GOOD MORNING. Stocks in Asia closed higher today, European shares are mixed, and U.S. futures are pointing to a lower open.

Get ready for a shakeup in the software sector. German-based business software firm SAP AG (SAP) is buying software maker Sybase (SY) for $5.8 billion in an attempt to challenge Oracle (ORCL). The acquisition is supposed to be finalized during the third quarter and should give SAP a new well of database management products to choose from that could help the company improve market share among large businesses – where Oracle has been increasingly moving in. In addition, analysts say that SAP’s acquisition could help it gain market share in corporate mobile applications while the market is still developing and few major players exist.

Both SAP and Sybase will acquire assets that they’ve been missing and as a single company, they could attract more customers than they would as two separate ones. Sybase, in particular, which has been falling behind competitors like Oracle and IBM (IBM), could end up getting the best end of the deal. Sybase’s stock closed up 35% yesterday on news of the acquisition and is up 14.6% during today’s pre-market trading. “While Sybase is leading the market in the columnar [database management system], it is somewhat challenged selling and positioning the product with the business buyers, sine they can’t really see, feel, or touch it,” wrote Boris Evelson, principal analyst at Forrester Research, in a report yesterday. For SAP, the acquisition means that it “can now potentially reduce reliance on DBMS partners, most of whom (Oracle, IBM, Microsoft (MSFT)) have their own full software stacks and therefore compete, often putting a strain on partnership relationships,” he wrote.

For the time being, it doesn’t appear that the acquisition will make a big dent in Oracle’s market share. Analysts say that SAP will likely face many challenges, including convincing customers to switch from Oracle’s database offerings. It will likely be about a year before SAP and Sybase pose a real competitive threat to Oracle, and that gives Oracle time to react, says Jeff Kagan, an independent tech analyst. However, “if they are successful that means Oracle will have a larger competitive threat to combat every day,” he says. “That means pricing may come down and the fight will go up, both  to acquire and to maintain client base.”

IN OTHER NEWS:

  • Federal prosecutors are conducting preliminary criminal investigations of several major banks including Citigroup (C), J.P. Morgan Chase (JPM), Deutsche Bank (DB), and UBS (UBS) about their roles in mortgage-bond deals. LINK

  • Transocean (RIG) plans to file a petition in federal court today to limit its liability in the oil spill in the Gulf of Mexico. LINK
  • Sony (SNE) is forecasting a return to profit for its current fiscal year. LINK

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