device are adequate for preparing short documents.

Steph Mundell

LIFEBOOK UH574

The Fujitsu LifeBook UH574 allowed for great mobility without being obnoxiously heavy or clunky. Its twelve hours of battery life did not disappoint.

Andrew Mitsi

STYLISTIC Q702

The screen was particularly good. It is bright and visible from most angles, however heat is an issue, particularly around the Windows button on the front, and on the back where the battery housing is located.

Simon Harriott

STYLISTIC Q702

My first impression after unboxing the Q702 is that it is a nice looking unit. Styling is somewhat minimalist but very effective. The tablet part, once detached, has a nice weight, and no buttons or switches are located in awkward or intrusive positions.

Latest Jobs

Shopping.com

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?