Dear Ladies and Gentlemen,
Software AG continued on its growth path in the second quarter of
2006. The increases in sales and earnings emphazise the Company’s
focus on sustained growth. Our strategy is showing a rising effect,
above all in our licensing business. Both of our business lines –
Enterprise Transaction Systems (ETS) and crossvision – generated impressive growth rates during the
second quarter as well as in the entire first half of 2006.
A good start for crossvision
The past few months have been characterized by the particularly positive
response to crossvision, an SOA suite which we introduced in February.
The broad market interest in this new product is evidence of the clear
focus Software AG places on customer requirements when developing
products. Companies and institutions prefer options that allow them
to open, connect and modernize existing applications rather than
having to replace them. The aim is for IT landscapes to lose their
monolithic structures and adapt flexibly to new process workflows.
This is exactly where crossvision comes into play. Our innovative model for service-oriented architecture (SOA) allows companies to better align their IT systems with their business strategies providing them with competitive advantages.
SOA suite acknowledged by customers and analysts
In addition to the positive response from our customers, crossvision has
also enabled Software AG to gain recognition among industry analysts. For
the first time, Forrester Research, a renowned independent research
institute for the IT market, has named Software AG a world leader in
the category of Enterprise Service Bus (ESB), an essential component
of SOA solutions. In the category of product strategy, Software AG
achieved the number one ranking. This award proves that we are on a
promising path with our SOA products and that we are not merely
pursuing the right vision, but also the best.
Strong starting position for further growth
Modernization, integration and management of business processes are key
factors of SOA. Software AG has specific expertise in all three of
these fields. For SOA, however, mainframe expertise as well as XML
competence is required – a combination that can only be found at
Our aim is to become a leader in the global SOA market. SOA is not
simply a fleeting trend, but represents a paradigm shift in information
technology: SOA is regarded as the most efficient possibility for
integrating heterogeneous IT systems.
The significance of service-oriented architectures is also documented
in a survey conducted by Capgemini, a management and IT consultancy
firm, according to which SOA was named a top priority for 2006 by
one in five companies.
Software AG has already secured a number of large projects since the
launch of the crossvision suite in mid-May. For the second half of 2006,
we expect accelerated growth for this business line based on full
availability of all products and an increasing average contract
Licensing revenues in our Enterprise Transaction Systems business
line have grown substantially. This underscores our excellent market
position and demonstrates the significance of mainframe applications
for customers. A major part of all corporate applications and
business data is stored on mainframe computers, which are and
will remain a fundamental part of information technology due
to innovative technologies and improved performance. We support
our customers in further exploiting these valuable resources
by providing powerful technologies for modernization and
Collaboration and open alliances promote progress. Software AG’s network
has gained a scientific component through the cooperation with
Hasso-Plattner-Institut agreed upon in the second quarter. The
Institute researches the fundamentals of architecture models for
the provision of IT-based services. Together with Hasso-Plattner-Institut,
Software AG will work on innovative IT technologies with an emphasis
on the field of service-oriented architectures.
Chief Executive Officer