There's money in mobile
Knorr: So then how would you segment the customer base for all this mobile stuff? Some carriers, some enterprise, some...
Chen: Good question. I'm going to answer your question with a much broader discussion on our go-to-market strategy. Because otherwise it doesn't make a lot of sense.
Our customer base has always been enterprises and government, as well as financial institutions -- the banks and the insurance companies and all that. So that's who we sell the database to, mostly. And then we sell development tools, PowerSoft tools, so they can develop applications.
We took a look at why, when we were in such deep trouble, we didn't go away as a company. Because customers built a lot of mission-critical applications on us, like trading, that are very, very sticky - as long as we would provide state-of-the-art services and continue to upgrade the technology, not add bells and whistles.
What was very clear from my customer base and the early days of my life here is that they wanted something rock solid that worked and scaled. They didn't want any bells and whistles. They actually told me - all these Microsoft things, I don't need them and I will never use them. Just give me a rock solid system so that if I trade a million shares, it trades a million shares. So capacity planning and scalability is very, very important. As is continuous operation and the ability to not have database corruption. Those are extremely important. So we focused very much on the mainframe RAS quality of our system.
Knorr: And in that market, those legacy database customers, approximately what portion of your revenue is that today?
Chen: We do about $700 million a year in database, roughly two-thirds of which is legacy-driven. So if you look at it, it's probably about $450 to $500 million out of the $1.2 billion in revenue. We do about $200 million a year or so in analytics. And that's brand new.
So to finish answering the question, when when we looked at that, we said there's an awful lot of money to be made if you are part of the revenue systems of your customers. That's why we got into messaging.
We asked ourselves how we could into the revenue systems of other big customers. Well, let's take the telco vertical. What drives the revenue? Well, it's obviously wireless. So what drives wireless revenue? You know, interestingly enough, messaging. They were doing SMS like crazy, everybody's buying this thing, and then it goes to the all-you-could-eat plan and unlimited text messages and stuff. And we knew that would develop into MMS and that would develop into IPXs, thanks to application development and applications talking to each other.
So we got into messaging, because it's core to telco companies. So once I established my foothold in these revenue systems -- financial verticals, telco verticals, and government - I started cross-selling.
Right now I go to my existing customer base, the database customers, and say: "You need to use devices, right? Yeah, okay. So do you use one type of device, like a BlackBerry, or do you use more than one type of device?" Well, you know, three years ago, they said a BlackBerry is good enough. Today, they say no, no, no, we want the iPhone.
So we said, "Okay, now how do you manage that?" And they said, "Well, that's just the problem." So I said, "Okay, let me tell you what I'll do. I will manage it for you because I'm going to provide you a server that will allow you not only to manage these devices from a security point of view, but also develop apps."
All you need to do is develop an app one time (and we use a lot of the old PowerSoft technology). You develop the app one time and deploy, because we will write the device-specific code. You could deploy it on a Blackberry as easy as you could deploy it on an iPhone.
That's where our technology called the Sybase Unwired Platform comes in, which is both development and deployment. We take the traditional database customer and go in and say: "I'll sell you analytics, because you've got all this data and you need to analyze it." Okay, good, that's obvious. "By the way, if you ever use devices, I will sell you the server to manage all these devices."
To the telco people that are using messaging, I say, "Well, I'm going to sell you analytics, also. But this time, I'm going to sell you analytics to analyze your traffic. Don't you want to know where your traffic comes from? By the way, why am I uniquely qualified? I do one 1.2 billion SMSs a day." Sybase has four NOCs [network operation centers] around the world. We're the largest non-operators in terms of managing messaging traffic. So I have all the data.
So if you're Verizon, you say: "Hey, you know, I'm paying an awful lot of termination fees. Where the hell is the data coming in from Europe? Is it from Vodafone, Deutsche Telekom? What is it? Is it from Greek Telecom? Where shall I provision my systems? Where is the highest margin traffic that I want?"
I am providing that right now. I am doing as much cross-selling as I can. We were successful in doing that in a number of places. But I was able to sell infrastructure software to Verizon by saying, "Hey, I've got this layer called device management in the server. So Verizon, how about you build a [device management] business for small-to-medium enterprises, and do it hosting on my software?"
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