If Mitchell Kertzman is the answer, what is the question? Easy, if you’re Sybase Inc chief executive Mark Hoffman. Why has everyone – especially Wall Street – fallen out of love with number two relational database company Sybase of Emeryville, California? Sixth largest independent software company in the world, over 6,000 employees world-wide, 25% market share in the US (although about half that in Europe), over 27,000 customer sites, and many of those prestige sites in world financial centers. Everything should be rosy in the Sybase garden, yet for some reason it can do no right by press or analyst right now. Back to the answer – no-one likes Sybase because it is bad at marketing. So fix that by making the ebullient former Powersoft power-house executive vice-president of sales and marketing, and hey presto, you get a new and improved $957m database company. Pardon us – we mean Internet, data ware-housing, database publishing and new workplace (desktop-remote site) leader, and thus a behemoth not at all to be compared with those other vowel relational database stalwarts Oracle, Informix, IBM (DB2/x) or (CA) Ingres.
Sybase gravity
That was the message from Hoffman et al on high this month, as the company gathered analysts and press to its bosom in a hotel in Waltham, Massachusetts, just a couple of miles from Kertzman’s crib (and a long way from the old center of Sybase gravity in Emeryville). A new Sybase with a new message was unveiled, all MC-ed by the admittedly personable former disk jockey Kertzman, and let us be among the first to unveil the tagline of Create. Integrate. Communicate as the battle cry for this somewhat ailing corporation. Is Sybase really ailing, though, or is it still just going through the speed bump analyst Curt Monash pointed out all the other database companies go through – like Oracle Corp’s stumble due to its unchecked growth and general adoles-cent testos-terone problems in 1990 and Informix Corp a year or so earlier with acquisition indigestion? Indeed yes, that is a serious question, since the bump was seen in the highway by Monash way back in the summer of 1994, and the company has been running back and forth over it the last 18 months by general consensus (including Sybase executives). Sybase had a stinking 1995, and it’s not on smooth ground yet. After net losses for the year up to end of December of $19.5m, which looked a bit sick compared with 1994’s $87.1m net profits, it saw turnover up a modest 16% to the aforementioned $956.6m, a result hardly improved by the revelation that database licence sales fell between 4% and 5% in the second half. For its first quarter reported at the end of April the company’s turnover climbed only 13% in what is universally held to be a high-growth market, up to $243.7m, and instead of the forecast $3.7m profit it bled red ink to the tune of $6.9m. Wall Street promptly tore 25% off the company’s value overnight, seemingly a tad worried that despite the much-heralded new and improved System 11 core database release at the tail end of fiscal 1995, database turnover continued to slip, with what growth there was coming from the lower-ticket Power-builder graphical user interface-based client-server tool division. .
By Gary Flood
In response, a worried Hoffman shuffled his cabinet, as all good troubled premiers are expected to do, and has propelled Kertzman forward to win hearts and minds, while enough customers finish (worringly long) evaluation cycles with System 11 to shore up the bottom line. Our past messages were that we were the Enterprise Client/Server company, or that we represented the Architecture for Change, twinkles Kertzman. These were certainly accurate and intellectually honest slogans, but had no emotional component. We needed a tagline with more punch. Read: a public presence in general with more punch, since, to slight groans from those of us who’ve heard computer companies in trouble say this stuff before, Sybase is seemingly chock-full of best-kept secrets, like the fact it is the database behind some of the heavy-hitter Web sites from such as Fed Ex, Time Warner’s Pathfinder, Lombard Securities, Carling/Bass Brewers, c/net and of course the ultra-Web-chic HotWired. This sotto voce success is thus the seed for the company’s tilt at the emerging Internet-intra-net commercial market, and an opportunity to get back some momentum from pretenders to the number-two-behind-Oracle slot Informix: how many hot Web sites have been built with that, its officers sneer. On the server with Sybase and on the client with Powersoft, both companies had a history of transforming their respective systems into ones capable of supporting real business applications. The Internet is in a similar state to where those systems were before we got to them, and we’ll do the same there, Kertzman declares. After us, the Internet’s going to be a lot more than just an electronic bill-board for a few marketing campaigns. That remains to be seen, but unlike many of the underimpressed pundits in Waltham, we’ll give Sybase the benefit of the doubt. Granted the company has stumbled with quality, performance, and product delivery this past couple of years, but what short memories we all have – time was when Hoffman’s mob could do no wrong, it was seen as technology leader, and ironically the previous administration’s Stu Schuster regularly won awards for his marketing genius. The data-base market seems to have some inner dynamic where one company at a time has to be seen as slipping while the others in the pack race past it, but it only takes a bad quarter, a mystifying acquisition or two and a stuttering product cycle for the dunce’s cap to pass to one of the erstwhile leaders. If Informix slips up on its very ambitious and oft-stated plan to meld its relational offering with the totally different Illustra database by calendar year end, if Ellison distracts Oracle from its ruthless Darwinian business practices with the Network Computer or if Microsoft flubs Back-Office then Sybase will regain its place and the affection of all those brokers. But that will also require solid, real, delivered engineering, not simply a winning smile and a slicker PR package. We’re still worried that the Californians think the Bostonians around Kertzman have written the book on turnaround marketing. That’s as far from proven as saying Sybase is dead in the water, as Oracle and Informix are telling anyone who picks up the phone.
Kertzman Fix
But marketing isn’t enough – you also need good technology and aggressive selling – and let’s hope those sides of the business aren’t being neglected in favour of the Kertzman Fix. Among other turnaround topics, Kertzman & Co revealed that the Sybase field sales force reacted poorly to the first tactical realignment forced on them from the top this past January, but that the second phase, due next month, will involve a lot more managerial warmth and fuzziness. The object is to switch Sybase sales folk away from what Kertzman dubbed the baseball bat confrontational approach – attempting to knock out rival products feature by feature – to a vertical (industry) focused one depending more on surrounding products, such as Sybase middleware (Enterprise Connect), data warehousing (Sybase IQ), Web stuff (web.sql, which helps with Web page/HTML generation from relational data sources), or the Powerbuilder line (which includes the Wat-com/SQL Anywhere low footprint database).
