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Software AG GB 2013. englisch

Enterprise Transaction Systems (ETS) products Our traditional ETS product line is in an advanced stage of the product life cycle, with barely any new customer busi- ness. Revenues are therefore declining in this product line. Our stabilization strategy for this business is based in part on the option to extend customers’ existing licensing rights to generate new sales revenues. This option cannot be re- peated arbitrarily after contracts have been adjusted. This accelerates the decrease in ETS license revenue. The steady trend of customers switching from mainframes to the less-expensive open systems platforms also leads to weak- ening maintenance revenues. Software AG is countering these risks with the following measures: • A global manager was put in charge of the ETS business for the first time in fiscal 2013. • Process improvements through the BPE product portfolio support ETS modernization, thereby increasing the prod- uct line’s life cycle. • New sources of revenue are being tapped by the steady expansion of the ETS product portfolio through add-on products. • To generate additional revenue, Software AG offers sup- port for customers migrating from mainframe to open-systems platforms on ETS technology. The measures taken can slow the declining trend in the ETS business, but not stop it. Software AG expects a decrease in ETS product revenue between -9 and -16 percent at con- stant currency in fiscal 2014. The Company anticipates a further drop in revenue in the following years as well. This strategic risk was rated risk category 2 and level 3 at the end of 2013. Acquisitions Through selective acquisitions, we are expanding our tech- nological product range and continuing to build up our global presence. The uncertainty of future market and technology trends means that there is a risk associated with determining We reduce this risk by implementing our functional triangle (Sales-Marketing-Research and Development) and by close contact with customers in all industries and countries. More- over, we maintain close contact with technology analysts so as to be continuously informed of new market and prod- uct developments. With newer development trends, Soft- ware AG’s products are augmented by acquisitions. For these reasons, acquisitions of JackBe Corp., USA, Relational Networks Inc., USA (LongJump), alfabet AG, the Apama divi- sion of Progress Software Corporation and of a minority interest in metaquark GmbH were made in 2013. They strengthened our Business Process Excellence (BPE) tech- nology, particularly for the new area of application Intelli- gent Business Operations (IBO). As a technological leader—a fact confirmed by independent analysts—in the BPE product area we are often operating in technological uncharted wa- ters. This carries the risk of problems arising from the im- plementation of products that are not completely techno- logically mature, which can then damage customer relationships. We manage this risk with a digital product innovation process entitled Entire Readiness of Software AG for new technology/release, which coordinates all processes across the Group for new-product launches. Furthermore, project launches are monitored through key performance indicators based on region and country. In addition, Soft- ware AG made significant investments in proactive support teams in order to further improve customer satisfaction. The product risks described here were given risk category and risk level 2 at the end of 2013. The Company’s Research and Development division uses a minimal amount of open-source code for product develop- ment. We have numerous processes which ensure that no open-source components can employed that could contam- inate Software AG products. There is a risk that in isolated cases these processes could fail and the Company would not be able to impose licensing fees for products contami- nated with open-source code rights. This open-source code risk was risk category and risk level 1 on December 31, 2013. Software AG | Annual Report 2013 102 Letter from the Management Board Software AG ShareAbout Software AG Highlights 2013

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