Business Model
            

2021

Software AG uses its technological expertise to connect people, systems and devices, enabling customers andpartners—and the Company itself—to have a positive impact on people's lives. That applies to creating betterproduct offerings in the present as well as embracing co-innovation toward a smarter, more connected andsustainable future.

For over 50 years, Software AG has provided its customers with products and services that expand existing IT architectures through innovation and allow integration of new functions and technologies. Software AG uses its vendor-neutral industry expertise to support companies with digitalization in the Internetof Things (IoT) and Industry 4.0 applications. The Company's digital business solutions enable customers to develop robust solutions that meet the needs of their end users.

This is underpinned by excellent horizontal integration capabilities both within the Company's own product portfolio as well as the partner's technology segments. Software AG offers an open technology and pursues a vendor-neutral approach to integrating the best software solutions available anywhere. The Company preserves customer choice, the ability to use whatever applications they need, and the agility to react to rapidly changing markets and economic conditions. With the broad availability of its software solutions in the cloud, Software AG also enables its customers to quickly implement use cases and create incremental value while reducing operating costs at the same time.

This sustainable success is at the heart of Software AG's long-term customer relationships and is reflected in strong customer loyalty. It protects customers’ IT investments and enables Software AG's long-term planning and smart technology acquisitions while driving continuous product innovation.

Customers are also at the center of Software AG’s flexible licensing options. And, in line with Software AG’s transformation, the Company’s focus on shifting its licensing model towards subscriptions aligns with its customers’ preference for subscriptions over traditional licensing models.

This business model is strengthened by the Company's employees and their customer-centric approach to growth, a connected culture of agility and efficient, transparent work processes. Moreover, as a global technology provider, Software AG has a special connection to customer and employee issues. Responsible conduct and integrity are of key social importance in a highly competitive market environment and also include helping customers and partners conserve resources.

Software AG operates three complementary business lines to address differing customer requirements and business objectives:

• Digital Business
• Adabas & Natural (A&N)
• Professional Services

Digital Business and Data Management contain Software AG’s wide product portfolio and are the primary revenue drivers through license and maintenance fees. License fees for Software AG’s product portfolio can be perpetual, term-limited or subscription. Maintenance charges apply to perpetual licenses and give customers access to support services and product enhancement updates.

The third business line, Professional Services, provides software development services and expertise in Business organization. This accelerates customer deployment of Software AG’s products and significantly shortens the time to providing real business value.

Together, the business lines allow enterprises to successfully master the digital transformation from any starting point and in whatever direction they choose to go.