7th Annual Pan European Small & Mid Cap Conference - Software AG

7th Annual Pan European 

Small & Mid Cap Conference 

Arnd Zinnhardt, CFO 

Software AG 

This presentation contains forward-looking statements based on beliefs of Software AG management. Such statements 

reflect current views of Software AG with respect to future events and results and are subject to risks and 

uncertainties. Actual results may vary materially from those projected here, due to factors including changes in 

general economic and business conditions, changes in currency exchange, the introduction of competing products, lack 

of market acceptance of new products, services or technologies and changes in business strategy. Software AG does 

not intend or assume any obligation to update these forward-looking statements.

Company Profile 

Business: System software provider for IT infrastructure 

- Enterprise transaction systems (Business Line ETS) 

- Enterprise SOA based integration solutions (Business Line 

Crossvision) 

Founded: 1969 in Darmstadt, Germany 

Revenue: € 483 million (2006; +10% vs. 2005) 

- License Revenue: € 166 million (+ 26% vs 2005) 

EBIT Margin: 23% (2006; 22% in 2005) 

Employees: 2,700 worldwide 

Customers: 3,000 worldwide across all industries 

Distribution: Global provider and support (more than 70 countries) 

Listing: Frankfurt Stock Exchange (TecDAX, ISIN DE 0003304002 / SOW) 

MarketCap: ~ € 1.6 bn. / ~ US$ 2.1 bn. 

(28.4 million shares, 70.75% Free Float) 

EPS: € 2.60 (€ 2.24 in 2005) 

Dividend: € 0.90 (proposal 2006) / € 0.80 (2005) 

Software AG | 22 March 2007 | Page 2

Main Geographic Markets 2006 

Revenue Share: 

Others 

23% (23%) 

New Markets 

12% (11%) 

UK 

8% (7%) 

Total FY 2006: 483.0 mn. € 

(FY 2005: 438.0 mn. €) 

Software AG | 22 March 2007 | Page 3 

USA/Canada 

26% (26%) 

Spain 

17% (18%) 

Germany 

14% (15%) 

2006 

2005 

2006 

2005 

2006 

2005 

2006 

2005 

2006 

2005 

USA/Canada 

Spain 

Germany 

New Markets 

UK 

28.7 

47.4 

37.0 

57.5 

66.7 

77.8 

69.7 

83.6 

113.0 

127.6 

Growth 

yoy 

+13% 

+7% 

+4% 

+21% 

+29%

3,000 Customers Worldwide in All Industries 

Financial Services 

Public Institutions 


3,000 Customers Worldwide in All Industries 

Travel & Transport 

Media & Telecommunications 

Public Institutions 

Retail & Manufacturing 


Business Model / Revenue Structure 

34% 

39% 

26% 

in % of total revenue 2006 (483 mn. €) 


License 

• Direct Sales Force 

• One-time payment for perpetual license 

• Additional payment for capacity upgrades and Add-on products 

• Price: Capacity/MIPS based (database) 

User/Seats based (tools) 

Maintenance 

• Annual contracts with automatic renewal and 3-5 year 

contracts 

• Operational support and functional upgrades of software 

products 

• Price: around 15% of license list price 

Project Services 

• Implementation of own products / system integration 

• Cost plus or fixed price projects 

• Own staff + freelance

Characteristics of the Businesses 

Enterprise Transaction Systems (ETS) 

Business 

• Database (Adabas) and programming language 

(Natural) 

• Add-on products (enhance usage) 

Market environment – Mainframe/legacy market 

• Supplier power: market highly concentrated 

• Buyer power: significant switching costs 

• High barriers to entry: proprietary know-how 

• Threat of substitutes: no new market entrants 

• Degree of rivalry: oligopolistic supplier structure 

Position of Software AG 

• No 2 in mainframe market, after IBM 

Core Competence / Competitive Advantage 

• Platform neutral, high performance, low TCO 

• High customer loyalty 

Goal 

• Use leading position for revenue growth with 

add-on products and legacy modernization. 


Crossvision (SOA Integration) 

Business 

• Reuse and web-enable existing IT assets 

• Integrate heterogeneous IT- assets into flexible, 

architectures 

Market environment – SOA market 

• Two segments: platform and suite offerings 

• Strong competition within segments 

Position of Software AG 

• No 1 in SOA product strategy, Forrester 

• Top Five in Integration-Centric PPM 

• Partner of platform vendors (SAP, Fujitsu) 

Core Competence / Uniqueness of offering 

• Only suite vendor with ability for legacy integration 

• Suite offers the complete range of SOA products and 

full flexibility for customer requirements (no lock-in) 

• Leading SOA Governance product 

Goal 

• Reach leading position through fast revenue growth 

with new products.

Focused on Two Business Lines 

Established Business: 

Enterprise Transaction Systems (ETS) 

Maintenance 

46% 

License Services 

35% 19% 

High margin business 

Highly cash generative 

High customer loyalty 

Recurring revenue stream 

Value generating with limited 

risk profile 

Optimize revenue 

from existing customers 


New Business: 

Crossvision (SOA integration) 

Maintenance 

24% 

License 

40% 

Services 

36% 

Cross-selling into existing 

customer base 

Win new customers 

and partners 

Leverage next wave in 

IT-industry 

Revenue in 2006: € 350 million Revenue in 2006: € 108 million

Customer-Focused Portfolio (step 1) 

Customers 

new 

customers 

3,000 

existing 

customers 


ETS 

Legacy Modernization 

cross selling 

Legacy 

Modernization 

new SOA / 

Integration 

Products

Customer-Focused Portfolio (step 2) 

Customers 

new 

customers 

3,000 

existing 

customers 


ETS 

cross selling 

direct selling and takeover 

customers from Software 

AG’s distributors 


new 

selling 

cross selling 

Legacy 

Modernization 

Accelerated via: 

• vertical focus 

• dedicated sales force 

• partners 

new SOA / 

Integration 

Products

Position in the SOA Market 

Platform 

Vendors 


Suite Vendors Niche Players

Crossvision Suite 

6 integrated components 


CentraSite is the key to the suite

Leadership in the SOA Segments 

Enterprise Service Bus and SOA Governance and BPM 

Strong 

Current 

offering 

Weak 

Leaders 

Software AG is a leader 

in SOA — ESB 

Strategy Strong 

Source: The Forrester Wave TM : Enterprise 

Service Bus, Q2 2006 

by Ken Vollmer and Mike Gilpin. 

Strong Performers 



is No 1 in 

SOA offering 


is No 1 in 

product 

strategy 

Contenders 

Risky Bets 

Strong 

Current 

offering 

Weak 

Software AG is a leader 

in Governance & BPM 

Strategy Strong 

Source: The Forrester Wave TM : Integration- 

Centric Business Process Management Suites, 

Q4 2006 by Ken Vollmer and Henry Peyret.

Growth in Key Financials 

(in mn. €) 

175 

150 

125 

100 

75 

50 

25 

0 

FY 

03 

License Revenue EBIT* EPS** 

+9% 

FY 

04 

+15% 

FY 

05 

+26% 

FY 

06 

* EBIT before income from investment 


FY 

03 

+42% 

FY 

04 

+15% 

FY 

05 

+15% 

FY 

06 

FY 

03 

FY 

04 

** Number of shares outstanding: 28.4 mn. 

2004 pro forma without earnings from divestment 

+15% 

FY 

05 

+16% 

FY 

06 

(in €) 

3.0 

2.5 

2 

1.5 

1 

0.5 

0

Outlook 2007 - Growth in Revenue and Profit 

Revenue 

-Licensing 

- Maintenance 

- Services 

Revenue BL ETS 

Revenue BL crossvision 


2006a 

(in €m) 

483.0 

165.7 

187.3 

126.2 

350.0 

107.9 

2007 Forecast* update (previous) 

Growth: 14% (10%) 

Growth: 22 to 27% (20 to 25%) 

Growth: 5 to 7% (3 to 5%) 

Growth: 12 to 15% (3 to 5%) 

Growth: 8 to 10 % (5 to 7%) 

Growth: 20 to 30% (unchanged) 

EBIT Margin (Group) 23.0 Growth: 1 pp to 24% (unchanged) 

EPS (in €) 2.60 

* Change vs. FY 2006 at constant currency (Euro / USD rate 1 : 1.255) 

Growth: 3.00 to 3.20 (2.90 to 3.10)

Growth Drivers 

Portfolio 

Enhancement 

Geographic 

Expansion 

Sales & 

Marketing 

Increase 

Partner 

Networking 


Adabas 2006 (shipment Q1/2006) 

Natural 2006 (shipment Q1/2006) 

Crossvision Suite (shipment Q2/2006) 

New markets (Latin America, Middle East, Eastern Europe, Asia) 

Start direct sales in Japan (Q4/2006) 

Start direct sales in Brazil (Q1/2008) 

Increased marketing investment 

Sales Force Skill Development (increased efficiency) 

New global branding starts Q1 2007 

System integrators, e.g. Atos Origin (UK); Bearing Point (US) 

Technology partners, e.g. Fujitsu, IDS Scheer, SAP, ILOG 

CentraSite Community (approx. 20 software vendors)

Software AG Growth Strategy 

5 Year Vision: €1 billion Revenue by 2011 

(in €) 

483 m 

+14%* 


Revenue more than doubling 

+60% (organic) 

1 bn 

100 m 

2006 2007 2011 

* at constant curreny 

Acquisition(s) 

• Partner sales 

• Geographic expansion 

(e.g. Brazil, Japan) 

• Growth in 

established markets 

(new and existing 

customers)

Appendix 

Key Financial Ratios & Latest Financial Results 

Stock Information 

Products and Market Details 


Key Financial Results Ratios & 

Latest Financial Results 


Key Financial Ratios (IFRS) 

1. Adjusted by sale of SAP SI shares in Q2 2004 

2. Net operating profit after tax = op. PbT ./. tax rate x (op. PbT + goodwill) 

3. Operating EBIT / Equity 

4. Operating PBT / (Fixed assets + Working capital) 


FY 2006 

FY 2005 FY 2004 FY 2003 

Operating EBITDA1 margin (% of revenue) 24.7% 23.8% 23.1% 16.6% 

Operating EBIT1 margin (% of revenue) 23.0% 22.0% 

Operating PbT 24.5% 

15.2% 

11.6% 

26.4% 

26.7% 

n/a 

42.5% 

12.7% 

38.3% 

€5.2m 

9.2% 

109 

€8.2m 

€444.0m 

1 20.4% 14.1% 

margin (% of revenue) 23.1% 21.2% 

NOPAT 12.9% 

5.3% 

25.9% 

26.3% 

3.3% 

23.5% 

16.5% 

39% 

€6.9m 

8.7% 

95 

2 14.7% 

margin (% of revenue) 14.1% 

9.5% 

Free Cash Flow margin (% of revenue) 10.4% 

1.4% 

ROE 21.9% 

23.4% 

0.0% 

1.1% 

21% 

39% 

€7.6m 

7.4% 

99 

€9.3m €10.8m 

3 24.5% 

ROCE4 24.1% 

Dividend yield (based on Ø share price) 5 2.4% 

Working Capital (% of revenue) 6 35.8% 

R&D (% of product revenue) 13.8% 

Normalized corporate tax rate 39.0% 

Capex €10.1m 

WACC 8.2% 

DSO7 105 

Depreciation 

€7.9m 

Capital Employed €318.7m €252.1m 

8 €399.6m 

5. Depending AGM decision 

6. Current assets ./. Current liabilities /Total revenue 

7. Without Factoring 

8. Fixed assets + Working capital

Revenue Q4 / Full Year 2006 

Q4 2006 2005 Δ % 

Product 

License 

Maintenance 


90.0 

43.4 + 25% 

46.6 - 3% 

Δ% 

at constant 

currency 

+ 31% 

+ 1% 

Service 33.1 32.7 + 1% + 2% 

Other 2.0 0.9 

TOTAL 134.4 123.6 + 9% + 13% 

FY 2006 2005 Δ % 

Product 

License 

Maintenance 

99.3 

54.1 

45.2 

353.0 

165.7 

187.3 

313.0 

131.6 

181.4 

Service 126.2 122.7 

Other 3.8 2.3 

TOTAL 483.0 

438.0 

+ 10% + 15% 

Δ% 

at constant 

currency 

+ 13% + 14% 

+ 26% + 28% 

+ 3% + 4% 

+ 3% 

+ 10% 

+ 3% 

+ 11% 

(in mn. euros)

License Revenue by Product Suite Q4 / Full Year 2006 

Q4 2006 2005 Δ % 

ETS* 

37.6 

Δ% 

at constant 

currency 

(in mn. euros) 

* Enterprise Transaction Systems (Adabas and Natural) ** Compares to XML Integration Software AG products of previous year 


32.5 

Crossvision** 15.3 9.3 +65% 

Third Party 0.8 1.2 

All Other 0.4 0.4 

+16% 

+22% 

+72% 

TOTAL 54.1 43.4 +25% +31% 

FY 2006 2005 Δ % 

ETS* 

121.7 

96.0 

Crossvision** 41.6 26.0 +60% 

Third Party 1.8 4.3 

All Other 0.6 5.3 

+27% 

Δ% 

at constant 

currency 

+29% 

+63% 

TOTAL 165.7 131.6 +26% +28%

Growth in Both Business Lines 

Revenue by Business Line (FY € millions) 

91.5 

38.3 

22.9 

30.3 

Crossvision 

+18% / 

+23%* 

107.9 

39.1 

25.4 

43.4 


Enterprise Transaction 

Systems (ETS) 

+8% 

325.2 

73.1 

156.1 

96.0 

350.0 

68.0 

160.3 

121.7 

2005 2006 2005 2006 

License Maintenance Services & Other 

* net of currency and excl. third party 

license rev. (2006: 1.8 m€; 2005: 4.3 m€)

Headcount by Functional Areas* 

in FTE 

Total 

Sales & Marketing 

Maintenance & Service 

R&D 

Mgmt & Admin 

* According to P+L cost structure 


Dec 31, 

2006 

2,62 

590 

1,19 

401 

440 

Sept 30, 

2006 

2,66 

623 

1,21 

386 

446 

Δ% 

qoq 

-2% 

-5% 

-2% 

+4% 

-1% 

Dec 31, 

2005 

2,75 

633 

1,29 

371 

450 

Δ% 

yoy 

-5% 

-7% 

-8% 

+8% 

-2%

Operating Result Q4 / Full Year 2006 

Total Revenue 

Cost of Sales 

Gross Profit 

Margin in % 

R&D 

Sales & Marketing 

Mgmt & Admin 

Other income/expense 

EBIT 

Margin in % 


Q4 

2006 

Q4 

2005 

Δ 

% 

FY 

2006 

FY 

2005 

134.4 123.6 +9% 483.0 438.0 +10% 

-42.8 -38.6 +11% -149.5 -143.5 +4% 

91.6 

68.2% 

85.0 

68.8% 

+8% 333.5 

69.0% 

294.5 

67.2% 

Δ 

% 

+13% 

-11.5 -10.7 +7% -44.9 -43.2 +4% 

-33.3 -33.4 0% -127.2 -109.1 +17% 

-14.4 -14.9 -3% -52.3 -48.3 +8% 

+2.0 +2.9 +2.1 +2.5 

34.4 

25.6% 

28.9 

23.4% 

+19% 111.2 

23.0% 

96.4 

22.0% 


+15%

Net Result Q4 / Full Year 2006 

Average number of shares 28.1 28.0 28.1 27.5 

(in mn.) 


Q4 

2006 

EBIT 34.4 

Q4 

2005 

28.9 

Δ 

% 

FY 

2006 

+19% 111.2 

FY 

2005 


Δ 

% 

96.4 +15% 

Financial income +0.9 +0.6 +50% +7.4 +4.7 +57% 

Profit before tax 

Margin in % 

Taxes 

Tax Rate in % 

Net income 

Margin in % 

35.3 

26.3% 

-13.0 

37.4% 

22.3 

16.6% 

29.5 

23.9% 

-10.7 

36.3% 

18.8 

15.2% 

+20% 118.6 

24.5% 

+22% -45.4 

38.4% 

+19% 73.2 

15.2% 

101.1 

23.1% 

-39.3 

38.9% 

61.8 

14.1% 

+17% 

+16% 

+18% 

EPS 0.78 0.67 +16% 2.60 2.24 +16%

Cash Flow Q4 / Full Year 2006 

* Cash Flow from investing activities except acquisitions 


Q4 

2006 

Q4 

2005 

Operating Cash Flow 23.4 7.5 

FY 

2006 

FY 

2005 

Δ 

% 

55.7 +10% 

./. CapEx* -1.6 -3.0 -5.2 -10.1 -49% 

Free Cash Flow 21.8 4.5 56.2 45.6 +23% 

as % of revenue 16.2% 5.3% 11. 6% 10.4% 

Free Cash Flow 

per share (in €) 

Average number 

of shares (in mn.) 

61.4 

0.78 0.16 2.00 

1.66 +20% 

28.1 28. 0 28. 1 

27.5 +2% 

(in mn. euros)

Balance Sheet 

Dec. 31, 

2006 

184.8 

182.5 

11.2 

22.0 

4.7 

238.7 

643.9 


Assets Liabilities 

Cash and cash 

equivalents 

Trade receivables 

Inventories and 

other assets 

Deferred Taxes 

Prepaid expenses 

Fixed assets 

(Goodwill 188/188) 

Total 

Dec. 31, 

2005 

161.6 

150.3 

5.1 

35.1 

4.5 

242.7 

Dec. 31, 

2006 

105.7 

33.5 

18.2 

64.3 

422.2 

Current liabilities 

Non-current liabilities 

Deferred taxes 

Deferred income 

Shareholders’ Equity 

(Ratio 66%/66%) 

Dec. 31, 

2005 

599.3 643.9 Total 

599.3 


94.3 

33.5 

15.5 

63.0 

393.0


Stock Information

Shareholder Information 

Actual amount of shares outstanding: 28,439,782 

- Software AG Foundation: 29.25% 

- Free Float: 70.75% 

ISIN: E0003304002 

WKN: 330400 

Symbol: SOW 


Shareholders‘ Structure by Countries 

Percentage of Free Float, as of February 2007* 

Institutional Investors 

Germany 

United Kingdom 

Rest of Europe 

North America 

Private investors and 

undisclosed institutional 

investors 

* Source: Thomson Financial 

30% 

12% 

15% 

3% 

40%

Analyst Expectations Coverage 


2007e 

2008e 


Revenue 

License 

Revenue 

EBIT 

Margin 

EPS 

in EUR 

Min 514.00 196.00 23.5 2.73 

Max 540.00 207.70 25.5 3.25 

Average 532.03 202.26 24.3 3.01 

∆ yoy + 10.15% 

Min 542.00 238.50 23.8 2.87 

Max 636.90 258.00 28.9 4.31 

Average 601.66 246.90 25.6 3.62 

∆ yoy +13.09% 

Source: Software AG, current sell side analysts as of March 2007, 

up to 24 international brokers, 

yoy calculations based on 2007e vs. 2006 and 2008e based on average 2007e 

24 Banks / Broker cover 

Software AG’s stock: 

Arete 

Berenberg Bank 

BNP Paribas 

Chevreux 

Citigroup 

DDL 

Deutsche Bank 

DrKW 

DZ Bank 

Helaba Trust 

HSBC 

HVB/Unicredit 

JP Morgan 

Kepler Equities 

LB BW 

Merck Finck 

Merrill Lynch 

Metzler 

MM Warburg 

Sal. Oppenheim 

Societe Generale 

UBS 

West LB 

MainFirst

Financial Calendar 

2007 

October 26 Q3 2007 financial figures (IFRS, unaudited) 

July 24 Q2/H1 2007 financial figures (IFRS, unaudited) 

June 21 German Corporate Conference, Deutsche Bank (Frankfurt am 

Main, Germany) 

June 12 Mid Cap Conference, Cheuvreux (London, UK) 

June 11/12 Mid Cap Forum, Sal. Oppenheim (New York, USA) 

June 5 TMT Conference, Merrill Lynch (London, UK) 

May 14 Small & Mid Cap Conference, UBS (Frankfurt am Main, 

Germany) 

May 11 Annual General Shareholders' Meeting (Frankfurt, Germany) 

April 24 Q1 2007 financial figures (IFRS, unaudited) 

For further details concerning Investor Relations Events please visit our homepage: www.softwareag.com/investor 



Products and Market Details

37 Years Heritage of Technology Leadership 

First 

Mainframe 

Database 

developed by 

Peter Schnell 

1969 

Company 

founded 

1979 

First 

Mainframe 

4GL 


First Platform 

Independent 

Language 

1992 

First Service 

Broker for 

Distributed 

Applications 

IPO — 

Frankfurt Stock 

Exchange 

Introduced 

First XML 

Server 

2001 

First Database to utilize 

IBM’s 64- bit Virtual 

Storage Architecture 

“Global Market Leader 

for XML Servers” (IDC) 

SOA 

Integration Packages: 

Legacy Integrator 

Service Integrator 

Information Integrator 

Launched: 

1971 1985 1999 2003 2005 

2004 

Launched Industry 

Integration 

Solutions: 

ISF 

iServices 

Application Composer 

Business Process 

Manager 

powered by 

2006 

Launch of

Software AG – Statement of Direction 


Continues as the best transactional database 

Continues as the most efficient development 

platform for business applications 

Achieve global market leadership 

in Legacy Modernization 

Achieve global market leadership in Service-Oriented 

Architecture (SOA) with an IT Software Alliance

Service-Oriented Development of Business Applications 

¬ Enterprise-wide 

interoperability 

¬ High productivity for a 

low TCO 

¬ Any data type, any data 

volume, any platform 


SOA and 

Web Services 

Event-Driven 

Distribution 

Systems 

Management 

Cross-Platform 

Support 

SQL 

 

Adabas 

Gateways 

Event 

Replicator 

for Adabas 

Adabas 

Manager 

Mainframe, 

Linux, Unix, 

Windows

Service-Oriented Development of Business Applications 

¬ One tool for any type of 

application 

¬ High productivity to meet 

business goals quickly 

¬ Agility to support and extend 

existing environments 


Rich Internet 

Applications 

Developer 

Productivity 

SOA and 

Web Services 

Cross-Platform 

Support 

Application 

Designer 

Natural for 

Eclipse 

Natural 

Business 

Services 

Mainframe, 

Linux, Unix, 

Windows

Legacy Market – User Situation 

Today 70% or more of an organization’s information is estimated to reside in legacy 

systems. This raises a number of challenges in supporting their future business goals, 

due to: 

¬ Lack of interoperability, which leads to inefficiencies, higher costs and poor 

responsiveness 

¬ Cumbersome and dated user-interfaces, which result in end-user inefficiency 

¬ Lack of real-time access to operational data, which negatively impacts business 

decisions 

¬ Resource intensive maintenance, which prevents focus on strategic business 

initiatives 

¬ Siloed and closed legacy systems, which limit growth potential of the business 

¬ Business rules are hardcoded 

¬ Complex “spaghetti” code, poor documentation, and diminishing skills, which 

prevent reuse of valuable data and applications putting business continuity at risk 

Legacy systems continue to provide tremendous value through their 

reliability and high-performance for running mission-critical data and 

applications 


Legacy Integration and Modernization 

for SOA Enablement 


Extending, refactoring and integrating legacy applications 

with an SOA increases the return on IT assets. 


 

 

 

Extending 

Engineer 

Refactoring 

Communicator 

Integrating

Crossvision 

CentraSite TM 


Crossvision 

Application Composer 

Crossvision 

Business Process 

Manager 

Crossvision 

Information Integrator 

Crossvision 

Service Orchestrator 

Crossvision 

Legacy Integrator 

Manage and govern your SOA environment for maximum 

openness and transparency. 

Rapidly create new business applications from existing 

systems. 

Coordinate the flow of business processes across your 

organization. 

Combine data from different systems into a single userfriendly 

view. 

Create new business services from existing 

functionality. 

Integrate existing assets and create new functionality.

Leadership in the SOA Segment - Enterprise Service Bus 

and SOA Repository and Governance 

Application Integration and Middleware Market 

compound annual growth rate (CAGR) from 2005 to 2010 

World Market (CAGR) 

Asia / Pacific 

49.7% 

Middle East and Africa 43.6% 

Central and Eastern Europe 42.4% 

Latin America 

41.8% 

U.S. 

38.3% 

Canada 

37.6% 

Western Europe 37.1% 

Japan 

34.0% 

Market potential 585.5 Mio USD in 2010 

Software AG‘s Enterprise Service Bus (Crossvision 

Service Orchestrator) is currently ranked as #4 

based on market share* 


38.5% 

*Source: Gartner Dataquest (May 2006) – 

Application Integration and Middleware and Portal Market Share 

Strong 

Current 

offering 

Weak 

Software AG is No 1 

in product strategy 

Weak Strategy 

Strong 

Source: The Forrester Wave TM: Enterprise Service Bus, Q2 2006 

by Ken Vollmer and Mike Gilpin.

Target Market – Crossvision 

SOA Software Spending 

75% five-year compound annual growth rate 

(CAGR) from 2004 to 2009 

Reaching nearly $9 billion in 2009 

Software AG had 3% market share in 2004 

License revenue for Crossvision grew by 

76% in Q3/2006 compared to Q3/2005 

See IDC Report: Worldwide SOA-Driven Software 2005.2009 Forecast 


Software AG is No 1 

in SOA offering 

Source: The Forrester Wave TM: Integration-Centric 

Business Process Management Suites, Q4 2006 

by Ken Vollmer and Henry Peyret.

Growth Driver: Strategic Partners 

One Strategy + Three Focus Areas 

Global System Integrators 

2006: Focus on 10 global partners 

2007: Build up projects in countries 

2008: Expand local partners 

… 


Tier 1 Technology Partners 

Global relationships supporting 

expanded portfolio and 

customer base 

CentraSite Community 

Establish CentraSite as an 

industry standard and show 

SOA technology leadership

CentraSite TM Community 


Universities 

User 

Productivity 

Semantic 

Technologies 

Business 

Apps 

Business 

Rules 

Governance 

BPM 

EA 

ESB 

BI 

Registries/ 

Repositories 

Legacy 

Modernization 

Infrastructure 

Identity 

Management 

Testing 

Security

Acquisitions 2005 

Sabratec, Israel 

January 2005 

Target Strategy Deal Structure 

Main product: Applinx 

Casabac, Germany 

July 2005 

Main product: Composite 

Application Integrator 

APS, Venezuela 

August 2005 

Distributor of Software AG 

in Central America 


Enhance legacy 

modernization portfolio 

(Non-invasive application 

integration) 

Enhance SOA product 

portfolio 

Enables rapid development 

of Composite and Rich 

Internet Applications (RIA) 

used in Natural and XMLi 

Direct access to customer 

base - higher revenue 

potential: selling new 

products & larger projects 

$7 million in cash 

plus earn-out 

Key R&D personnel retained 

€1.5 million in cash 

plus earn-out 

Key R&D personnel retained 

$4.6 million in cash 

plus earn-out 

Revenue 2004: $4.6 million


Please contact: 

Investor Relations 

Uhlandstraße 12, 64297 Darmstadt, Germany 

phone: +49 (0) 61 51 / 92- 1899 

fax: +49 (0) 61 51 / 92- 1933 

e-mail: investor.relations@softwareag.com

7th Annual Pan European Small & Mid Cap Conference - Software AG

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