Software AG CEO: We beat SAP to in-memory analytics

Software AG is Germany' second biggest software firm after SAP but since the company floated on the Frankfurt stock exchange in 1999, many may have thought it was still stuck on its initial and now well-trodden path in the traditional data processing market.

In the fall out from the dot-com crash at the beginning of the noughties many market territories - including the UK - and many industry segments would have been excused for believing that Software AG was a brand not worth caring about.

The company's sales shrunk, there was under investment in the data processing technologies the company was offering and the marketing and PR budget was slashed. Indeed, for a couple of years there wasn't even a UK-based PR operation - the plug was completely pulled.

At the company's Process World user conference in Orlando this week around 700 delegates rallied round the firm's newly updated products in business process management and business analytics, in the form of webMethods 9.0 and Aris 9.0.

The leaders of the company used the platform to try and convince the EMEA and North American markets that it was an organisation that now had to be taken seriously, when it came to addressing the needs of business process management, data integration and data management, and dealing with what analyst Gartner describes the four forces - Big Data, social media, mobile and that ‘Big Cloud out there’.

In an interview with, SoftwareAG CEO Karl-Heinz Streibich spoke candidly about the firm's past mistakes and prospects.

Arguably one of its biggest mistakes occurred back in the early 1990s when Software AG was in a position to buy SAP. Instead, believing that the now ERP and analytics giant would add little value to its operations, Software AG snubbed the opportunity.

Now, Software AG offers products that form what it calls an "agility layer" on top of the SAP and Oracle business software infrastructures many of its customers run for their business applications. The Software AG offering is designed to help those customers get the most out of their existing business software investments, but surely owning SAP now would have been far more beneficial as far as growth was concerned?

Streibich, who wasn't at Software AG when it rebuffed SAP, says, "Well, you have to take into account the context of the situation at the time, but there is no point even going there now.

"Why didn't you buy Apple shares a few years ago, you probably wouldn't be sat there interviewing me if you had," he threw back.

Streibich went on, "I'm a strong believer in taking account of the forces we will face in the future."

For Software AG, Big Data is the force of the future. Last year it bought in-memory analytics specialist Terracotta. "This move was entrepreneurial excellence,” claimed Streibich. “We recognised earlier than others that in-memory data processing was the future, as customers would not have to use huge amounts of storage, large databases and large hardware infrastructures to process huge amounts of data when tackling the demands of Big Data analytics.

"We realised this before SAP did and the recent moves it has made with its HANA data processing offerings."

Terracotta has now been tightly integrated with Software AG's new Aris 9.0 offering launched in Orlando.

The SoftwareAG CEO was equally bullish about the firm's territorial expansion in untapped markets, although it was a surprise to some when the firm stressed that it was the US it was looking to and not the likes of China or India for growth, unlike many of the industry pack have been saying publicly over the last few years.

At a press conference the previous day Streibich stressed that he thought the US market would provide the company's biggest growth for the next ten years, and "perhaps forever", and not China or India.

The company was formed in 1969, and opened a US operation in 1971, but in Orlando the company made a big play about opening a new US west coast operation in San Francisco - where the next Process World conference will be held in 2013.

Streibich told the company had considered IT advancement, market size and market growth when choosing to focus on the US, and drew market "cube" point diagrams to illustrate that the US was like a giant chocolate box selection when compared with China's Toblerone and India's half a Kit-Kat.

Streibich said, "You do not want to follow the 'mainstream' in this area. Everything we do now is about real growth; there is no bullshit from us."

Total group revenues for 2011 were 1.1 billion euros and the company is committed to achieving "5-15 percent revenue growth" in 2012.

On technology advancement through further acquisitions, Streibich said, "There will be further acquisitions. I told my R&D department six years ago that their main job now was not to develop every product, but to integrate and develop newly acquired technologies and give them a common look and feel for our customers."

Software AG bought US rival webMethods for $550 million in 2007, and has acquired a number of other companies since, aiming to remain relevant as cloud-based and vendor neutral solutions for data management become more prevalent.

Copyright © 2012 IDG Communications, Inc.

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