Business software firm SAP AG, which has derided Oracle Corp.'s acquisition strategy in the past, is now taking a page from its rival's success and gunning for it at the same time.
In its deal to pay $5.8 billion for Sybase Inc. /quotes/comstock/13*!sy/quotes/nls/sy , an underdog in the database software market, SAP /quotes/comstock/13*!sap/quotes/nls/sap , the biggest player in business software applications, seems to be going after Oracle in its core market.
At the end of 2008, the most recent year data is available, Oracle /quotes/comstock/15*!orcl/quotes/nls/orcl was the Number One player with a 28.2% share of the $2.2 billion database software market, while Sybase had an 8.5% share, according to IDC.
Over the past several years, Oracle has grown beyond its core database business and expanded into software applications, SAP's domain, by making a series of what many analysts and even rivals believe are astute acquisitions.
SAP is touting the deal for Sybase as a corporate mobile applications play, but new licenses in Sybase's database business still grew slightly faster than in the mobile business in its last quarter. SAP also partners with Microsoft Corp. /quotes/comstock/15*!msft/quotes/nls/msft and IBM Corp. /quotes/comstock/13*!ibm/quotes/nls/ibm , for database offerings to its corporate customers, so it is likely downplaying the fact that it is buying a company that also develops database software.
"I see this as a very risky move for SAP," said Bruce Richardson, chief strategy officer for Infor, a privately held business software applications developer based in Alpharetta, Georgia. "While it does give SAP some strength in financial services, the mobile market is very early in its evolution."
For its part, Oracle declined to comment. Richardson said SAP's move could fuel a bidding war for Sybase, or even for SAP itself.
But for now, it's pretty clear who is having the last laugh.
"I'm waiting for the juicy Larry quote," Richardson said, referring to Oracle CEO Larry Ellison. "He's got to love having SAP show up at a gunfight with a squirt gun."