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Success in smaller packages

Sybase chief John Chen talks about why the company stumbled and how he hopes to keep it from repeating its mistakes.

    CNET Newsmakers
    December 31, 1998, John Chen
    Success in smaller packages
    By Sandeep Junnarkar
    Staff Writer, CNET NEWS.COM

    NEW YORK--When John Chen first arrived in the United States from Hong Kong at the age of 16, he had to learn to quickly adapt to a new pace and culture in order to thrive and succeed in his adopted country.

    Little did he know, those intangible skills would come in handy years later when We were unable to really go into the prepackaged applications world...because we  were so focused on what I would call in many ways 'creating technology for technology's sake.' he was trying pump life back into a stumbling company that had fallen behind by being slow on the uptake.

    Once a technological power in the database software world, Sybase seems to have lost its way in the past few years. Chen, who joined Sybase 18 months ago and was recently appointed chief executive, is hoping to rejuvenate the firm and make it ready to meet the fast-changing needs of customers in a world with equally fast-changing technology.

    While carefully weighing the strengths and weaknesses of the company, Chen saw that it had grown too big, with too many far-flung entities lacking a cohesive strategy.

    This month, Sybase announced the formation of four different divisions in an effort to kick-start sagging profits and regain market share.

    The new divisions consist of mobile computing, Internet applications, enterprise computing, and business intelligence tools. Whether the strategy will succeed still remains to be seen, but most analysts agree it was a necessary and smart move.

    CNET's Sandeep Junnarkar talked to John Chen about why the company stumbled and how he hopes to keep it from repeating its mistakes. Why were you brought in to Sybase?
    Chen: I was recruited to take over the company, which I subsequently did. But more importantly I was brought in to engineer a growth strategy.

    Why was the company in need of such an overhaul?
    Sybase had been growing extremely fast in the late '80s and early '90s principally because of the open system, client-server data-management wave. Sybase had concentrated on products and technology and we went on a bunch of acquisitions which brought in some great engineers and more technology.

    But the problem was that at the time, we were unable to really go into the prepackaged applications world around 1993 because we were so focused on what I would call in many ways "creating technology for technology's sake."

    We have some great technology that is well ahead of other people but nevertheless, since we are in the enterprise business, you have to create business solutions that people will want to use for their companies. You can't just create technology. I think we lost our way a little bit and because of that we lost some market momentum.

    The market also shifted so I said, "We need to focus on where the market is going." I said, "Let's not get on the train when the train is almost at the end of its destination," so to speak.

    What did [former CEO] Mitchell Kertzman think of your analysis about the direction in which Sybase should be headed?
    When I first joined the company, [Kertzman] asked me what my first impressions were. I told him I thought we here at Sybase spoke a strange language. We threw words like "Java," "CORBA," and "DCOM" [Distributed Component Object Model] around. I said, "Those words are pertinent, but who here is talking about the business of our clients? Who is talking about Mr. Customer, and how do I create more value with your business?"

    He thought about it, and let me tell you, Mitch is into gadgetry, and he said, "Well John, we are in the technology business, we have to be tech-driven."

    After a while he understood exactly what I was saying. We never had problems getting people to believe in our technology; no one thought We threw words like Java, CORBA, and DCOM around.  I said those words are pertinent, but who here is talking about the business of our clients? our technology was problematic. We have to show companies that our solutions can drive their businesses efficiently and I ultimately want to bring Sybase to being a solutions-based company that is verticalized.

    Apart from the changes in the company's business strategy, in what other ways are you going to have to tweak Sybase to return it to full health?
    I want to change the culture of the company because I think it is a little too big to turn on a dime. Things change so fast in our industry and are very broad-based. The only way to win is with the start-up model. They win because they get up every day and worry about one thing. A small company, at least for the first $20 million, is strong because they are a pure player and worried about just one thing--I don't care what they worry about. We seem to have a lot of different issues to worry about. I think it is important to create an entrepreneurial culture and that is why I created four divisions that can move nimbly.

    What is the likelihood of spinning off these various new divisions?
    The ultimate answer is based on the market conditions. Right now, the blueprint does not call for them to be spun off. But there are no emotional issues or principles involved here. If for some reason a business could be propelled higher by doing something like that, it is not out of the question.

    Where is the future taking Sybase?
    We think information technology is the future role and we call it the connected economy. We don't think it is just about devices, but how the data connects to each other over these devices. Anything with an IP address is a device and we have been focused on building infrastructure into the devices. The idea is that we want to promote the fact that things connect together in many different forms and that is where the growth is going to come from.


    Age: 43

    Previous stops CEO of Siemens Nixdorf's Open Enterprise Computing Division as well as CEO of Siemens Pyramid. He was also the vice president and general manager of a unit at Unisys.

    Education: BS from Brown University and an MS from California Institute of Technology, both in electrical engineering.

    Community Activity: A Hong Kong native, he is a member of the Committee 100 comprised of Asian-American leaders in the community. The committee is designed to foster better relationships between the Chinese government and the United States. Other members include cellist Yo-Yo Ma and author Amy Tan.