Investing in marketing and sales

We attach great importance to marketing and sales, which as our third growth driver, makes a critical contribution to the success of our Company. We have succeeded in increasing the efficiency of our marketing projects. In addition, we have expanded our internal and external communications. Since January 2007, we have been implementing a revised marketing strategy to make Software AG more innovative, to distinguish itself from the competition, and react faster to the market. This more targeted customer approach will increase our number of new customers. We will retain the loyalty of our existing customers by continuing to provide the accustomed product quality and service. We see our marketing expenses as an investment in the future, underscoring our goal of market leadership.

Partner networks increase companies’ technological expertise

Our research and development activities are supplemented by the acquisition of strategic partners. In this context, Software AG and Fujitsu Limited have jointly initiated the CentraSite Community, an initiative designed to accelerate the implementation of SOA environments. Nearly 20 companies have signed onto this initiative.

Software AG has had a wealth of experience in partner Strategys. This is another area in which we expect software companies to succeed in the international market of the future. Strategic partnerships and software alliances are key Strategys for maintaining our market position in Service-Oriented Architecture.

Innovations call for innovative employees

We currently employ more than 2,600 employees and maintain a global research and development network. In 2006, we established our own Corporate University, a state-of-the-art model to provide continuing education for our employees. More than 5,000 training days in 2006 for more than 2,000 employees corroborate the success of this concept.

Our technology is utilized by more than 3,000 customers in a variety of sectors all over the world, including industry, commerce, logistics, media, IT, finance, services, banks and public administration. We developed even more innovative solutions for our customers in 2006, some of which we would like to share with you in this annual report.

Dividend increase

Our successful business performance has enabled us to stand by our attractive dividend policy. The Executive Board and Supervisory Board will propose to the Shareholders’ Meeting that an increased dividend be distributed.

Our vision: To be the global market leader in Service-Oriented Architecture

We owe our competitive advantage to the outstanding expertise of our employees and their many years of experience in integrating systems and applications. We will continue to benefit from and increase this advantage. We expect demand for SOA components to grow.

I am firmly convinced that our integration solutions business will continue to expand and that we are on the way to becoming the global SOA market leader. We therefore believe that our expectations of another 10-percent rise in net income in 2007 are realistic. We also anticipate that our EBIT margin will continue improving toward the mid-range goal of 25 percent with a rise of approximately 1 percentage point.

Karl-Heinz Streibich
Chief Executive Officer
Software AG

page previous