Yesterday I was invited to lunch with John Chen, CEO, Chairman and President of Sybase. Greg MacSweeney, Editor in Chief of Wall Street & Technology and I, dined with him downtown at Harry’s, where we spent a good hour and a half discussing Sybase’s plans for the financial services vertical.

Chen seemed very happy and relaxed at lunch. Considering the state of the financial services industry, from which about 20% of Sybase’s revenue is derived, that might surprise some. However, Sybase on Wednesday, released better than expected second quarter earnings---up 6 cents a share. The company's expected third quarter earnings are 38-40 cents a share. And its stock, despite overall market conditions is up 16% over the last three months, and up 23% year to date. What’s not to be happy about?

What is Sybase’s secret? Chen says in the financial services space, it’s been their new real time analytics product, and the firm’s approach to selling, “I don’t pitch anything to our clients that they already have. In this market, you have to pitch something new, something better, something that adds value.” Chen says that 60% of Wall Street firms are Sybase users. They include broker-dealers, hedge funds and banks. Firms like Bank of America and ITG, long time customers, have recently become users of Sybase’s real time analytics product, which is a solution that helps firms move away from batch processing and allows them to manage enterprise data in real time. In financial services analyzing data in real time with no time lag is what gives traders and risk managers their edge.

Chen says he hasn’t seen the demand for the product from the traditional asset managers, but that could change as the buy side continues to take on some of the roles that they had traditionally outsourced to their sell side partners.

Another area where he expects to see growth is when broker-dealers start using the Sybase real time analytics product across multiple asset classes. He says it is product agnostic—data is data to the software.

One thing that he does see a demand for is an offering for smaller hedge funds. Hedge funds are traditionally out in front in terms of their technology usage but don’t always want to install, maintain and upgrade large platforms or databases. Chen says that the firm is working on offering its real time analytics product to hedge funds by hosting it for them. This will free them of maintenance and be a less expensive option than what some of the multi-billion dollar banks would need.

Chen acknowledges that he could roll out this service now to a few hedge funds as they have the hosting capabilities in India, however he’d rather wait and make the capital investment necessary to support a multitude of clients. As a result, he estimates the service to be released sometime next year.

Chen is a rare breed of CEO. He spends about 60% of his time with clients, trying to understand their needs and challenges. It is clear that despite working for a software company that services a wide variety of industries, he has a deep understanding of the financial services industry and more specifically trading. He notes that he also does his fair share of sales calls. When asked what city he calls home, he laughs, "With clients all over the world, I think I’ve slept in my own bed about three times this month, but the bay area is what I call home.” In a few weeks, Chen will embark on a 17-day trip through Asia.

After our lunch, Chen headed to the NYSE for an interview with CNBC

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