SAP’s $5.8B acquisition of Sybase is being touted by many in the news media as a desperate act by a firm in trouble who overpaid for a legacy asset. Here at SiliconAngle we’ve been following the disruptive trends and this deal makes sense.

A new world has emerged (well documented here at SiliconANGLE.com) and it’s all about DATA.   How data is created, stored, shared, and available.  The role of the database is changing.  It’s all going to in memory not just disk anymore.  Lots of data, highly available, reliable, and accessible on any device or environment not just the "glass house" aka datacenter.  More on that later.

Stack Wars

However on this SAP deal, I’ve been squinting through this deal and have come to a different conclusion. SAP’s acquisition of Sybase is both defensive—in the sense that SAP is too reliant on Oracle and needs to control its own destiny to protect its margins; and offensive in that by owning its own stack, pursing a data in memory strategy, affecting tighter integration and enabling secure mobile apps, SAP can pursue a more aggressive growth path.

Did SAP overpay for Sybase? Maybe so but SAP has just acquired one of the few database installed bases with a rich history and strong customer base. There aren’t many enterprise-class database platforms left and Sybase provides SAP a viable alternative to Oracle. Valuation notwithstanding this is an interesting move from a customer, industry, and competitive perspective.

I had a chat with senior industry analyst Dave Vallente, founder of the analyst firm Wikibon.org, and he commented:

"John it’s all about how the applications are changing how the storage, networking, and infrastructure markets are structured both from a product and company perspective.  No doubt consolidation is here, but there is something bigger brewing.

Relative to this SAP deal:

*Oracle is vertically integrating and SAP needs a hedge otherwise its margins could get crushed

*Integration of persistent flash storage will radically change system design by enabling the entire SAP database instance to reside in memory

*Think iPad of the data center—integrated, clean, fast and high value

*It’s all about the stack these days. Leading contenders are Oracle, IBM, HP, VMware, Microsoft, Cisco— SAP just put itself into the mix

*Despite management sensitivity to the issue, SAP wants to create its own stack and re-architect systems using a DB and IP they can control.

*This move gives SAP substantially more pricing control because, over time, it will be less reliant on Oracle

*Virtualization is a big trend that SAP needs to hop on– working with a VMware ecosystem is a far better path than being locked into Oracle

*For SAP and Sybase, supporting VMware is an imperative…Oracle has been fighting VMware adoption (as has Microsoft)– So as these big players drag their feet there’s an opening for SAP.

Virtualization Is The Heart Of Infrastructure 2.0

Virtualization, the private cloud, SaaS and mobility are all growth paths further enabled by this acquisition. Will this create confusion in the customer base over which database to choose? I doubt it. diehard SAP customers that are Oracle users can stick with Oracle if they like.

New applications however are emerging in mobile and virtualized apps where the infrastructure will become increasingly invisible and ROI will be realized from integration that will result in accelerating the time to value. Specifically, integrating solutions that reduce deployment risk, simplify infrastructure, lower costs and increase deployment speed.

As far as Sybase being a legacy asset, the company has been making major investments in mobile computing with particular strength in Short Message Service. Its financial services stronghold is appealing and the move toward cloud services makes integrated stacks more appealing.

Key components of the SAP stack in this new world include:

*The application layer—including mobile apps

*Database, middleware and tools

*Virtualization, management and security

*Storage, servers and networking

Is the move without risks? No. $5.8B is a lot of dough but SAP’s stock has been pretty much trading in a horizontal zone for the last six years and new management is under pressure to make a difference.

My Angle: Sybase could be just the lever SAP needs.

In the war against Oracle SAP now has a position to leverage their strengths and vector into having a compelling database offering from high end to fast in memory edge.  I see this as a strategic and good move for SAP.