Annual Report 2007
Strategy
1/3 forward
The strategy of Software AG is sustained business development and we implement it systematically. Our goal of profitable growth is based on four pillars:
- Organic growth through innovation
- Geographic Expansion
- Growth through acquisitions
- Addressing new customer groups through partnerships
Our focus for 2008 will be organic growth in both business divisions, including the expansion of our market presence in Brazil.
Our vision is to continue to expand our market position as a leading, independent provider of infrastructure software in order to become the global market leader in the markets of the future SOA and BPM.
Organic growth through innovation
Software AG would like to achieve organic growth of approximately 10 percent annually in both business divisions, ETS and webMethods, through innovation, a consistent customer focus and efficient processes.
The ETS business division, with its strong sales, is our Company's mainstay. By continuously developing our products in the ETS business division, we increase the efficiency of our customers' application systems and extend the lifecycle of those systems. For customers, this means protection of their investments and accordingly an improved return on investment. By expanding our ETS business, we retain a significant part of our existing customer base.
Software AG has built up a second key area of activity in the webMethods business division, a globally leading product portfolio in integration software. The existing technological leadership in high-performance database systems will be expanded into the growth markets of SOA (including SOA Governance), Business Process Management (BPM) and Business Activity Monitoring (BAM). Independent industry analysts confirm the leading position of Software AG. The emphasis will be on the ability to develop technologies such as SOA Governance in-house.
The innovative power and accordingly the technological leadership of Software AG form the basis for our organic growth.
The purchases of 80 percent of SPL, webMethods, Inc. and a segment of the software business of Jacada (as of January 1, 2008) and their integration were the results of our M&A activities. The strategic reasons for the purchase of webMethods, Inc. included the additional product portfolio, approximately 1,000 new customers, a stronger market presence in the U.S., webMethods experience in additional industries, partnerships with system integrators and an established brand in the integration business. To preserve the value of the brand name, webMethods will be continued as a portfolio brand. By acquiring webMethods, Inc., Software AG has established a second key area of activity with strong sales much faster than would have been possible through organic growth of the former business division Crossvision.
The two business divisions of Software AG, ETS and webMethods, are now the essential key areas of activity. For that reason, a strategic decision was made in 2007 to reorganize the company from having a regional structure to a business division structure. Each business division was assigned one member of the Executive Board to be responsible for product development member of the Executive Board to be responsible for product development and one for sales. After being organized regionally in the past, sales activities were distributed to both business divisions.
