Welcome to the Sybase Q3 2007 earnings conference call. Thiscall is being recorded. Our speakers today are Chairman, Chief ExecutiveOfficer and President John Chen, Senior Vice President and Chief FinancialOfficer Pieter Van Der Vorst. They are joined by Vice President and CorporateController Jeff Ross. At this time I'd like to turn the conference over to JohnChen. Please go ahead. John Chen Good morning, everybody and welcome to our call. We'll beginwith Pieter providing the safe harbor language.

Good morning, everyone, and thank you very much. Todaycertain statements we'll make will be forward-looking statements, includingstatements regarding our future growth, future operating results, potentialbusiness combinations, market opportunities and business prospects. While theseforward-looking statements represent our current judgment on what the futureholds, they are subject to risks and uncertainties that could cause actualresults to differ materially. You are cautioned not to place undue reliance on theseforward-looking statements, which reflect our opinions only as of the date ofthis call. Also, please keep in mind that we are not obligating ourselves to reviseor publicly release the results of any revision of these forward-lookingstatements in light of new information or future events. Throughout today's discussion we will attempt to presentsome important factors relating to our business that may affect ourpredictions. Actual results and the direction of our progress and our futuregrowth, if any, could differ materially from statements we make or imply todayfor a variety of reasons. Those reasons are described in our press release andin our SEC filings, including our annual report on Form 10-K for the year endedDecember 31, 2006, and the quarterly reports on Form 10-Q for the three-monthperiods ended March 31, 2007 and June 30, 2007. All non-GAAP amounts disclosed in this conference call havebeen calculated and presented in accordance with the most directly comparable GAAPfinancial measures which posted in the earnings release section of our investorrelations website at www.Sybase.com. Back to you, John.

Thank you. We posted very strong third quarter financialresults and needless to say, we are all extremely pleased here with ourperformance. All three business segments delivered solid revenue and profitcontributions that met or exceeded our expectations. Total revenue increased 22% year over year to $255.3million. License revenue grew 12%. Services came in at $135.8 million, whichincluded a 4% increase in maintenance revenue, and messaging services came instrong at $34.3 million. Core database license revenue grew 18% and we saw 10%year-over-year growth in revenue in the iAnywhere segment with a 16% year overyear growth in iAnywhere license revenue. Year over year, non-GAAP operating income increased 40% andnon-GAAP operating margin is now at 22%. This represents 280 basis points aboveQ3 2006, which is year ago, and also represents six consecutive quarters ofexpansion. As a result, we are raising our EPS outlook for the fullyear 2007. Additionally, we reported non-GAAP fully diluted EPS of $0.47 ashare, which beats consensus earning estimate by $0.07 and exceeded our own EPSguidance. Cash flow from operation came in strong at $47.1 million. Basedon the strength of our expected full year earnings and our year-to-date cashflow, we are once again raising our full year 2007 guidance for cash flow fromoperations to approximately $210 million. During the quarter, we bought back$32.8 million worth of Sybase shares. The strong revenue and margin performance in each of ourthree business segments demonstrate the leverage and growing synergies in ourbusiness model. For example, a number of customers including Motorola, Kodak,ING, EMC, Nortel, United Bank of India, just to name a few, have increasedtheir investment in Sybase by buying products that cross multiple segments. Movingforward, we believe we can unlock greater synergies with our increasing numberof cross-selling opportunities. I'd like to spend some time highlighting each of thesegments. Starting with IPG, the Infrastructure Platform…

Thanks a lot, John. So let's get right to the math. Overallrevenue for 2007 third quarter increased 22% to $255.3 million compared with$209.1 million in the third quarter '06. License revenue for the quarter grew12% to $85.1 million. Services revenue was $135.8 million and messaging revenuewas $34.3 million. All geographies grew year over year. Total revenue for North America camein at $130.1 million representing 51% of total Q3 revenue. Europecame in at $87.5 million representing 34% of the total, and Intercontinentalregion, which includes Asia -Pacific and Latin America came in at $37.7 million representing 15% of theconsolidated total. Total non-GAAP expenses for the third quarter increased 18%to $198 million up from $168.2 million a year ago, and this year over yearincrease is primarily related to the addition of Mobile365. Non-GAAP operating income for the 2007 third quarterincreased 40% to $57.3 million, representing a 22% operating margin. Thiscompares with non-GAAP operating income of $40.9 million or an operating marginof 20% in the third quarter of '06. The company reported non-GAAP net income for 2007 thirdquarter of $42.8 million or diluted EPS of $0.47. This compares with non-GAAPnet income of $36.3 million or diluted EPS of $0.40 in the third quarter of2006. On a GAAP basis, operating income increased 39% year over year to $44.6million representing 17% operating margin. This amount includes $2.8 million of amortization ofintangibles related to the acquisition of Mobile 365. Ona GAAP basis that income increased 36% year over year to $34.1 million or $0.37per diluted share. A more detailed description of the reconciliation between GAAPand non-GAAP numbers is contained in the press release distributed pre-market. Our financial position continues to remain very strong. Thekey highlights from our balance sheet and cash flow statements are as follows:The cash balance at September 30, 2007was $717.3 million, which included restricted cash of $6.1 million. Cash flow from operations came in at $47.1 million. Capitalexpenditures were $5.3 million in Q3. Depreciation for the quarter was $6.8million. Capitalized software was $10.2 million. Amortization of capitalizedsoftware was $8 million. The accounts receivable net came in at $211.4 million. Thenthe DSO for the quarter on a consolidated basis was 75 days. Deferred revenuewas $199.3 million, up from $191.5 million for the same quarter in 2006. The maintenance renewal rate for Q3 remains consistent withour historic range of 90% to 95%, and the number of deals over a millionrepresented 21% of licensed revenue compared with 20% in the third quarter of'06. We finished the quarter with head count of 3,991. During the quarter, we repurchased $32.8 million worth ofSybase stock for a total of $91.4 million year to date, and there remains$158.4 million authorization in our stock repurchase program. Our 2007 thirdquarter non-GAAP tax rate was 32%. So those are the numbers. Now I'd like to give it back to John.

Thank you. Now onto our Q4 '07 guidance. We anticipaterevenue in the range of $280 million to $290 million and a non-GAAP EPS rangearound $0.54 to $0.56 per share. We expect the GAAP EPS to be in the range of$0.44 to $0.46. For full year 2007, we are once again raising our outlook forfull year non-GAAP EPS to a new range of $1.64 to $1.66 from our most recentguidance of approximately $1.56. Total revenue for 2007 is expected to range from $1.01billion to $1.02 billion. We're also raising our outlook for the GAAP EPS to arange of $1.25, or between $1.25 to $1.27 from a prior guidance ofapproximately $1.19. We are raising our guidance for cash flow from operations toapproximately $210 million compared to prior guidance of $195 million to $205million. Based on our confidence in the business, we continue to believe thatthe best use of capital at this time is in our own shares. Therefore, we willbe ramping up our share repurchase activities this quarter and beyond. While I'm not giving anybody official guidance for next year,as we are still working on our 2008 plans, we believe we can drive double-digitEPS growth from a combination of revenue growth, margin expansion, and moreaggressive buybacks. We will provide more specific 2008 guidance as iscustomary on our Q4 earnings call in the beginning of the year, January. Before I turn the call over to Q&A, I'd like to announcea couple of exciting changes and promotions in management. Upon filing the Form10-Q for 2007 third quarter, which will be about early November, Pieter willassume the roll of general manager of the EMEA region. He'll be moving to Londonwhere he'll be paying a lot more money for the rent. He'll be managing thefield and business operation in the EMEA region, reporting to Steve Capelli,…

Thank you, John. First, I'd like to welcome Jeff into thenew role of CFO. I hired Jeff about ten years ago and I've worked closely withhim for the last ten years. He's risen through the ranks of the financeorganization. Jeff is very familiar with all aspects of Sybase and I think he'swell prepared for this opportunity. Congratulations, Jeff. I know you'll do agreat job. As for me, I'll be around for the next month to ensure asmooth transition before I leave for Londonin early December. It has been great working as a CFO with John for the lasteight years. John has been a great mentor to me and has been instrumental in myprofessional development and growth. Over these last eight years I've had anopportunity to work with all different parts of the organization, traveled theglobe, meet customers, shareholders and the financial community and grow andtransform the business. Now, I feel ready to take on a new opportunity. I'm veryexcited about moving to Europe to run this field businessoperation. As many of you know, I am Dutch so being of European heritage andhaving spent a lot of time in Europe as the CFO, I am really well acquaintedwith the operations over there and familiar and comfortable with their cultureand way of doing business. It's really an exciting time to be at Sybase and it's been arewarding journey for me so far. I look forward to contributing in a new way tothe company's growth and development. Lastly, I do want to thank John andeveryone within Sybase for their support over the last eight years. I’d alsolike to thank all of you on the call today for your support for both me and forSybase. With that, I think we're ready to go to the operator to takesome Q&A.

(Operator instructions) Our first question will come fromAlan Cooke with Merrill Lynch.

Can you tell us about the strength in database licenses?What do you attribute it to? Did you benefit from deals that slipped from Q2 orwas it better execution?

Alan, that's a loaded question. There’s never been executionproblems. So yes, the very view that I told you all that we did not take, let'ssay that it was not really ready at the end of Q2 because we didn't like theterms, we did negotiate better terms and closed the deal.

How was the pipeline looking in general? Do you have anyconcerns over spending, particularly within your financial services customers?

We have not; that's interesting. I've been monitoring all mypeers in the industry and I've been talking to many customers. I was in New York last week also. We have not seen the slowdown inQ3. But I'm a little bit cautious, just being a little guarded. That's why Igave a rather large range of revenue predictions, guidance in Q4 of $280 millionto $290 million. We are very reliant on the financial vertical; as you know,about 20% of our business comes from verticals. So, I'm watching thatcarefully. We have not seen the signal that people are not buying yet, especially,the pipeline that we're planning on. I have reaffirmed some of those. But it seemslike every day there's more bad news on Wall Street. I hope it's going tosubside. So, the answer to your question is, it's in some way factored into ourguidance.

With respect to the iAnywhere business, it had its secondstraight good quarter. Do you think the execution issues in that business arebehind us for good?

Well, never say never. We have a much tighter execution. I'mvery pleased of where we are in terms of our region and the management of it.We also have increased the cross synergy between iAnywhere and IPG, which helpslot.

Yes, I noticed the database business sold more in terms oflicense revenues. Do you think that will continue?

Yes, that's the plan. Just to remind everybody -- Alan,thank you for bringing this up – at the beginning of the year, I told everybodythat we're running those three segments. They have a lot of interdependency andthey draw on each other's strength. The future is going to come from thesynergy among these segments, and we're seeing that. We're seeing the fields are selling a lot more, the IPGfield, the database field, are selling a lot more other products including theiAnywhere product as well as messaging and services product. I point out a fewexamples of that and we're expecting to see more and more of those goingforward.

How are you encouraging the field to do more of that?

Well it's only one thing. It all comes down to credit andcommission structures.

And has it changed?

We have not dramatically changed it today, but it willcontinue to evolve. We have a plan to do it in multiple years so that we don'tjust kind of skew one way too quickly, because we can’t take our eyes off theball. We're moderating this thing as we move forward.

You updated your guidance for Mobile 360 or Sybase 365 forthis fiscal year. Are you updating it for next year? Because you had givenguidance a year ago on that business as well.

No, the reason is we're still doing the budgeting. Yesterdaywas the first time that Marty and I met on talking about what the budget maylook like. So no, we don't have it yet, actually. We may have some sense, butwe don't have it.

And in terms of synergies between Sybase 365 and the othertwo business units, what are you seeing there?

Well, the 365, let me talk about what 365 actuallyrepresents. Because I think there might be some confusion. I hear someshareholders think that this is kind of a side business. We look at 365, if youthink about it, as an application server environment for a mobile play. This isno different from an AP server like web suite or web logic for the web-basedtechnology. So in a mobile world, you need a messaging platform tocommunicate those APs, to launch and communicate between those APs. So the 365messaging platform is designed for that and we're moving a lot of technologyinto it to booster it to be like that. So we're really not only focusing on being a messagingbusiness, although this happened to be a recently good and exciting business,but it really ties back into where we want to see the enterprise strategy togo. Think about 365 eventually would become the mobile web server.

Okay, great. And than in terms of your operating margin, youhad a very strong operating margin this quarter, I noticed that sales costswere flat in dollar terms, G&A dollars were down. Can we expect this tocontinue going forward, and is the operating margin expansion sustainable?

Let me talk about it in an overall picture. I think in thebeginning of the year, because of 365, we bought in November, we were a littlebit more conservative, prudently so, that we said, the margin for the year maybe down a little bit compared to year 2006. And then at the last quarter we saidit will be flattish. And than now we think it's going to be up from last year. Prior to that, if you look at our history in the four yearsin a row, we've been expanding it by 100 basis points every year. So goingforward, I think you should continue to expect that we could expand it by atleast 100 basis points.

In terms of your buybacks, you talked about the fact thatyou were going to accelerate the buybacks. Do you anticipate increasing the buybackprogram? And by what sort of measure do you think you'll accelerate the pace ofbuybacks?

Well currently, we have $154 million left in theauthorization. Our plan here is to potentially buy over $50 million everyquarter at the minimum. So you should see us going in and buying at that level thisquarter, next quarter until we exhaust it, then we'll go back to the board anddiscuss with the board how we could best use to capital. Most likely, given our track records, I think by now we havebought back $700 million worth since I came. So we would expect us to continueto do so. Most likely we'll go back to the board and ask for additionalapproval.

Okay. Just with respect to that, though, $50 million aquarter, in all likelihood, your cash balance will keep on going up. Do youneed to have all of that cash on your balance sheet?

Well, actually this is the subject a lot of people have a lotof opinions on. So the first answer to your question is there are a lot ofshareholders that have expressed, you know, their opinion to us that economicenvironment like this may be it's good to be a little bit more conservative andprudent to hold onto some of the cash. There is also this concern that, you know, maybe we're justgoing to go ready for big acquisitions. I can tell you all that I don't havethat in mind. We're not working on one right now. That won't say we'll neverwork on one, we don't have one big acquisition in mind.

Okay. Thank you very much.

Keeping the powder  dry.As then as we see our cash flow environment continue to do well, economicenvironment to do well, you may see us even more aggressive on the buyback.

Our next question is from Robert Schwartz with Jefferies& Company. Robert Schwartz -Jefferies & Company: Okay. I have a couple of general questions. Maybe we couldtalk a little bit about the IPG group, which had really had great success. Whatare the catalysts you're seeing for that success continuing to go forward inIPG? Can you sustain the double-digit growth?

Double-digit growth? The plan could sustain double-digits inlicense. On the segment we've always been planning for around 6% growth andthat will imply double-digit growth in license revenue. You're correct. And yes, the answer to your question, we're planning onthat. There are a couple of things that will help us a lot. The ASE 15 is notcompletely done yet, although you will see that slowdown as we see it. But onthe other hand, the IQ engine is swapping up pretty high, very quickly andgrowing really well, and it has a lot to do with the analytics needs now outthere. Recently, obviously we already closed two deals on riskanalytics so in the last quarter and so for all the obvious reasons. I talkabout when IQ wins with one other agency there. And so we have seen a lot ofpickup there. Then, of course, next year we got the Sybase cluster comesout. The second half of that into 2008 we'll probably see some good benefitsfrom that, and then a lot of the banking solutions we talk about with messagingwill help us sell the database license also. So a combination of all that, and then there was middlewarelike web servers and mirror activators, lots of interest out there in themarket, we're doing a lot of either proof of concepts or presentations, thatshould also build up some good pipeline conversion into good revenue. The answer to your question is the chances are us growingdouble-digit license in the teens at least of IPG should be part of reasonableexpectations. Robert Schwartz -Jefferies & Company: You had tremendous growth in your messaging, but I think theestimates out there are for something about like 26% growth rate in messagingvolume. And you're growing a little bit slower than that. How do I reconcileyour share?

We haven't even got to the first year yet. I don't knowwhere you got my going slowly. Robert Schwartz -Jefferies & Company: Industry analysts talking about industry. We've seen reportsthat say it's growing.

I don't have the number to compare to a year ago. I don'tthink you're right on that one. Robert Schwartz -Jefferies & Company: Okay. The next question which is for Pieter, if I look atthe cash flows from operations, the last four quarters they have been at 70,54, 47 this quarter and the guidance kind of implies 35. Is there a structuralreason why cash flow from operations is sort of trending down for the quarter,quarter to quarter during the year?

No, I think that if I looked at it, I thought that thenumber was a little bit higher than that. Our expectations for the fourthquarter would be around -- would be around…

Should be about $50 million.

Yes, it should be around $50 million. So, the 210 millionnumber may be a little conservative. But I think that’s, that at this point, iswhere we're comfortable. Robert Schwartz -Jefferies & Company: Okay. That's very helpful. Maybe one more, are you puttingany special spiffs around IQ to push its growth and is it being handled by aseparate sales organization?

No. It's been handled completely by the database salesforce.

Our next question is from Terry Tillman, SunTrust RobertsonHumphrey.

John, it's nice to see all three businesses do well in thequarter. Pieter, good luck and Jeff, congratulations.

Thank you.

So, with that out of the way, I guess the one thing, John, Ifelt like last quarter, I don't want to say you were warning us, but you weregiving I thought cautionary language that at some points the benefits fromASC15 will start to wane. And it almost feels like to, I guess Alan's questionearlier, there maybe your tone is a little bit more optimistic, though, or am Ireading it wrong? Is it beyond the upgrades and its now about workloads andjust new customers?

To be honest with you, Terry, I didn't -- I don't think Iwas negative last quarter. I'm sorry if I came across that way and you all readit that way. I just want everybody to be aware of the fact that, the 20 somepercent growth that we’d experienced for a couple of quarters, that is notgoing to happen because like you see the pipeline and the early adoptersalready jumped in, the pent-up demand starting to go through the system. So, but that said, we have 10,000 ASC customers out there.By the end of 2009, they will all have to be upgraded. Okay, now, that doesn'tmean that because they are all paying us maintenance and upgrade on a regularbasis, that doesn't mean that they will give me any more revenue, licenserevenue. On the other hand we expect about 30% of that 10,000 base toupgrade to encryption and or -- I have a mental block. The two options we'reselling the most. Partitioning and encryption technology we expect that thosetwo options to penetrate about 30%. So we're not through that process yet. Imean we still have room to grow in that. Then on top of that when you have a renewal -- when theyhave to move to upgrade today ASC15 that gives us a chance to sit down with ourcustomers to discuss their future needs, and that would be the another sellingopportunity. So you would assume that activities will pick up. I was just a little more caution for everybody so it doesn'tjust kind of get overly high on expectation and then we kind of disappointpeople along the way with very high bars. And that's the only reason. But therewere no negative structural business reasons for me. In addition to that, in fact, there was a lot of positive init. And obviously, IQ growing also helps a lot, so both of them are actuallydriving growth right now. The shared disk cluster, I've got 12 customers got thesoftware. About half of them already loaded. A couple even have benchmarks theysent us, which all looks very good. And I met one of them, one of the majorbanks on Wall Street last week on shared disk cluster, which they are on beta andthey're very hyped on it. And so we expect obviously they will be one of theearly customers on that. So there is a lot of good things happening for us. I don'twant to be overly positive or overly negative. Last quarter if I came acrossoverly negative, I apologizes, because it was not meant to be. This quarter I'mnot giving you a different signal they all sudden be overly positive, but I ampositive about business.

Okay. And then just secondly, with encryption andpartitioning being the two key options that have taken hold right now, couldyou help us though when we start to think about shared disk cluster? First, howwould the economics work? If you get a dollar for each of encryption and partitionwould it be kind of in parity with shared disk cluster or can you garner moreout of each customer on a per unit basis with that option?

Okay. So I don't know the answer to the question that way,but let me give you some data points so we’ve got all the pieces together. Thedata points are -- we also expected about 30% of our installed base willupgrade to share disc cluster over the lifetime share disc cluster, will beprobably18 months, I suppose, the early cycle. So, it's priced as exactly asOracle Rack, right now. They also see by the way 30 plus% of their space upgraded toOracle Rack, I mean Oracle database. So, I think we're very, very competitivein that perspective. I don't know if it's one for one. I don't have thatparticular set of math in my head. We expected to have about 100 customers sign on and pay usnext year. And those mostly will be in the second half because the beta’s goingon we’re going to release in the first quarter of next year, the GA. And then,the sale cycle will gradually push us into Q3 and Q4.

Okay. That's very helpful. And then just, as I promised,just three questions. The last one as it relates to Financial Fusion and thework you've done in Internet banking. Can you remind us, how many customers youhave and what could be the adoption or attach rate of mobile banking with theSybase 365 technologies in that install base?

Okay. So, we have 60 customers worldwide on FFI. And, themobile banking, Internet banking messaging services, the obvious pool ofcustomers are those 60. I expect high penetration, at least over half of that.So, far it seems to be a pretty easy, understandable and acceptable concept forcustomers. But I wanted to make sure everybody knows that this goes waybeyond the FFI base. We have a plan to launch pretty much across all i-bankcustomers, whether it's FFI or not.

Okay. Thanks, again.

Okay. Thank you.

And, we'll next go to Kirk Materne with Banc of AmericaSecurities.

John, in your opening statement you talked about having somecross-selling opportunities across the multiple segments of your business. Canyou provide more granularity on that, meaning when you look at Sybase 365relative to your IPG business. Do you win the Sybase 365 business because you're a database?If the database wasn't there, would you have won the deal? Was it the samesales guy? I guess, I'm trying to figure out whether it's thetechnology, the way you go to market. Because they’re a customer doesn'tnecessarily mean-- a previous customer doesn't necessarily mean there'ssynergies there.

Absolutely. Good question. Number one; different salesforce. Number two; we win a lot by Sybase opening doors and then 365 goes in.And number three; there are a lot of customers, who 365 used to be not able toclose the deal. Sybase was able to help them close the deal because of not onlyour size is relative to 365, but also our relationship with the account. United Bank, IndiaBank, that deal is a classic example where they knew us, they are customers ofours on the database side. We're able to take our messaging capability in andclose that deal. Prior to that, one of the high profile ones was China Mobileand the same scenario. Citizen’s Bank, same scenario. It's more credibility anddoor openers and relationship building on that. But no, it doesn't have to beSybase database. In fact, that has nothing to do with what it is today. Now, the 365 messaging technology will find its way incombination with a lot of the IPG core technology. And with that like in the IQanalytics world, we could envision seeing mobile analytics. So those, two comestogether will provide that our capability. So those are all positive trendsgoing forward. As I talked a little bit earlier when Alan was chatting withus, you really need to look at 365 as the future AP servers in the mobile worldand that has always been our vision. That's been our vision, when we made theacquisitions. Without the messaging infrastructures you really can't do any ofthe M banking or the M commerce, so application cannot talk to each other. So,this is the vehicle and this is the platform. That's it. That's what we'reworking towards.

Can the Sybase 365 sales reps sell IQ into their customerbase right now, or do they have to sort of bring over say an IPG salesperson todo that with them?

Only in terms of technical parts. The 365, in terms of rules of engagement,they certainly could rep and sell any of the products, and we have an internalway to settle the transfer of credits. Marty knows that. Marty is verycomfortable with that. In fact, Marty is going to start focusing selling one ofthe iAnywhere products, which is Answer Anywhere, and we just worked that outyesterday. So, the answer to your question, there's no restriction interms of, artificial restriction of any sort, but there is a restriction ontechnical capability. It's one way of selling 365 messaging technology it's acomplete different way of selling IQ.

Pieter, just around Sybase 365, two questions. First on thegross margin side, looks like gross margins went down a little bit thisquarter. Just anything to read into that? I guess, I know it's still withinsort of the range you've given, but any thoughts on that? Heading from December to March, what should we be thinkingabout perhaps seasonality wise for Sybase 365 from say December to March, doesit have traditional seasonality within software’s that should be a little bitmore linear?

Well, we haven't provided any guidance for '08 with respectto what we think is going to happen with 365, so we probably want to wait untilthe fourth quarter to talk about that. But there is nothing in my mind unusual about what's goingon from a margin point of view. The mix between the a.m and p.m. business we'llhave those margins move around a little bit. But nothing unusual in terms ofany activities that need to be highlighted.

So, I should assume that was more sort of p.m. - heavy thisquarter, which is higher volume, higher cost? Is that the way to think aboutit?

No, actually no, I think it would be the inverse. I thinkthat shows there's growth in the business, which has a slightly higher burdenfrom a gross margin point of view.

Terry, it's also depending on the mix of internationalversus domestic.I know it's somewhat confusing, but we have it under control.But it's really a mixed part of it.

There's nothing unusual going on there. That's just thenormal mix of the products.

Our next question is from Trip Chowdhry with Global EquitiesResearch.

Thank you and congratulations on very good execution. A fewthings, John, what are you seeing in the global markets relatively to saywhat's happening in U.S. both in core database products as well as in mobilearea? And I have a follow-up question.

I missed the second part. The database market as well as what?

In mobile, the Sybase 365 market.

Right. Right. I mean, the core database, there's no, thereis really not much change to the core database landscape. Their entire marketis growing single digit, mid-to-high, it's been sorted out, the samecompetitive landscape. There are a couple of startup companies in Chinathat would like to challenge our positions a little bit. I really haven't seena lot of – really pressure from that as yet. The open source world, I haven'tseen lots of that either I mean, In fact, I don't think I've seen any. That maybe too strong a statement, but it hasn't really bubbled up to me from the salesorganization. And it tells me there's something that structurally may bechanging. So, that's that part. And mobile is going really, reallyfast in 365. The messaging part outside of the United States, are really -- they are reallygrowing. And in fact, that ties up to a little bit of what Pieter explained toKirk a little about the margin part of it. We are seeing very robust growth in messaging in Europe,we are seeing very robust growing messaging in Asia Pac. And some of the coststructures there well per messages we do need to deal with. So, but volume willtake care of it.

Beautiful. And also, last quarter you announced databaseappliance, I believe, based on some virtualization technology. I was wondering,are you seeing any pickup on it yet or is it’s still a little early?

I feel it's a little early. Obviously, we supportvirtualizations with Red Hat as well as Microsoft for that matter. And we areworking on virtualization with other Linux player. I don't want to name thenames right now because we haven't signed anything on the dotted line. We feellike the market is still a little early for us in terms of selling thoseappliances into those environments.

And we do have time for one more question is from SteveKoenig, with KeyBanc.

One quick question on each business; let's start withmaintenance. A lot of that is IPG. 4% increase year-on-year this year. I assumethat some of that was the cost of living kicking in. How long can we expect tosee that continue?

No, actually that was based on license growth over the lastcouple of quarters. The cost of living adjustment kicked in actually October1st.

Does that suggest that we ought to be able to sustain thesort of year on year for a quarter or two or 12 months? Any sense on that?

Yes, we've been averaging 4% increase in the last three orfour quarters on maintenance. I think that's a fairly reasonable bet.

On iAnywhere can you give us a little bit of a sense forsales execution there? Licenses were good this quarter, services were a littlelighter. In terms of the contracts there, how did named accounts do iniAnywhere versus OEM? What was kind of the composition of the business?

Interesting. There was only one large OEM deal in thequarter, so I have to say it's going to be more of the name account. Seems tome that the VO base was quite active in the past quarter.

On 365, you're showing some good progress on margin. WhatI'm curious about is ultimately in the business do you think that you can getthose margins to the Sybase 20% level? Especially given kind of thefragmentation in the market for the application business, where can thosemargins ultimately go? Not this quarter or next or even in '08, but where canwe get them to?

Well, I'm a stubborn person. I think we could. It depends onwhat value added services we have. The messaging business itself today, we aredoing very well getting the margin into, let's say 10%, I'm sure there's stillgrowth in that. We'll do better than 10%, on a year basis, that is goingforward. We're going to look in hosting some of the Sybase core technology likeIQ, One Bridge, we are going to wide label some of the technology to go intomobile advertising channeling for telcos, and so it depends on what you sell totelcos. If the question is just by providing messaging services, amI going to see 20%? Probably not., but I probably will see 10%. But by doingadded value services, will I be able to see 20%? I wouldn't rule out at all.

I probably won't get there in 2008. I know I won't get therein 2008. I will tell you I will not rule that out in the future.

With that, I'd like to turn the call to John Chen for aclosing comment.

Very good. So, thank you for participating in the calltoday. Jeff and I will be returning next quarter to report our progress andachievement. In the meantime, if you have any questions, please feel free tocontact us. We all wish Pieter the best of luck, as long as he doesn'tcome over and hug me. Have a good day, everybody.