Sybase Inc’s new company-wide reorganization is impressive, but it may be too little too late. Researchers at Merrill Lynch said they were impressed with what they called the appropriateness and soundness of the company’s new plan but they fear it has come very late in the game. Earlier this month (CI No 3,553) the Emeryville, California-based database software vendor reorganized around four new business units. In addition to the previously- announced Mobile and Embedded Computing Division (CI No 3,501), the company said it has created three new divisions: Enterprise Solutions; Internet Applications; and Business Intelligence. But according to Julie Tylman, a Merrill Lynch analyst who met with the company’s management at the beginning of December, the reclassification of divisions is only the first step. While she thinks the strategy is good, she says even a good strategy will fail if not implemented properly. Firstly, she says Sybase must change the mindsets of its consulting and sales forces to a more solutions and team-based approach. When you’re trying to turn a company around, you’ve got to turn around the mindset too, she said. In the past, Sybase’s strategy was to send sales people into a company, then rope in consultants to implement the software. Now, it realizes it’s much better off going at it the other way round. But saying it is one thing, actually doing it is another, Tylman says, they’ve got to realize that if the consulting team goes in for an engagement to solve problems, they could also sell the software too, or pass it on to the relevant sales team. They’ve got to work as a team. Key to the transition is a move from selling pure technology to selling packages, she says. And it’s why rivals, in particular Oracle Corp, are leaps and bounds ahead. But she praised Sybase’s move to selling software packages into vertical markets as the best way to move forward. Secondly, if the company expects the sales approach to change, it has to compensate staff accordingly. Salespeople are always ‘incentivized’ by the way they’re compensated. she said, you’ve got to make them want to jump on board and say, yeah, this is the way we want to work. Improving its relationship with its channel partners is also key for the software company. Sybase has been talking about doing it for two years, but it’s yet to deliver a sound strategy, Tylman says. It really needs to work closely with the channel, but [when we met with management] it couldn’t give much more color on the issue. But that’s where it’s looking to get it’s new business from. But as well as fostering new business, Sybase needs to put more effort into seeding its old accounts. Before, the company had the mindset of an Oracle, Tylman said. It concentrated solely on getting new business but then, as the end of quarter drew near, it would rush back to its trusted customers and persuade them to get upgrades. But Tylman believes that, under its new strategy, Sybase needs to focus more on its existing user base, not just offering them new databases, but also working to sell them customized applications too. When Oracle reported it’s recent quarter, it said growth was driven by numerous account wins in the financial, insurance and telecom markets; all key areas for Sybase.
