Software AG: US will be our top market in future

ORLANDO, Florida – German multinational Software AG is daring to defy the trend set by the world’s leading information technology companies, declaring the United States – rather than China or India – as its priority in the coming decades.

“I am convinced the US will be our dominant market for the next 25 years, maybe forever, and not China, India or any other region in the world,” CEO Karl-Heinz Streibich said at the firm’s ProcessWorld.2012 conference in Orlando, Florida, last week. “In IT, 25 years is forever.”

The US market is still the most advanced in the world, he said, adding that the population is completely open to innovation and technology and is hard-working and competitive.

Software AG is Germany’s largest software firm after SAP, with yearly revenue of over 1.1 billion euros ($1.4b.) and offices in more than 70 countries. With a focus on business-process management software, it helps manage big data for many of the globe’s largest corporations as well as most of the major Israeli banks and insurance providers.

“Data is king,” Streibich, who entered his current position nine years ago, stressed during the conference. “I have been in this business for 42 years. When you look back, the ’60s and ’70s were all about having the infrastructure, the main frame, the server. In the ’80s and ’90s it was about using it through standard applications. But now it’s about data.”

“One tree is no forest,” he said. “The data compared to today have been single bits and bytes, but now you can measure anything, anywhere where it happens. You can analyze data stream. For example, with [Software AG customer] Visa we have a solution, where [previously] they did not measure all the transaction data in real-time, but now they can make a fraud test in the one second that they sweep the credit card.”

The Florida conference provided an opportunity for Software to showcase its products to its clients and to unveil major updates to its webMethods and ARIS product suites.

WebMethods 9.0 focuses on uniting the management of big data from any source with automated business processes and applications deployed in the cloud, on mobile devices or in-house.

ARIS 9.0 concentrates on accelerating process improvement by allowing a broader set of corporate skills and experiences to contribute to process design and testing.

Israeli subsidiary SPL Software Ltd. employs about 400 of Software AG’s 5,500-strong global workforce, most of them in research and development. As SPL Software CEO Eran Alroy proudly points out, this means Software AG has a disproportionately large local presence compared to major players like IBM, which employs only about 1 percent of its workforce in Israel.

Unlike other Software AG subsidiaries, SPL began operating independently 35 years ago, acting as the Israeli distributor of the German company’s products, including database management system Adabas. Several years ago Software acquired SPL, in addition to two other Israeli companies, Sabratec and Jacada.

Five years later, despite the strategic focus on the US, Software executives see their Israeli arm as crucial to the company’s fortunes.

“Software AG and Israel have had a really symbiotic relationship,” said Darren Roos, chief operating officer of EMEA region, “in a country which obviously generates a tremendous amount of tech talent and new ideas and provides a viable and geographically closer alternative to San Francisco and the kind of start-up activity there.”

Roos, a South African Jew who lived in Israel for two years in his early 20s, said Software AG’s close relationship with the country was based partly on the strong trade links between Israel and Germany, “and we see ourselves as being a part of that.” But, he added, it was also strengthened by the mutual trust that existed before the 2007 acquisition.

“This relationship is not the same as that which we have with our businesses in Spain and France, for example,” Roos said. “When you have employees you expect loyalty, and in France and Spain and the rest of Europe they were all employees, whereas in Israel they were not – they were partners. They decided what they wanted to do, and that was to sell Software AG technology. It builds a different type of trust.

“Yes, we acquired them later on, but that feeling is still there.” The relationship with Israel is an ongoing process, according to Roos. Although he could not give any specific examples, he said that Software AG has “a lot of money to spend on acquisitions,” and that Israeli companies would certainly come into consideration given the country’s track record.

Roos said: “It’s a case of just keeping our eye on what’s available. Israel will no doubt continue to churn out new tech companies and new start-ups that will add value, and it’s really just a case of us finding a good fit between the technology and maturity of the company and what it is we’re looking for.”

Nadav Shemer attended the Process- World.2012 conference in Orlando, Florida as a guest of Software AG.