Many of us are familiar with the name Software AG but may not be that familiar with where you are at the moment. What is the Software AG of 2010 all about?
We have of course a long history in the database field with Adabas and Natural. They have helped us become a Euro1.1bn, 6,000 employee-strong firm operating in 70 countries worldwide. But we have evolved from being just a pure software products company – though products still account for around 55% of our income – to being a market leader in the new fields of business process excellence, and integration.
What is BPE? Isn’t that just your terminology?
It’s not so much a separate analyst category as a way to evolve and develop your company. We have many users who run mission-critical applications on our core database products who we are helping with our middleware to work on developing truly ‘excellent’ processes, which range from governance or order to cash, anything that is important to the business. The way you do this is with a range of technologies and approaches, from business process management to integration work. So there is no one distinct market, but a couple of neighbouring ones where Gartner and Forrester rate us as technology leaders.
Maybe you could give an example of an engagement to better illustrate this concept?
Many customers are working with us to modernise, repair and Web-enable core applications, which is where our webMethods middleware plays. At the same time, they want to automate and improve business processes, which is critical, because that’s what will really take the company forward and is what really matters. An example is our work with a logistics company where we are integrating GPS to track its vehicles so as to optimise power and fuel consumption to lower carbon emissions and make the overall business much more efficient.
Sounds great, but you are doing all this surely in the context of a very difficult IT market. What makes you so sure Software AG can succeed with this approach in this environment?
The IT market isn’t in difficulty – it’s the previous technologies that are in difficulty. Standardisation and commoditisation has affected hardware and packages, yes. But middleware and integration are far from that status and, with the drive to real Internet-based businesses and the cloud, IT is in far from bad shape. But, at the same time, to succeed right now you absolutely have to have a leadership capability; you have to innovate and be leading-edge or you will not do well. That’s why I am convinced we need the CIO to evolve to become ‘CIO 3.0’. CIO version 1.0 was the one who consolidated and cut costs. CIO 2.0 worked on agility, on making the business more agile. CIO 3.0 is the one who should be leading his company to optimise all its processes to get to that process excellence status, in my view.
So let’s turn that back on you: how will Software AG demonstrate process excellence? How will you perform in the market going forward?
We have told the market we will grow our revenue by 25-30%, our profit by 8-12% and improve our overall growth.
Very confident. And very aggressive?
We are very confident because we have hit every target we have set for the last 26 quarters. We will outperform the market because we are leaders; we have 10,000 enterprises working with us and are convinced we have the right approach to achieve all this.
