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Letter to Shareholders

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CeBIT participation reinforces technology leadership

Our participation in the world’s largest computer trade show, CeBIT in Hannover, Germany, was also important this year, providing us with the opportunity to enhance our image as SOA experts. We spoke with more than 450 customers as well as 70 government representatives and politicians from 50 countries, including German Chancellor Angela Merkel. Media coverage in more than 20 countries speaks for the international reach of this event. Visitors to the show were once again able to verify our products’ technology leadership. We believe more new awards and evaluation from independent market research companies also support our position as a leader: Forrester Research recognized Software AG as a ‘Leader’ in The Forrester Wave™: SOA Service Life-Cycle Management, Q1 20081), Gartner positioned Software AG in the Leader’s Quadrant for Business Process Management Suites2) and SOA Governance3)4). In a market assessment issued December 31, 2007, Current Analysis recognized Software AG as a market leader in application infrastructure. In a similar assessment issued December 14, 2007, the research firm also named Software AG a market leader in Service-Oriented architecture.

SearchSOA.com recognized the webMethods ESB v.7.1 and webMethods BPMS v.7.1 as “2007 Products of the Year” in their respective categories.

We also have an impressive list of new sales contracts to report in both the ETS and webMethods divisions. For example, we have expanded our customer list with the addition of Coca-Cola Enterprises in the USA and Woolworths in Australia.

Confirmation of forecasts for 2008

We have reaffirmed our ambitious goals for the current fiscal year: We are planning a currency-adjusted improvement of 24-27 percent in Group operating revenues for 2008. The EBIT margin should be approximately 24 percent for the year as a whole. Our improved operational measures will help us to reach these targets. These measures include growth in the area of operations, utilization of the potential presented by burgeoning markets, further strengthening of sales and distribution structures for webMethods in the EMEA and APJ regions, new technical innovations, and the expansion of our partner network, to name only a few.

Our vision is to further enhance our market position as a leading independent provider of infrastructure software and to become the world leader in the markets of the future, SOA and BPM. We consider ourselves well-equipped to reach our goal!


Karl-Heinz Streibich

Chief Executive Officer

1) The Forrester Wave™: SOA Service Life-Cycle Management, Q1 2008 (by Larry Fulton with Randy Heffner and David D’Silva (January 28, 2008))

2) Gartner, Inc., Magic Quadrant for Business Process Management Suites, 2007 by Janelle Hill, Michele Cantara, Eric Deitert and Marc Kerremans (December 14, 2007)

3) Magic Quadrant for Integrated SOA Governance Technology Sets, 2007 by L. Frank Kenney and Darryl C. Plummer (December 31, 2007)

4) The Magic Quadrant is copyrighted 2007 by Gartner, Inc. and is reused with permission. The Magic Quadrant is a graphical representation of a marketplace at and for a specific time period. It depicts Gartner’s analysis of how certain vendors measure against criteria for that marketplace, as defined by Gartner. Gartner does not endorse any vendor, product or service depicted in the Magic Quadrant, and does not advise technology users to select only those vendors placed in the “Leaders” quadrant. The Magic Quadrant is intended solely as a research tool, and is not meant to be a specific guide to action. Gartner disclaims all warranties, express or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose.