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SAP to Sybase: In-Memory Databases are Hot

If you're left scratching your head over SAP's intention to acquire Sybase for almost $6 billion, you're not alone. Despite Sybase's 1990s reign as the supreme database standard in certain sectors (including Wall Street), the company's flagship product has certainly fallen from grace. Why would SAP pay a greater than 50 percent premium over the Sybase closing price on the day of the announcement, just to acquire a relational database that is firmly stuck in maintenance mode?

Well there's more to Sybase than the relational database product. Take, for example, its mobile application platform. Sybase hit Gartner's "Leaders' Quadrant" in January of last year, and SAP needs a good mobile play. Beyond the platform itself, Sybase has a slew of mobile services; click this link to look them over.

There's a second major asset that Sybase has, though, and I wonder if it figured prominently into SAP's bid: Sybase IQ. Sybase IQ is a columnar database. Columnar databases place values from a given database column contiguously, unlike conventional relational databases, which store all of a row's data in close proximity.

Storing column values together works well in aggregation reporting scenarios, because the figures to be aggregated can be scanned in one efficient step. It also makes for high rates of compression because values from a single column tend to be close to each other in magnitude and may contain long sequences of repeating values. Highly compressible databases use much less disk storage and can be largely or wholly loaded into memory, resulting in lighting-fast query performance. For an ERP company like SAP, with its own legacy BI platform (SAP BW) and the entire range of Business Objects and Crystal Reports BI products (which it acquired in 2007), query performance is extremely important.

And it's a competitive necessity too. QlikTech has built an entire company on a columnar, in-memory BI product (QlikView). So too has startup company Vertica Vertica. IBM's TM1 has been doing in-memory OLAP for years. And guess who else has the in-memory religion? Microsoft does, in the form of its new PowerPivot product. I expect the technology in PowerPivot to become strategic to the full-blown SQL Server Analysis Services product and the entire Microsoft BI stack.

I sure don't blame SAP for jumping on the in-memory bandwagon, if indeed the Sybase acquisition is, at least in part, motivated by that. It will be interesting to watch and see what SAP does with the Sybase product line-up (assuming the acquisition closes), including the core database, the mobile platform, IQ, and even tools like PowerBuilder. It is also fascinating to watch columnar's encroachment on relational. Perhaps this acquisition will be columnar's tipping point and people will no longer see it as a fad. Are you listening Larry Ellison?

Posted by Andrew J. Brust on May 18, 2010