Software AG Company Profile


Software AG Company Profile











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Software AG
Company Profile

by Faulkner Staff

Copyright 2021, Faulkner Information Services. All Rights Reserved.

Docid: 00018660

Publication Date: 2103

Report Type: VENDOR

Preview

Germany’s Software AG was founded in 1969 and provides enterprise
infrastructure software centered around BPM (business process management). The
company offers a number of products under the Digital Business and Adabas &
Natural segments. This report profiles Software AG, its strategies, product
offerings, and outlook.

Report Contents:

Fast Facts

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Name: Software AG

Headquarters

Uhlandstraße 9

64297 Darmstadt

Germany

Tel: +49-6151-92-3100

Fax: +49-6151-92-3223
Web: https://www.softwareag.com/

Email: info@softwareag.com/
Type of Vendor: System software and services provider

Founded: 1969
Employees: 4,700 (2021)

Service Areas:
70+ countries
Stock Symbol: SOW (Frankfurt)

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Profile

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Software
AG, based in Germany, is one the largest business software vendors in Europe and
major global player in the market. Founded in 1969 as a software provider for
mainframe computers, Software AG’s continued pursuit of new market areas is a testament to its longevity.
The company now delivers software for data management, application development,
and business infrastructure to clients worldwide. While Software AG offers a
diverse catalogue of products, its specialty is software designed to modernize systems,
enabling them to become more efficient and agile. 

History & Milestone Events

Software AG has provided software to enterprise customers for over 50 years. The company was a pioneer in database management and an early
proponent of the XML standard, which is now a critical part of its portfolio. Other major points in Software AG’s history are
outlined in the
following timeline:

  • 1969—The
    company was founded by Peter Schnell, Peter Page, and four engineers.
  • 1971—Software AG introduced its first database management
    software, built for IBM mainframes. 
  • 1987—The company shifted its focus and began offering
    client/server and other related technologies. 
  • 1992—Peter Page resigned as CEO, and Peter Schnell took
    control in order to protect Software AG from a potential takeover. Schnell
    restructured the company into a private trust after assuming the helm.
  • 1995—Software AG signed a major distribution deal with
    Microsoft.  
  • 1996—Software AG realigned its focus toward that of Internet software.
  • 1997—Software AG divested the majority of Software AG
    Systems (renamed SAGA Systems) as part of a cost-cutting initiative. 
  • 1999—The company launched its initial public offering.  
  • 2001—Software AG reacquired SAGA Systems for $360 million
    in cash. 
  • 2005—Acquired Sabratec, a software vendor that specializes
    in enterprise integration solutions.
  • 2007—The company continued its focus on helping businesses
    modernize legacy applications by acquiring webMethods.
  • 2008—Software AG acquired Jacada’s application
    modernization business.
  • 2009—Software AG reported its acquisition offer for IDS Scheer AG
    on July 13th.
  • 2010—Software AG won a multi-million dollar contract from
    Israel-based Clal Insurance to provide its webMethods Business Process
    management suite as a strategic infrastructure.
  • 2011—The company surpassed its €1 billion revenue
    target in fiscal 2010, one year ahead of plan. Group revenues totaled €1.12
    billion, which exceeded its target set in 2007. Acquires Mobile application
    development company Metismo and in-memory computing company Terracotta for
    undisclosed amounts. 
  • 2012 – Software AG purchased my-Channels, a London-based messaging
    software provider. 
  • 2013 – Software AG sold off its SAP-based business in North America
    and SAP-service operations in the Czech Republic, Hungary, and Slovakia to
    intelligence for undisclosed sums of money. Acquired LongJump, a cloud platform vendor. Acquired Apama, a complex event
    processing platform, from Progress Software. Also acquired JackBe, a
    real-time visual analytics and intelligence software provider. 
  • 2014 – Acquired metaquark, a Berlin-based company that offered
    mobile technology. Sold IDS Scheer Consulting, its SAP service operations
    business, to Scheer Group. 
  • 2016 –  Acquired Zementis, a "deep learning"
    software company based in San Diego. The Zementis ADAPA (Adaptive Decision
    and Predictive Analytics) has been embedded into Software AG’s Digital
    Business Platform. 
  • 2017 – Acquired Cumulocity, a provider of an Internet of Things (IoT)
    device management and application enablement platform. This move will enable
    Software AG to expand its portfolio into the IoT area.
  • 2018 – Announced that Sanjay Brahmawar would take over as
    CEO from Karl-Heinz Streibich. Acquired Built.io, an
    iPaaS company. Raj Datta was named president of Software AG North America.
    The company acquired Trend Miner, which offered a self-service analytics
    platform for time series-based data. 
  • 2020 – Named Dr. Matthias Heiden to the position of CFO
    … Partners with AR (augmented reality) technology provider Re’flekt …
    Forges agreement with ifm group to develop technology for cloud-based
    visualization and analysis of sensor data … Unveils webMethods AppMesh …
  • 2021 – Named Albrecht Schmidt to its Scientific Advisory Board
    … Establishes RPA (robotics process automation) deal with Automation
    Anywhere … Announces impending departure of CRO, John Schweitzer.

Strategy

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In the face of COVID-19, Software AG has strengthened its imperative to
drive toward the ideal of a "Truly Connected Enterprise," bolstered by group
technology, to bring "real business value" to clients. Software AG’s focus is on
sustainable profitable growth to increase its market value continuously. The
company expects that the ongoing development of its product portfolio, which
includes acquired technology integration and continued relationships with
customers and partners, are critical in achieving this goal. According to
Software AG, the product business is the main crux of its strategy.

Strengths

Software AG serves organizations in virtually every industry and in more than
70 countries. It has a large customer base in the public sector, banking,
education, and manufacturing. Its products are designed to provide critical backbone
systems that companies will need in any market, even in an economic downturn. Software AG counts
ING Bank,  Deutsche Telekom, Tory Burch, Yale University, Siemens,
Lufthansa, and Vodafone among its
customers. The company is ranked as a market leader by various firms,
including Gartner and Forrester, for its depth and breadth of solutions and
platforms. 

Weaknesses

Key risk factors for Software AG include:

  • Primary reliance on only two business lines: Digital Business and Adabas
    & Natural, the latter of which projected to pull in 20-30 percent less in
    2021 revenue.
  • Meeting guidance despite "ongoing transformation."
  • Pace of subscription shift moving Software AG into Helix acceleration
    phase.
  • Reliance on continued double-digit bookings growth in "key" geographies.
  • Maintaining focused products and sharper expectation.
  • Continued cultural transformation success.

Outlook

Software AG’s focused, cloud-enabled, subscription-ready product set
continues to resonate with its customer base, and helps the company win new
agreements with competitive situations. At the same time, its exposure to
industries most negatively impacted by the pandemic remains low. Confidence, in
particular, is bolstered by recent investments that delivered sustained,
organic, double-digit bookings development.

In 2021, Software AG plans to work to capitalize on any opportunity created
by its success to date. "Our transformation is forging ahead," said CEO, Sanjay
Brahmawar, "with our focused product set and enhanced execution capability
driving our subscription shift beyond our original plan and helping us win
against competition. In 2021 we plan to accelerate our transformation and push
for continued growth."

In particular, Software AG’s accelerated shift to subscription options has
allowed it to create value it anticipates to continue in upcoming years. In
terms of fiscal 2021 projections, Software AG expects revenue performance of:

  • Digital Business – up 15-25 percent from EUR361 million (US$430
    million) in 2020
  • Adabas & Natural  – down 20-30 percent from EUR129 million
    (US$154 million) in 2020
  • Total Product Revenue – up to 5 percent up from EUR671 million
    (US$799 million) in 2020

Product Lines

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Software AG offers enterprise software for
data management, application development, and business infrastructure. The
vendor also delivers custom offerings for companies in various industries
including banking; communications, media and services; energy and natural;
government; insurance; manufacturing; retail; transportation; and
utilities. 

Table 1
outlines Software AG’s major product lines.

Table 1. Software AG Major Product Lines
Business Description
Digital Business
  • IoT & Analytics
  • APIs, Integration & Microservices
  • Business Process Transformation
  • IT Transformation
Adabas & Natural
  • Agile DevOps
  • API Connectivity
  • Cloud Transformation
  • Adabas Data Integration
  • IBM Z
  • Mainframe zIIP

Competitors

Activity

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Products and Services

Software AG
introduced new TrendMiner software. This application specifically
delivers prediction and product quality features to assist
Digital SCM (supply chain management). The release integrates
with SAP‘s S/4HANA Cloud.

(03/17/2021)

Software AG released the Smart Social
Distancing solution. This product is designed to facilitate
“safe” workplace return, and offers elements to notify employees
of safe distances, report incidents, and show auditable
proof-of-compliance.

(07/22/2020)

Software AG has
unveiled
webMethods AppMesh. This configurable control plane offers an
extension of the webMethods API Management Platform, and is
designed for microservices, APIs (application programming
interfaces), and service mesh.

(04/14/2020)

Software AG
rolled out ARIS Elements. This cloud-based software offers intuitive
business modeling and features BPA (business process analysis)
elements to establish a common business language and process
documentation.

(03/09/2020)

Alliances and Joint Ventures

Software AG and
Automation
Anywhere are collaborating to advance automation processes.
This agreement will see Software AG’s ARIS platform bookend
Automation Anywhere’s RPA (robotic process automation) in order
to provide improved process mining, management, and automation.

(02/09/2021)

Software AG
established a strategic partnership with Re’flekt, an AR (augmented
reality) technology provider. The companies are working to
combine Re’flekt’s interactive AR visualization with Cumulocity
IoT (Internet of Things) real-time machine data. The integration
is expected to improve machine-fix rates in order to extend
maintenance cycles.

(12/14/2020)

Software AG and
du have partnered in a bid to accelerate IoT (Internet of Things)
implementations in the UAE. Together, the companies will
collaborate to offer a subscription-based licensing model for IoT
services that combines both groups’ respective strengths in IoT
and subscription services.

(08/19/2020)

Software AG and
the ifm group have forged a
partnership agreement to focus on developing technology for
cloud-based visualization and analysis of sensor data from
industrial systems and machinery. The ifm edge portfolio of
hardware and software sensor data will specifically now offer
connectivity to the Cumulocity IoT Cloud, with both partners
supplying joint customers with direct plug-and-play packages that
include cloud-based SaaS (Software-as-a-Service) options for IoT
(Internet of Things) deployments.

(07/08/2020)

Software AG
announced that Swift
Labs, a wireless and IoT (Internet of Things) product-design
partner, joined its PowerUp Partner Program. Through this
partnership, customers will gain access to Software AG’s
Cumulocity IoT platform and Swift Labs’ cellular hardware
platform to streamline and deploy IoT initiatives.

(03/11/2020)

Personnel and Organizational

Software AG launched its new PartnerConnect global partner program. This initiative is designed to provide new structure, a portal, training, and incentives to help partners meet evolving customer needs.

(03/01/2021)

Software AG
named Albrecht Schmidt as a member of its Scientific Advisory
Board. Schmidt – who replaces Friedemann Mattern – is a
distinguished professor of computer science at Ludwig Maximilian
University in Munich, Germany, as well as the former chair for
Human-Centered Ubiquitous Media. The Scientific Advisory Board
supports activities in areas such as AI (artificial
intelligence), security, blockchain, IoT (Internet of Things),
5G, software engineering, and quality, in addition to examining
operational and economic issues such as different forms of
business model transformation from an information-systems
perspective.

(02/15/2021)

Software AG
announced that its Chief Revenue Officer, John Schweitzer, will
leave the company to “pursue new challenges.” Schweitzer has
been with the company’s Executive Board since 2018. He will be
replaced by Americas region leader, Scott Little, while CEO
Sanjay Brahmawar will assume temporary, Board-level
responsibility.

(01/18/2021)

Software AG‘s
Supervisory Board announced a number of Director nominations for
election. Announcements include Karl-Heinz Streibich, for
Chairman; Ursula Soritsch-Renier and Ralf Dieter as new
Supervisory Board members; and Markus Ziener, who will stand for
re-election to that same board. Software AG will vote on the
nominees at the company’s Annual General Meeting on May 20,
2020.

(03/05/2020)

Financials

Software AG saw
its revenues drop off, year to year, for both the 2020 fourth
quarter and full year ended December 31, 2020. Q4 sales were
EUR238 million (US$289 million), which is down by 7 percent when
compared to 2019 fourth quarter revenues of EUR255 million
(US$309 million). By segment, Digital Business Platform revenue
fell 8 percent Y2Y to EUR135 million (US$164 million), while
Adabas & Natural revenue declined 12 percent to EUR66 million
(US$80 million). For the 12-month period, revenues were EUR835
million (US$1 billion), which is down by 6 percent from 2019 Q4
sales of EUR891 million (US$1.1 billion), with DBP revenue down 5
percent to EUR449 million (US$544 million), and A&N sales down
28 percent to EUR129 million (US$156 million).

(01/27/2021)

Software AG
recorded a 58 percent year-to-year income dropoff for the 2020
third quarter. Profits were EUR25 million (US$30 million),
compared to 2019 Q3 earnings of EUR59 million (US$70 million).
Revenues, meanwhile, were EUR185 million (US$219 million), an
amount that is down by 12 percent when compared to 19Q3 sales
of EUR224 million (US$265 million). By segment, Digital Business
Platform revenue fell 12 percent Y2Y to EUR103 million (US$122
million), while Adabas & Natural revenue declined 24 percent to
EUR47 million (US$56 million).

(11/18/2020)

Software AG
logged a preliminary 3 percent year-on-year decline in revenues
for the 2020 second quarter ended June 30th. Sales totaled
EUR204.6 million (US$237 million), compared to 19Q2 revenues of
EUR210 million (US$243 million). By segment, DBP – which
includes Cloud and IoT (Internet of Things) operations – fell 3
percent year to year to EUR107 million (US$124 million), while
Adabas & Natural declined 1 percent to EUR52.4 million (US$61
million).

(07/22/2020)

Software AG
logged 3 percent year-on-year revenue growth for the 2020 first
quarter ended March 31st. Company sales were EUR207 million
(US$224 million), compared to 2019 Q1 revenues of EUR201 million
(US$217 million). By business line, DBP revenue increased 4
percent year to year to EUR104 million (US$113 million); A&N
sales increased 5 percent to EUR58 million (US$63 million); and
Consulting revenue fell 2 percent to EUR46 million (US$50
million).

(04/23/2020)

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