SAP: We're paying a fair price for Sybase

SAP co-CEO Bill McDermott insisted that he was paying a fair price for the acquisition of mobile and database technology vendor Sybase, during a press conference at the Sapphire show yesterday.

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SAP co-CEO Bill McDermott insisted that he was paying a fair price for the acquisition of mobile and database technology vendor Sybase, during a press conference at the Sapphire show yesterday.

"Exceptional assets don't come cheap," McDermott said, justifying the S$5.8 billion purchase. "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 share 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 thousands of jobs have been lost and "people have been demoralised."

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 Frankfurt and Orlando. 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.

SAP UK & Ireland User Group Annual Conference

21-23 November 2010, Manchester

Early Bird rate now available click here

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