Software AG

Software AG is the second largest manufacturer software in, Germany fourth To Europe in and, as of April 2019, among the 25 largest companies in this area in the world. The company works in the field of improvement (business processes Business Process Exellence). Fifty years of the company's history are marked by the creation of the first highly efficient, DBMS Adabas first platform for analysis, as well business processes ARIS as the first B2B-servers and integration platform based on. SOA webMethods

The company offers an end-to-end BPM solution for end-to-end business process management that is easy to use and has a low total cost of ownership (TCO). The portfolio of the company's leading brands - ARIS, webMethods, Adabas, Natural, CentralSite and IDS Scheer Consulting - provides opportunities for strategic planning, design, integration and controlling of business processes; SOA-based data integration and management Process-oriented implementation of SAP solutions and strategic process consulting services.

Headquartered in Germany, Software AG shares are traded on the Frankfurt Stock Exchange (TecDAX, ISINDE 0003304002/SOW).

Business in Russia

Main article: Software AG - IDS Scheer Russia

Russia The business of Software AG began in Soviet times with deliveries to the country in the DBMS Adabas late 80s. About 85% of the Soviet database market was occupied by database management systems Adabas.

After the collapse of the USSR, the company lost its position in the Russian market. Active activity resumed after the takeover of IDS Scheer, successfully represented on the Russian market.

As of April 2019, applications running on Adabas DBMS are used in government agencies of the Russian Federation, oil and gas and other corporations. The list of Software AG customers includes medium and large corporations of various sectors of the economy.

Performance indicators

2018: Revenue decline of 2% to €865.7 million

In 2018, Software AG recorded revenues of 865.7 million euros, which is 2% less than the previous year.

Sales of software licenses during this time increased by 2%, reaching 249.4 million euros. The company earned 415.4 million euros from support services, which is 3% more than a year ago. Sales of software as a service (SaaS) jumped 97% in 2018 compared to 2017 - to 17.6 million euros. The service business accounted for 182.5 million euros of income, which 8% falls short of revenue in 2017.

The DBP (Digital Business Platform) division, taking into account the sales of cloud and IoT solutions, received annual revenue of 464.7 million euros, which is 2% more than in 2017.

Adabas  & Natural sales revenue decreased by the same 2% to 218.3 million euros. Software AG's consulting business shrank from €198.8 million in 2017 to €182.6 million a year later. At the same time, the company noted a good profitability for this segment - 10.5%.

Net profit of Software AG in 2018 amounted to 165.2 million euros, rising by 17% compared to the value of a year ago.

Speaking to reporters after the release of the financial results , Software AG CEO |Sanjay Brahmawar announced the company's plans to spend €1 billion to €1.5 billion on asset acquisitions to drive business growth in areas such as data integration and industrial Internet of Things.

According to Brahmavar, Software AG is also implementing a new business strategy, for which it allocates 20-30 million euros so that customers can benefit as much as possible from the digitalization of their processes. Software AG is rebuilding its bundling software division to focus on applications that integrate data from all kinds of sources.^[1]

History

2023: Silver Lake buys Software AG for €2.37 billion

On May 4, 2023, German business software developer Software AG agreed to accept an updated takeover offer from investment firm Silver Lake. The transaction amount is €2.37 billion.

The contract for the sale of Software AG was originally concluded on April 21, 2023. Then it was reported that the shareholders of the company will receive €30 euros for each security they own. This corresponded to a premium of approximately 53% to the level of quotations as of April 20, 2023. The total amount of the transaction was supposed to be approximately €2.2 billion.

However, Software AG received several more offers to buy. In particular, as the agency reported, Bloomberg the desire to absorb the German developer ON was expressed by an American private investment company, Bain Capital which prepared an offer at the rate of €34 per share.

As a result, Silver Lake decided to raise rates: its new proposal provides for the payment of €32 for each security of Software AG, which is a premium of 63.3% to the share price as of April 20, 2023. As a result, the total amount of the agreement increased to €2.37 billion.

In a statement, Software AG noted that Bain Capital's non-binding offer was related to specific conditions that were "unattainable." Given this circumstance, as well as an increase in the amount of the offer from Silver Lake, Software AG does not intend to enter into negotiations with an "American competitor." At the same time, the investment company Silver Lake previously reported to regulators that it had acquired an additional 5% stake in Software AG, as a result of which its total stake in the German company exceeded 30%. Nothing is said about the proposed timing of the merger.^[2]

2021: StreamSets purchase for €524m

StreamSets is the developer of software DataOps tools used to manage data pipelines and data integration tasks, including data collection, consolidation, and movement in hybrid environments. On March 1, 2022, Software AG announced that it had entered into an agreement to acquire data integration provider for analytics StreamSets for €524 million. The acquisition will be funded by cash and Software AG's existing credit facilities and is due to close, after regulatory approval, in the first half of 2022. Read more here.

2020: Ransomware Virus Attack

On October 10, 2020, it became known that the German technology company Software AG was subjected to a large-scale ransomware virus attack. Hackers demanded a ransom of $23 million after stealing employee data, as well as company documents.

The attackers published screenshots of the company's data on a website available on the dark web. Screenshots show scans of passports and employee IDs, staff emails, financial documents and files from the company's internal network. The criminals decided to publish some of the data after Software AG refused to pay the ransom. This is confirmed by the results of a study by cybersecurity specialists who have access to the company's correspondence with hackers.

Software AG said the ransomware attack only affected its internal network, while customer cloud services were unaffected.

Software AG's IT infrastructure was attacked by malware on the evening of October 3, 2020. Despite the fact that services for the company's customers, including cloud ones, remained available, Software AG was forced to disable internal systems in accordance with the company's internal security rules, the company said in a statement.

The ransomware code used against Software AG was discovered in early October 2020 by cybersecurity experts MalwareHunterTeam. It is assumed that Software AG was attacked using a ransomware virus created by the hacker group Clop.^[3]

2019

Joining the Open Industry 4.0 Alliance

Software AG on September 17, 2019 announced that it will become a member of the Open Industry 4.0 alliance to promote the unification of industrial and information technology.

The task of the alliance, as you know, is to create an open ecosystem and an environment for the interaction of vendors. Thanks to him, vendors of information (IT) and industrial (OT) technologies entered into an open dialogue and began joint work aimed at providing customers with real business benefits. Software AG intends to participate in the segments of connection to IoT (IoT Connectivity), peripheral computing (Open Edge Computing), as well as as a hybrid integration operator.

The alliance agreed on an open and pragmatic approach to ensuring interoperability for industrial automation systems ("Industry 4.0"). The basis of this approach is to focus on the benefits for customers. Interoperability between information (IT) and industrial (OT) technologies requires interoperability of vendors and interoperability. Only in this way will production and processing plants be able to benefit from the Fourth Industrial Revolution. The open standards approach is combined with our philosophy of technological freedom as a Service, "said Bernd Gross, CTO of Software AG.

Dr. Stefan Zigg, Chief Product Officer, added: Interoperability and integration of distributed environments are essential to the formation of an open "Industry 4.0" environment. We hope to bring our experience in these areas to the projects and agenda of the alliance.

Collaboration with Deutsche Telekom in IoT

July 23, 2019 Software AG announced the signing of an agreement Deutsche Telekom with for the provision of services in the field Internet of things (English Internet of things, or) at the IoT global level. Deutsche Telekom and its T-Systems corporate customer division will improve their solution with Cloud of Things a platform Cumulocity IoT developed by Software AG specialists. More. here

Helix - Corporate Strategy for Sales Growth

On January 31, 2019, Software AG first talked about Helix, a corporate strategy for sales growth. Its goal is to make the company a leading software provider through digital transformation in five years. Work on the Helix concept started in 2018 under CEO Sanjay Brahmavar.

For the success of the campaign, Software AG identified three areas of the Digital Business Platform: "Integration and API," "IoT and Analytics," "Business Transformation," which are based on the ARIS and Alfabet divisions. The main attention of Software AG is directed to North America, Germany, Great Britain, France, as well as the Asia-Pacific region. To accelerate development, the company invests in R&D for APIs, iPaaS and IoT products.

Personnel changes in management

Software AG on January 15, 2019 announced key personnel changes in management. In particular, the company has made appointments to the positions of technical director and marketing director.

On January 8, 2019, Bernd Gross, who has extensive experience in introducing business innovations in integration, analytics and IoT technologies in large industries, took over as CTO of Software AG. In this capacity, he replaced Dr. Wolfram Jost, who led the development of digital transformation technologies and decided to leave the company.

In turn, on January 14, 2019 Paz MacDonald , (Paz Macdonald) joined the company as Director of Marketing, having more than 20 years of experience in the field of technology management. Previously, she served as vice president of marketing for a fast-growing hybrid vendor cloudy databases MongoDB in the regions EMEA and APAC.

In addition, a member of the company's board, Dr. Stefan Sigg, additionally took over the functions of chief product officer. Now its activities cover all aspects related to Software AG solutions: management, development and support.

2018

Partnership with Bilfinger SE to develop an IoT solution for the processing industry

In June 2018, Software AG became a partner of international industry service provider Bilfinger SE. The efforts of the companies created the Bilfinger Digital Next center. The main goal is to integrate Bilfinger's Connected Asset Performance (BCAP) solution with Software AG's Cumulocity IoT platform.

By digitalization, companies plan to reduce the cost of manufacturing and supporting equipment. According to representatives of the parties, Cumulocity in BCAP analyzes the effectiveness of customer products and reduces the time to create them.

Bilfinger Digital Next takes a creative approach to lowering the entry threshold for. internet of things This makes it possible to reduce initial investments and simplify implementation in large chemical, pharmaceutical and oil and gas companies, as well as in medium-sized businesses. Bilfinger Digital Next will provide coverage of all relevant aspects of digitalization, minimize risks and reduce payback periods for customers, Karl-Heinz Streibich "said Karl-Heinz Streibich, CEO of Software AG.

Purchase of TrendMiner NV

In June 2018, Software AG announced the purchase of TrendMiner NV - a developer of data collection, diagnostics and predictive analytics software in the processing industry. Thanks to products built on machine learning technology, Software AG customers were able to identify violations of production processes and make adjustments without the help of IT specialists. TrendMiner's customers include Total, BASF, Evonik, Covestro and Pfizer.

Together with TrendMiner, we will be able to offer a platform for streaming and visual analysts time series, - commented on the event (Karl-Heinz Streibich Karl-Heinz Streibich), CEO of Software AG.

Sanjay Brahmawar Appointed Head of Company

On February 6, 2018, by the decision of the Supervisory Board of Software AG, Sanjay Brahmavar was appointed executive director of the company for a period of 5 years, starting from August 1, 2018. In this post, he will replace Karl-Heinz Streibich, who led Software AG for more than 14 years. Streibich will leave the post of CEO of Software AG in connection with reaching the maximum age for this position. Read more here.

2017

Weak income growth

In 2017, Software AG's revenue reached €879 million, up about 1% from a year earlier. Excluding currency fluctuations, sales rose by 2%.

Net profit of Software AG changed slightly: in 2017 it increased to 140.6 million euros against 140.4 million euros in 2016.

Most of Software AG's revenues are still generated by support services, sales of which exceeded 421.6 million euros in 2017, an increase of 2%. The same growth was shown by the service business, the volume of which amounted to almost 200 million euros. The sale of licenses software for brought the vendor 256.8 million euros in revenue, which is 2% less than a year ago.

On the Digital Business Platform, Software AG earned about 455.4 million euros for the year - 5% more than in 2016. The digital division brings the company more than half of the turnover.

Product sales  revenue Adabas & Natural reached €233.7 million against €235.6 million a year earlier. The consulting business showed a 2 percent increase to 200 million euros.

Software CEO  AGKarl-Heinz Streibich, who will step down after an employment contract expires at the end of July 2018, said the company has focused on the industrial Internet of Things, where it has become an "undisputed leader."

In early 2018, Software AG spun off its IoT and cloud computing business into a separate company that it fully controls. The annual revenue of the new structure is estimated at 25-30 million euros.

After Software AG released its financial results, the company's shares fell 7%. This was due to the fact that the vendor warned about the weak profitability of the business.^[4]

Participation in the creation of ADAMOS JV for the development of IIoT and Industry 4.0

On September 13, 2017, DMG MORI, Dürr, Software AG, ZEISS and ASM PT announced the conclusion of a strategic partnership agreement in the Industry 4.0 and Industrial Internet of Things (IIoT) segments and the creation of the ADAMOS joint venture ( Adaptive Manufacturing Open Solutions). The Alliance of Engineering Enterprises and IT Companies aims to develop Industry 4.0 and IIoT. Read more here.

Establishment of a scientific advisory board

On August 16, 2017, Software AG announced the establishment of a scientific advisory board.

The council will be a catalyst for external ideas and will help Software AG identify promising trends in the IT field. Software AG customers will benefit from this initiative as much as possible. Scientific research will contribute to the formation of the Software AG strategy and the development of the company's products. The scientific advisory board includes representatives of research communities. The Board is not a corporate governing body, but has an advisory function.

The Scientific Advisory Board was first convened on July 17, 2017 and will be held four times a year. His task is to support research activities with a special emphasis on artificial intelligence technologies, blockchain, security, the Internet of Things, on IT architecture and cloud environments, as well as on the development and assessment of software quality. At least once a year, the council will assess and identify key areas of its work.

The Scientific Advisory Board is formed from six to eight independent experts for a period of at least three years. To date, the council includes the following representatives of the scientific community:

• Professor Dr. Wolfgang Wallster, Chairman (German Center for Artificial Intelligence Research - Deutsches Forschungszentrum für Künstliche Intelligenz GmbH)
• Prof. Dr. Michael Weidner (Fraunhofer Institute for the Study of IT Security and Technical University of Darmstadt)
• Prof. Dr. Friedeman Mattern (Swiss Federal Institute of Technology in Zurich)
• Prof. Dr. Reinhard Schütte (University of Duisburg-Essen)
• Prof. Dr Peter Liggesmeyer (Kaiserslautern Technical University and Fraunhofer Institute for Experimental Software Development)
• Prof. Dr. Jens Dietrich (University of Saar)

By Software AG:

• Karl-Heinz Streibich (CEO, Software AG)
• Dr. Wolfram Jost (CTO, Software AG)
• Doctor Stefan Zigg (Head of Research, Software AG)
• Dr. Harald Schoening (Vice President, Research, Software AG)

"In recent years, the demand for technology in all industries has reached significant heights. The Scientific Advisory Board will be the catalyst for finding trends in technologies and their applications. The experience of scientists and the research approach will help us gain a scientific basis in the development of our products. Ultimately, our customers will get the most out of it. " Karl-Heinz Streibich, CEO of Software AG

Dividend increase from €0.55 to €0.60 per share

At the annual general meeting on May 17, 2017, the board of directors and supervisory board of Software AG (Frankfurt Stock Exchange (FRA): SOW) will propose to consider another increase in dividends: up to 0.60 euros per share for 2016 (last year: 0.55 euros).

In previous years, the amount of dividends has already increased several times, and based on the results of operations in fiscal 2016, the board of directors and the supervisory board of the company also decided to increase the amount of dividends. A record dividend of €0.60 per share (last year: €0.55) will be offered at the annual general meeting on May 17, 2017 in Darmstadt, Germany.

The increase in dividends reflects an increase in free cash flow in the past fiscal year. It is this indicator that is key for calculating dividends at Software AG. Including the share price at the end of 2016 (after the closing of the exchange session on the New York Mercantile Exchange on December 30, 2016: €34.49), the proposed dividend amount means a profit per share of 1.7%.

Currently, dividends are accrued on 76.1 million shares (last year: 76.2 million), and if the proposal is approved, the total amount of payments will increase significantly (45.6 million euros compared to 41.9 million euros last year).

In addition to increasing dividends, Software AG shareholders will benefit from the current share repurchase program, for the implementation of which the company allocates up to 100 million euros. On March 13, 2017, the company began repurchasing shares on the stock exchange, this process will end no later than May 15, 2017. More information about the current share repurchase program can be found on the corporate website of Software AG in the Investor Relations section ("Investors").

As a result of the successful development of the company, Software AG shareholders receive benefits in the form of a proposed dividend payment and an ongoing share repurchase program. In total, more than three-quarters of the free cash flow, and in the 2016 financial year it reached 187 million euros, will be returned to shareholders. This further reaffirms Software AG management's clear commitment to policies aimed at maximizing shareholder benefit.

2016

Zero revenue growth

In January 2017, Software AG published its financial statement for the previous year. The company's revenue growth was almost zero, despite the increase in sales of profitable support services.

Software AG completed 2016 with revenues of €871.8 million against €873.1 million a year earlier. Excluding currency fluctuations, the company's sales climbed 1%. Net profit rose 1% to €140.4 million.

In the revenue structure, revenues in the support services segment reached 412.2 million euros in 2016, an increase of 1% on an annualized basis. Sales of software licenses decreased by 3% and amounted to 263 million euros. Consulting and other sources of income brought the vendor 195.9 million euros in revenue for 2016, which is 1% more than a year ago.

Software AG's revenue from the Digital Business Platform reached 441.4 million euros, which is 3% more than a year earlier (in constant currency). The digital division brings the group more than half the turnover.

The Adabas & Natural product line provided Software AG with annual revenues of 234.6 million euros, while in 2015 the figure was measured at 248 million euros.

In comments on the financial report, Software AG CEO Karl-Heinz Streibich noted that in the fourth quarter of 2016, the company received record revenue and entered into new strategic partnership agreements.

Entering 2017, we have positioned ourselves in a better position than ever to capitalize on the growing demand for digital transformation in all markets, including the IoT market with huge growth potential. There, many industrial corporations are increasingly interacting with software companies, "Streibich said.[5]

Acquisition of Zementis Inc

On December 2, 2016, Software AG announced the acquisition Zementis of Inc. headquartered in San Diego, California. Zementis Inc. provides software for deep learning (Deep Learning) - a key factor for machine training intellectual and processing, data as well as fundamental technology enabling development (AI artificial intelligence).

2013

Revenue cut to €972.7 million

In 2013, Software AG earned €972.7 million, which is about 7% lower than in 2012. Only license sales showed growth in the reporting period - from €318.9 to €330.1 million, while revenue from solution support and other services decreased.

Purchase of Apama technology from Progress Software

Software AG bought from Progress Software a technology for processing complex events known as Apama and designed to analyze data streams, search for correlations in them and recurring patterns characteristic of financial trading and detection of fraudulent transactions, the company's press service said on June 13, 2013.

Software AG's portfolio includes the WebMethods Business Events CEP system, but understanding the fame of the Apama brand, the company plans to continue selling it under the same name. According to the conditions, John Bates, CTO of Progress Software, goes to work at Software AG.

The WebMethods Business Events system appeared at Software AG after the purchase of RTM Realtime Monitoring in 2010. Apama is more suitable for those who need a specialized event processing platform. extensive analysis of corporate information.

Software AG purchases indicate that the demand for niche CEP products is increasing and they are in demand for extensive analysis of corporate information. According to observers, WebMethods Business Events and Apama complement each other well, it is likely that Software AG will integrate them into most of the company's products.

Alphabet AG purchase

In June 2013, Software AG announced the acquisition of Alphabet AG, a corporate infrastructure and IT management company. According to the company's expectations, the combination of ARIS, the Software AG platform for modeling and analyzing business processes, and Alfabet AG products should help customers more closely "link" process transformation with IT infrastructure optimization projects .

Also in 2013, cloud platform provider LongJump and JackBe, real-time business analysis software, were acquired.

2012

Revenue cut to €1.047 billion

The group's total revenue was €1.047 billion (2011: €1.1 billion). Revenue from sales of products (licenses and technical support) grew by 5.7%, to 712.2 million euros (2011: 673.9 million euros). In 2012, Software AG adopted a number of operational and strategic measures to ensure further growth: including an increase of 40 million euros in investments in sales, as well as in research and development in the field of business process improvement (BPE). The initiatives implemented to boost growth have already borne the first fruits during this year. The company's largest division increased its license sales by 15.5%. The highly profitable division of Corporate Transaction Processing Systems (ETS) developed more successfully than predicted at the beginning of 2012. The group's profit before interest and taxes amounted to 248.3 million euros (2011: 269.2 million euros), due to targeted investments and a decrease in income of IDS Scheer Consulting (IDSC). Profit margin before interest and tax grew steadily throughout the year from 21.5% to 27.2%, driven by ETS unit results that were better than expected, the BPE unit's continuously growing revenue from license sales and efficient cost management. Software AG plans to increase its targeted investment in BPE's fast-growing division, thus laying the foundation for further dynamic growth.

In the 2012 financial year, Software AG was able to increase the group's revenue from product sales by 5.7%, to 712.2 million euros (2011: 673.9 million euros). This is about 68% of the group's total income, which amounted to 1.05 billion euros (2011: 1.1 billion euros). The distribution of revenues has thus shifted in favor of growing, high-margin destinations and customer service.

The BPE division contributed the most to the growth in product sales revenue, with the division's revenue increasing by 13.9%, reaching €384.7 million (2011: €337.8 million). The increase in revenue from the sale of licenses was 15.5%. This dynamics was due to sales of Terracotta products for managing Big Data. In 2012, sales of these products more than quadrupled, totalling €16.5 million (2011: €3.6 million). About 54% of total product sales revenue came from integration and process management software, as well as innovative in-memory solutions for Big Data. Thus, the main income of Software AG was received by BPE, which is a visible confirmation of the correctly chosen vector of the company's development. Software AG has embarked on long-term, dynamic growth thanks to an additional €40 million investment in sales and marketing as well as R&D.

In 2012, the performance of ETS's profitable division exceeded expectations. The company's traditional business in the field of database technology shows stable results from year to year: in 2012, the division's revenue from product sales amounted to 309.6 million euros (2011: 312.9 million euros). In total, in the 2012 financial year, the ETS direction brought the company 375.3 million euros (2011: 381.3 million euros), which is only 1.6% less than the previous year.

In 2012, the reorganization of the IDS Scheer Consulting division continued. The main tasks were to exit non-profitable markets and focus on the process aspects of consulting on SAP applications, especially in German-speaking countries. These measures led to a decrease in income to 125.1 million euros (2011: 189.2 million euros). The sale of SAP services in North America, which followed in January 2013, was an important measure in reorienting the business of IDS Scheer Consulting.

Due to the cost of expanding sales to reach high-growth markets, the increase in investment in research and development, as well as the cost of consolidating SAP's consulting business, profit before interest and taxes decreased by about 8% compared to the previous year, to 248.3 million euros (2011: 269.2 million euros). At the same time, profit margin before interest and taxes during the year showed steady growth due to the stable performance of the ETS division and steady revenue growth of the BPE division (Q1 2012: 21.5%; Q2 2012: 22.1%; Q3 2012: 23.7%; Q4 2012: 27.2%). In terms of full fiscal year results, profit margin before interest and tax was 23.7% (2011: 24.5%) and thus in the upper half of the forecast range. Net profit after taxes was €164.7 million (2011: €177.2 million). Taking into account the total value of the assets of Software AG 1.8 billion euros as of December 31, 2012, the ratio of equity to the total assets of the company amounted to about 60%. As of December 31, 2012, Software AG announced positive net liquidity with a surplus (the difference between cash and financial liabilities) of 49.6 million euros.

2013 Forecast

In fiscal year 2013, BPE's product sales revenue is expected to grow by 16-22% (at constant exchange rates) and ETS's revenue from the company's traditional database technology business will decrease by 4-9% (at constant exchange rates). Given the projected growth in the BPE segment by an average of 10%, Software AG plans to increase its share of this market and therefore will continue to invest in sales and marketing in the current financial year.

Thanks to additional investments in the development of the BPE direction, the share of this division in the total income of the company in 2018 will be about 80%. BPE's product sales revenue is expected to reach €1bn by this time. Timely entry into the promising market for integration and process management software, as well as the market for Big Data solutions, is of strategic importance for the Software AG business and is the basis of the company's long-term success.

Q3: Profit €61m

In the third quarter of 2012, the company's revenue from sales of new products in the Business Process Improvement (BPE) division exceeded the market forecast. According to data published by Software AG, the revenue of the BPE division (licenses and services) grew by about 15% to 96.7 million euros (third quarter of 2011: 84.2 million euros).

BPE's revenues from license sales grew by approximately 20% to EUR 50.0 million (third quarter of 2011: EUR 41.7 million). The highly profitable business of enterprise transaction processing systems (ETS) - the company's traditional business in the field of database technology - has shown stable results. Its income in the third quarter of 2012 remained approximately at the level of the previous year, amounting to 93.8 million euros (third quarter of 2011: 95.1 million euros). Due to the reorganization of the consulting business of the company, its total income decreased to 257.4 million euros (third quarter of 2011: 274.6 million euros).

The increase in targeted investments in new products and markets had an impact on operating income (profit before tax and interest in accordance with International Financial Reporting Standards). Operating profit amounted to EUR 61.1 million, which decreased compared to the previous year (third quarter 2011: EUR 72.0 million), the results of which were positively influenced by cash receipts from one-time transactions, but increased relative to the successful second quarter (second quarter 2012: EUR 57.1 million). Profit margin before tax and interest amounted to 23.7% (third quarter 2011: 26.2%), reflecting the growth trend throughout the year (first quarter 2012: 21.5%; second quarter of 2012: 22.1%).

As of September 30, 2012, the ratio of equity to total assets was 59%, and the amount of net cash was 10.5 million euros. Taking into account the high volume of investments in sales development this year, the company predicts profit margin before taxes and interest at 23.0-24.0%.

my-Channels takeover

On April 16, 2012, it was announced that Software AG was acquiring my-Channels to gain access to universal messaging technology. Software AG plans to ensure the interoperability of my-Channels' Nirvana technology with the webMethods software suite simultaneously with the release of Nirvana 7 in the second quarter of 2012. The release of the first integrated product is scheduled for the fourth quarter of 2012, it will allow our customers to choose messaging tools as part of their implementation options for the webMethods integration platform.

"From the very beginning of our negotiations with Software AG, it became obvious that the inclusion of our company's Nirvana platform in the existing Software AG software product structure is certainly advisable," says my-Channels CEO Paul Brant. "I am absolutely convinced that this acquisition and subsequent integration of technologies will serve the interests of customers of both my-Channels and Software AG. Combining the development portfolios of the two companies will open up many new areas for their application, which are of considerable interest to our customers. "

In 2012, Software AG acquired two companies - the English my-Channels with Nirvana messaging technology and the German metaquark, specializing in mobile solutions.

2011

Turnover €1.1 billion

The turnover of Software AG in 2011 amounted to €1.1 billion (IFRS). More than 5,500 employees support 10,000 corporate and government clients in 70 countries.

In fiscal 2011, Software AG hoped to maintain a high interest in its products. Accordingly, BPE revenue is expected to grow by 10-15%. The full integration of ARIS and webMethods, which was presented at CeBIT 2011, was supposed to ensure unprecedented efficiency in the development and implementation of process solutions. This innovation is able to support the growth vector of sales during the year, the company noted. Traditional Business (ETS) product sales were expected at 2010 levels, while consulting firm IDS Scheer was forecast to see average growth. In general, Software AG expected a total increase in turnover by 5-7% at constant exchange rates. By optimizing the use of consultants, reducing costs and realizing sales synergies through the merger with IDS Scheer AG, Software AG expected a noticeable increase in net profit (10-15%) compared to 2010.

Terracotta Acquisition

In May 2011, Software AG acquired a company in the field of built-in memory technologies for high-performance applications cloud services Terracotta and Inc. and the platform of the cross-platform ON Metismo Ltd. More. here

Espionage charge 'implicated in sex, lies and audiotapes'

Software AG has been accused of creating an industrial espionage scheme "implicated in sex, lies and audio recordings." The lawsuit, filed by radio frequency identification technology provider GlobeRanger, alleges Software AG developed an elaborate industrial espionage scheme "implicated in sex, lies and audio recordings."

2010: Record revenue €1.12 billion

The turnover of the Software AG group in fiscal 2010 amounted to a record €1.12 billion (€847.4 million in 2009), i.e. the goal set in 2007 was achieved a year ahead of schedule. Revenue growth of 32% (26% at constant exchange rates) was affected by the low euro rate; in general, exchange rate fluctuations ensured an increase in revenues by €51 million. License sales rose 21% from €269.9 to €327.4 million. Revenue from version updates ON increased by 19% (€369.4 million compared to €310.6 million in 2009).

The BPE direction showed a 34% increase in turnover (€499.2 million compared to €372.3 million in fiscal year 2009). The revenue of the corporate transaction processing systems (ETS) division, which amounted to €420.0 million, was 6% higher than in the same quarter of the previous year (€396.0 million). This is a new growth area: BPE became the main source of revenue for Software AG for the first time. Further growth of the company will depend on the success of BPE products in the market. BPE products have become the leading technology in the fast-growing segment of process software. The industry experience we have gained through our merger with IDS Scheer AG will play a leading role in further market acquisition.

SAP Consulting, part of the IDS Scheer consulting structure, brought in €200.3 million for the year (18% of all sales in the last financial year). Due to the significant growth of the company due to the merger with IDS Scheer AG, profit indicators reached new record levels: EBIT growth was 23% (€268.6 million compared to 218.2 million in 2009), and an increase in net profit - 25% (€176.5 million against €140.8 million in 2009). Over the year, the free flow of funds increased to €217.8 million (188.4 million in 2009), which is 16% more than in the same period last year. The group's equity increased from €647.2 to €769.3 million, showing an ratio to the total assets at the reporting date (31.12.2010) 48% compared to 39% in 2009.

In 2010, the company divided its new history into three periods. In the first - 2003-2005 - a new strategy and product portfolio were formed, marginality improved and the team strengthened. The second segment - 2006-2008 - became a time of acquisitions and geographical expansion. Since 2009, the company is confident that Software AG has become one of the technology leaders. The developer continues the takeover policy and relies on a partner development model.

Since mid-February 2010, when an agreement on the dominance and transfer of profits was adopted between Software AG and IDS Scheer AG, according to German law, an operational merger of the two companies began. In different countries, Software AG and IDS Scheer divisions occupy different positions - in terms of number of employees, market position, specialization. Therefore, there can be no single model of operational unification. The pilot region for this process is: Russia here the merger of the two companies was carried out in January 2010 on the basis of IDS Scheer Russia and the CIS countries. The combined company was headed. Kamennova Maria

As of December 31, 2010, the group's staff was 5,644 (full-time equivalent), of which 2,051 people. were in Germany. The data for 2009 (6013 and 2149) reflect the state of affairs before the operational merger with IDS Scheer AG.

Ownership structure for 2010

Using Software AG solutions at this time improves access to and management of data, systems, applications, processes, and services.

The range of company offerings includes solutions for data processing, application development and modernization, service-oriented architecture implementation, and business process management.

Software AG's strategy for Adabas and Natural is to position ADABAS as the leading DBMS for transactional systems, and NATURAL as one of the most effective development, operation and maintenance environments for business applications.

2009

Profit Basis - Adabas and Natural

At the end of 2009, almost half of the revenue (396 million euros) fell on corporate transaction systems (Adabas and Natural products). This business, although slightly reduced compared to 2008, still remains a "cash cow" and generates stable income. Almost half of the payments customers of this direction transfer only for support. The margin here in 2009 was 62%.

Acquisition of IDS Scheer

The third major purchase was the takeover in 2009 for 480 million euros of the German IDS Scheer, one of the leaders in the global market for business process management solutions. Interestingly, back in the summer of 2008, the founder of IDS Scheer, Professor August-Wilhelm Scheer, in an interview with CNews^[6] said that he would strive to maintain the independence of the company and did not negotiate the sale of the business. "My personal goal is to maintain the independence of the company for as long as possible," Scheer said. The professor managed to hold out only a year. As a result of the transaction, the number of Software AG employees increased by 71% to 6 thousand people. The company gained access to new customers in 70 countries, including Russia. In the same 2009, two more small companies were absorbed: itCampus and Teconomic.

Stable cash flow (profit before taxes in 2009 amounted to 30%) gave the company funds for expansion. Realizing that DBMS business cannot lead to significant growth, management was looking for promising directions. Two months after buying assets in Israel, Software AG announced the acquisition for 560 million euros of a 100% stake in the American company webMethods. This time it was about investments in innovation: webMethods was the largest specialized developer of SOA (service-oriented architecture) platforms and had a strong position in the US market. The revenues of the combined company from this direction in 2009 amounted to 324 million euros.

All purchases (primarily webMethods and IDS Scheer) fit well into the process management model called Business Process Excellence, BPE. Under the umbrella of this term, solutions for the formation of the enterprise IT architecture (including according to the SOA model), systems for analyzing business processes and managing them, as well as integration products are combined.

The company is confident that the potential of this market is noticeably higher than that of ERP-class systems, and the new paradigm of informatization will become a source of revenue growth for the next decade. As an additional argument, Software AG cites Gartner's forecast that the growth in demand for infrastructure software (6.4% in 2010) will be higher than the growth in sales of corporate software products as a whole (5.1% over the same period). In 2010, customers around the world will spend $143 billion on solutions of this class out of $232 billion in total corporate software sales. According to Gartner forecasts, in 2010 the revenue growth of suppliers from SOA solutions will be 22.6%, from packages for business process management - 10.8%, etc.

It is curious that in an interview with CNews in 2008, the owner of IDS Scheer, Professor Scheer, stated that "SOA is currently overestimated" and much more significant changes should be expected from the development of the cloud computing model. Perhaps that is why he made the decision to sell his business.

One way or another, Software AG is calm about talking about the cloud era and does not see a significant threat to its business from this side.

"We need to be careful in assessing cloud computing prospects," says CNews Wolfram Jost, a member of Software AG's board of directors in charge of research and products at the company. - Complexity and entanglement of corporate IT systems is a problem that needs to be solved now, and comparable clouds in terms of functionality are only promises so far. As a service, only relatively simple applications are available today, such as CRM or HRM systems. If you need a complete ERP class solution or a supplier relationship management (SCM) system, then the use of SaaS will be a big question. In my opinion, there is no reliable evidence yet that applications in the cloud will cost customers less than individual installations. "

Software AG is confident that when evaluating cloud migration, enterprises will have to choose between potentially lower cost of ownership (TCO) and system flexibility. Not owning the application, but only renting it as a service, the client will not be able to modify it for his own needs.

"In some applications, in some cases, the SaaS model may have a future, but in some not," Jost is sure. - We are currently discussing the possibility of launching a full-fledged service for modeling business processes in the cloud based on our product to optimize ARIS business processes. We will certainly move in that direction. Whether this is a version identical in functionality to the version being installed, or not, has not yet been decided. I think through the cloud we can access more customers, including from the business environment, not just IT. We understand that the SaaS approach has some limitations and we want to incorporate them into our proposal. "

The company does not deny that, like any business, its development model still contains some risks that Software AG is trying to neutralize. In addition to the traditional dangers associated with the integration of acquired businesses, there are also specific risks. So, it is known that in its products the German developer uses open source software in a large volume. Crossing a certain edge can suddenly turn some of the company's products into free ones, according to the requirements of an open license. Software AG assures that they are closely monitoring the situation.

Judging by the dynamics of Software AG stock prices, investors believe in the strategy chosen by the company. Over the past five years, the price of securities of a German developer has added almost 150%, which is noticeably better than the indicators of its main competitors.

"One goal is obvious: we have to grow fast," says Wolfram Jost. - I do not think that we will become a company with a turnover of $100 billion, but we must double our income every 4-5 years. This is our goal, and we will strive to achieve it. "

2007

Takeover of Israeli distributor SPL Software

In 2007, Software AG acquired for 62 million euros the Israeli distributor and integrator SPL Software, which has strong ties in the financial and public sectors of Israel. It is these industries that are traditionally a priority for Software AG.

WebMethods Takeover

On May 25, 2007, Software AG acquired the American software company webMethods at a price of $546 million (420 million euros). This was the largest acquisition in the history of the company at that time and one of the largest acquisitions of an American software company by a European vendor.

2003: Karl-Heinz Streibich appointed head of the company

In the early 2000s, Software AG was still a relatively small business. In 2003, the turnover was 420 million euros, and the profit was only 7 million euros. It was this year that shareholders decided to change the managing director. Karl-Heinz Streibich was appointed the new CEO. Judging by the fact that in the spring of 2010 Streibich's contract was extended until 2015, the holders of Software AG shares believe that they were not mistaken with the choice.

1998:70% float on Frankfurt Stock Exchange

In 1998, the company held an IPO, and since then 70% of its shares have been traded on the Frankfurt Stock Exchange.

Throughout 1990, the German company remained on the periphery of the global software market. Software AG was unable to show outstanding results either in the era of personal computers or in the era of standard business applications.

1970s: Adabas system and U.S. office

• In 1974, in addition to the version for computers IBM , a version Adabas compatible with BS computers Siemens 1000/BS 2000 was released. This event was very important for the development of the company German in the market from the moment when government agencies were ordered to use only Siemens computers.

• In 1972, Adabas became a multi-file database from a single-file application. In the same year, an office was opened in the USA - Software AG of North America, located in Reston, Virginia.

• In 1971, the Adabas (adaptive database system) system was first launched. Adabas is a high-performance database system.

1969: Establishing a Company

Six young employees of the consulting company AIV (Institut für Angewandte Informationsverarbeitung) founded Software AG in the city of Darmstadt. One of the founders of Peter Schnell became CEO for many years.

Clients

More than 4,000 customers in 70 countries.

Notes