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Deal gives Sybase a boost

Sybase is getting a much-needed boost through a deal with New York Life Insurance to provide software for the insurer's new Web site.

Troubled database software maker Sybase is getting a much-needed boost to its bottom line through a deal with New York Life Insurance to provide software for the insurer's new Web site.

In a deal that foreshadows Sybase's future strategy, Sybase partner Quadravision, a systems integrator specializing in intranet applications for financial services companies, brokered the New York Life agreement.

The New York Life Web site will provide information on the insurer's three main businesses--life insurance, asset management, and health benefits--and let visitors build customized pages to deliver financial information and planning assistance.

Quadravision is building the site using its own ME! Web server engine, and Sybase's SQL Server System 11 database software, web.sql HTML development tools, Open Client application programming interfaces, and Legacy Systems Gateway middleware.

Sybase representatives declined to disclose the cash value of the New York Life deal. But despite the cash the deal brought in, the deal is significant to Sybase as a vote of confidence from a high-profile customer for a high-profile project.

Sybase, which recently surrendered to Informix Software its rank as the number-two database software vendor, reported a $52.6 million loss for the third quarter--its third consecutive quarter in the red. The ongoing financial troubles and the departure of several top-ranking executives have shaken some Sybase customers, making them nervous about continued heavy investments in a company that appears to be heading south.

But Sybase executives have said deals such as the New York Life contract, which was brokered through a partner with a particular expertise in intranet development, are the way of the future for the company.

In past years Sybase management has attempted to match archrival and database market leader Oracle step for step as it ventured forth into new markets, despite Oracle's nearly four-to-one revenue advantage.

Top Sybase management has said those days are over. Instead of trying to sell directly into vertical markets that demand special skills, the company will rely more heavily on partners to provide expertise outside of the company's core business area. That means relying on systems integrators like Quadravision and independent software vendors to use and promote Sybase database software as part of projects that also rely on tools and intranet software from other vendors.

This is part of CEO Mitchell Kertzman's plan to right the Sybase ship by returning to its home port. Kertzman took over the company in August and is trying to refocus Sybase on its core business--selling database software. While Oracle continues to pursue its network computer plans and a myriad of related tools projects, Kertzman intends to scuttle any unprofitable Sybase sidelines, such as its new media division, which he shut down in July.

Sybase will also concentrate on selling back-end software for Web sites, an area where the company enjoyed success early on in the Net rush because of its strong installed base in the financial services industry.

Here again, systems integrators like Quadravision will be critical in making the plan work, expecially when Sybase faces extreme pressure on Wall Street from Microsoft and its BackOffice suite of database and business applications. While BackOffice runs on relatively inexpensive Intel-based hardware, most of Sybase's business is on Unix-based systems.

While Sybase concentrates on moving more of its business to Windows NT application market, it will be looking to third-parties to net more deals like today's New York Life coup.

But the strategy is far from assured.

New York market research firm First Albany estimates that the Windows NT application market will bring in $100 million this year, largely driven by NT database sales, and grow to $1 billion by the year 2000.