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Sybase (NYSE: SY) said today that it has struck a deal 
with IBM (NYSE: IBM) in which Big Blue will market and distribute Sybase's Linux database management software
IBM will market the Adaptive Server Enterprise (ASE) solution from Sybase for use on its eServer OpenPower platform. The customized version of the software is slated to be available pre-loaded onto IBM servers starting early in 2005.
Dublin, California-based Sybase was one of the first software companies to offer a Linux-friendly database offering and says that more than 40,000 companies and other organizations worldwide now use its ASE solution, which debuted in 1999.
Solid Head Start
Earlier this year, Sybase began offering a free production license for its Linux database products. The company said its Linux Express Edition of ASE has been downloaded 10,000 times since that free version was launched in early September.
Raj Nathan, senior vice president of the Information Technology Solutions Group at Sybase, said the combination with IBM will help encourage more enterprises to adopt Linux. "Enterprises are seeking scalable and reliable Linux solutions," he said.
In fact, some analysts say the biggest threat to Sybase may be from enterprises moving to Unix environments because they believe their requirements are too complex and intense for current Linux offerings to handle.
Solidifying Positions
For IBM, the deal represents another Linux offering to help set it apart from its competitors as it seeks to embrace the role as a Linux-friendly vendor that can also offer Unix solutions when they're called for.
Yankee Group analyst Laura DiDio said it's important for IBM to gain an ally like Sybase because of the competition it will face in the entry-level server market space it is targeting with its Open Power server line.
"IBM knows it can use Linux as a way to drive services revenue as well as hardware sales," DiDio said. "Hooking up with establish vendors in that space makes sense."
Important Allies
But other analysts said Sybase is also a winner in the deal because teaming with Big Blue makes its Linux giveaway software far more desirable and lends it instant credibility.
Forrester analyst Noel Yuhanna said the small and mid-sized enterprise market was most likely to be attracted to the offering, which does have limitations for larger customers.
Forrester predicts the Linux database software market will growth from about US$400 million this year to $1 billion by 2007.
"Customers are looking at the upgrade and scalability path when they make a choice like this and this provides more upside," Yuhanna said.
Still, Oracle (Nasdaq: ORCL) and Microsoft (Nasdaq: MSFT) have a strong hold on database sales to larger company settings, where it will take more convincing to sway customers away from what they're already using. "It's a harder sell, but Sybase is well positioned to make a mark there."
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