Sybase CEO John Chen: Tale of a Turnaround

What’s behind SAP’s acquisition of Sybase? John Chen, Sybase’s CEO, offered compelling clues in an in-depth interview shortly before the merger was announced

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The future of mobile

Gallant: John, since you see the direction for this mobile market, talk about what you think enterprises aren't thinking about today that they ought to be thinking about. If you're leading IT, and you see all this coming down the road, what should they be doing that they're not doing today regarding mobility?

Chen: Today their [concept of] mobility is still by and large an information delivery mechanism. E-mail is a perfect thing. But you know, it's not really an action-based platform.

So what does that mean? Well, taking a cell phone and paying for something is action-based. I don't think there's a serious push yet into payment, remittance -- that whole area of the mobile commerce world.

We will have to clear a couple of hurdles to get there. Government regulations are a huge hurdle, but it will be fixed, because otherwise Western Union couldn't have been in business for 150 years. It will be fixed. And there's a big fight between the telephone company and the banks -- who owns the wallet. Now that fight is somewhat political; different countries have different regulatory environments. It will be interesting.

We provide mobile unwired technology to Celcom in Malaysia, for example. In Malaysia you can trade minutes with 13 different telecoms in Southeast Asian countries using our technology. You can buy things. You can give people money or something of monetary worth, like minutes.

So that whole area - the machine-to-machine, point-to point-of-action space - is still in a very, very early stage of life. Partly because the high-end PDAs - about 13% of all the devices out there - are still relatively expensive. I could use my Web-based phone (which you could probably buy for 15 bucks) for SMSs and all that. I could use it to tell a bank to deposit something. I could do that, but I can't really do a hell of a lot more than that. And so these high-end devices need to become cheaper. It's a matter of time. Very shortly in the near future you'll be able to buy PDAs very cheap.

Knorr: I wanted to ask you about your messaging technology. You're seeing a growing amount of revenue from enterprises using that. What are they using it for?

Chen: Okay. Some good examples come from a big name: Proctor and Gamble. They commissioned us for a number of their brands in a number of countries -- it started with Philippines -- to do a customer loyalty program.

Let's just start with diaper business. You're a mom. So Proctor and Gamble gets you to register as a user, and then you enter your kid's name, birth date, blah, blah, blah. You know, all this pertinent information.

In return, they will send you more than information about the products, they will send information about how to raise a kid. Not just a coupon, although a coupon is part of that. So you get an electronic coupon from your mobile phone. You could actually walk into a store and redeem that, and now they know, they are now tracking your needs, because your kids are growing up, right?

Gallant: So they don't even have to rely on the retailer because they're getting that information directly from the consumer.

Chen: These are all carried by the SMS technologies. Now, when location-dependent code is on, then they actually know where you are.

Gallant: That's a little scary.

Chen: Well, you have to be allowed. I mean this is an opt-in thing. And then, if you walk by a store, they will send you an SMS and say -- oh, by the way, if you turn left and you turn right and walk three steps, you have a new product for today. For the next hour, you get it for half price.

Gallant: That's great.

Chen: And you have the ID on the mobile phone. Now, when this becomes a wallet -- not there yet -- you could just scan that and then the whole electronic coupon would go through.

Gallant: So are they working with a service provider on that or do they work directly with you to handle that?

Chen: It's a three-party thing. Their marketing organization comes up with the algorithm. A service they work with provides a lot of these outreach and signing-up people. And then they work with us as a transport. So they basically say: "Here's a bunch of IP numbers or phone numbers and here's the message I want to send them. " And, we go send them.

Gallant: Are there any other examples that you can cite, because I think this will be very interesting to people.

Chen: Every time you buy a Nokia phone, you have to initiate the phone using SMS. And they will download all kinds of stuff. Do you want music on it? Do you want stock quotes? All kinds of services. That's how you configure of a new phone.

I could give you literally tons and tons of examples. CitiGroup uses it for fraud detection on credit cards. You're sitting here; your card is being used in Brazil buying washers and dryers. If you opt in, they know exactly what's going on. You can't possibly be doing that.

Next page: Analytics gains respect

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