Sybase, Informix rev up revival strategies

After years of financial turmoil, the two have pieced together a string of profitable quarters and today made acquisitions to further their revival strategies.

Sybase bought an Internet financial services company called the Home Financial Network, while Informix snapped up Ardent Software, maker of data warehousing technology that takes information from databases and gives businesses detailed analysis and reports.

The pair were once high-flyers in the database arena, but they've seen rivals Oracle and IBM capture the bulk of a market that has matured and consolidated in recent years. After some rocky times that included executive turnover and major restructuring, the chief executives from both firms say they're now on solid footing with revamped strategies targeting e-commerce.

Both Sybase and Informix are "increasingly trying to provide the infrastructure for a [complete] solution," said International Data Corp. analyst Carl Olofson. "For Informix, instead of just providing you with a database engine and forcing you to get five other pieces to build a solution yourself, they're saying, 'We'll provide you all the elements.' Sybase is packaging their technology and delivering it all wrapped up in a service."

Informix still ranks third overall in database revenue behind Oracle and IBM, while Sybase ranks fifth behind fourth-place Microsoft. But Wall Street and industry analysts say the two companies are on the right track.

This year, both companies have released Internet-based databases aimed at helping businesses create e-commerce Web sites. Both have also released e-commerce software to help companies build storefronts.

The two also made other acquisitions to fill out their e-commerce product families. Informix in September bought Cloudscape, a two-year-old start-up that offers a mobile database built entirely in the Java programming language. It lets mobile users connect to headquarters to download the latest data, work offline, then dial in again to update and sync up with the corporate database.

The Ardent purchase gives Informix technology that helps e-commerce Web sites analyze customers' habits, so they can tailor information to their customers' preferences, said Informix chief executive Jean-Yves Dexmier.

"This is a critical component of our Internet economy strategy," he said in an interview. "When you have an e-commerce Web site, you're going to need the right content to offer to customers."

Sybase, considered the leader in the mobile database market, bought a data warehousing toolmaker called Data Warehouse Network in February.

Analyst Mitch Kramer of the Patricia Seybold Group said Sybase's purchase of Home Financial Network plays to the company's historical strength in the financial markets. The database firm plans to create a new subsidiary that will provide online financial technology, products and services to financial institutions.

"They were the database of choice on Wall Street in the mid-'80s, and that's where most of their installed base is," he said.

Olofson agreed, saying the move allows Sybase to compete with Oracle in the growing application service provider space, which offers software products on the Web.

"The [subsidiary] will use Sybase's technology underneath, so this not only provides a services revenue stream, but it promotes their technology," he said.

Sybase's stock has climbed from about $5 to $16 in the past year, while Informix's stock has risen from about $5 to the $10 range during the same time.

Wall Street firm Punk Ziegel & Co. today reiterated Sybase's stock as an "aggressive buy" today and believes the stock will rise to $20 in the next year. And analysts interviewed today said they're optimistic about Informix.

"After their near-death experience in 1997, they brought in new management and have come back to profitability," said Jim Pickrel, of Hambrecht & Quist. "With this merger, there is great momentum going forward."

Jim Mendelson, of SoundView Financial Corporation, is more cautious. "It's not a give-in that they will be successful; this is a good move for them," he said, referring to the Ardent purchase. "This is a momentum driven market, and this brings them closer to being a momentum driven company. This shows they have the potential of morphing into a different company."