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Our growth strategy consists of four consecutive
stages: Rightsizing, greater focus, development
of the organization’s portfolio and expansion. The
first two stages have been completed and we have
reached the following important milestones:
- Increase profitability through the company rightsizing.
- A clear company focus on two business lines,
representing our core competencies, as a result
of restructuring.
Customer requirements are at the heart of
everything we do
Our main goal during the first half of this year was
to strategically refocus the company on Enterprise
Transaction Systems and XML Business Integration.
In line with our Customer First program, this helped us
improve our performance in critical areas. For
example, both business lines now benefit from
highly effective, global product management. We
have intensified international marketing efforts,
leveraging successful strategies across regions. We
have raised revenues by making our sales activities
more customer-focused; and are fostering greater
innovation by establishing new research and development
centers.
Against this background, we have significantly
strengthened our market position in both business
lines: Enterprise Transaction Systems benefited
almost immediately from increased growth and
XML Business Integration is now enjoying improved
conditions for business development.
A broader, solution-driven portfolio
We also started implementing the third stage of
our strategy during the first six months:
- We optimized our product offerings and began
the definition of a fuller portfolio based on market
and customer requirements.
During the first quarter, we launched our new product
packages for the modernization of enterprise
transaction systems. The second quarter saw the
international launch of XML Business Integration
packages for systems integration with further packages
to follow. Customer response to our optimized
product portfolio has been very positive. The increased
demand that this has generated will help
both business lines to make further progress
throughout the year.
Strong position in the integration solutions
growth market
Over the coming months, we will continue to cement
our new strategy based on our core competencies.
This will entail assigning relevant R&D
activities to the XML Business Integration or Enterprise
Transaction Systems business lines. This will
enable us to better address the specific characteristics
and needs of both market segments.
The reorganization of R&D will accelerate innovation
and expertise in our two business lines. Moreover,
we will be able to recognize and respond more
rapidly to changing requirements in the fast-moving
XML market. This will clearly position Software AG
as a pioneering and leading provider of integration
solutions.
Geographical expansion offers exciting new
opportunities
During the second half of 2004, we aim to activate
additional drivers of business success.
- We will look to grow both organically and via
strategic acquisitions and partnerships.
We intend to benefit from the considerable potential
of promising growth markets through an increased
presence. And we have already taken the first steps,
for example in China, Russia, and South Africa.
Looking back at the first six months of this year, I
truly believe that Software AG is heading in the
right direction. We are well prepared to face the
challenges of 2005.
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