Annual Report 2002 - Software AG

6
Letter to our stockholders
Chronicle of
events in 2002
Dear stockholders,
Fiscal 2002 was a very difficult year for Software AG.
2001 had already been a tough year for the software
industry but Software AG bucked the trend
and grew by acquiring its long-time US distributor.
However, expectations that the market
would pick up significantly in 2002 were not fulfilled.
As a result of the harsh economic climate
and uncertain mid-term business outlook, many
Software AG customers were reluctant to invest in
IT. This not only effected revenue from upgrades,
updates and enhancements to our enterprise transaction
products, but also the number of new e-business
projects. Consequently, we experienced falling
demand from the first quarter of 2002, in particular
for software licenses.
Restructuring bears fruit
In response to this trend, we initiated a comprehensive
restructuring program in March 2002. The
aim was to gradually align our costs with our lower
sales revenue. This enabled us to slow the decline
in earnings to some extent, and post a profit in fiscal
2002.
Feb. 27 Tamino 3.1 wins 2001
InfoWorld Technology of the Year
Award in the XML category.
While reining in costs, we pushed ahead with our
strategic focus on XML technology. Version 4.1 of
Tamino XML Server is a comprehensive solution for
generating and managing XML documents. We also
added EntireX XML Mediator to the EntireX integration
platform.
Another key aspect of our strategy is continued
investment in research and development with a view
to ensuring that our enterprise transaction products
remain highly competitive for years to come. Above
all, we are committed to guaranteeing that our
Adabas and Natural software systems remain compatible
with emerging industry standards. We also
offer solutions that make it possible to flexibly and
cost-effectively adapt these systems to new requirements,
such as Web-based access. This approach
protects our customers’ investment, because they
can continue to use Software AG products in conjunction
with the emerging technology.
Our e-business offering goes one step further.
We are currently developing solutions, including content
management and Web services, for selected
industries (banking and insurance, pharmaceuticals,
healthcare, the public sector, and media and technology).
This work is being undertaken partly in collaboration
with our partners.
Feb. 28 Software AG extends the functionality of its EntireX integration
platform by establishing a technology partnership with Savvion, Inc.,
Santa Clara, California, a leading vendor of business process management
software.