IOT@SOFTWARE AG THE NEW GROWTH DRIVER Eric Duffaut CCO and Member of the Executive Board 15 th Berenberg European Conference December 6, 2017
SAFE-HARBOR-STATEMENT This presentation includes forward-looking statements based on the beliefs of Software AG management. Such statements reflect current views of Software AG with respect to future events and results and are subject to risks and uncertainties. Actual results may vary materially from those projected here, due to factors including changes in general economic and business conditions, changes in currency exchange, the introduction of competing products, lack of market acceptance of new products, services or technologies and changes in business strategy. Software AG does not intend or assume any obligation to update these forward-looking statements. This presentation constitutes neither an offer nor recommendation to subscribe or buy in any other way securities of Software AG or any of the companies that are members of the Group at present or in the future, nor does it form part of such an offer and it should not be understood as such. This presentation does not constitute an offer of sale of securities in the United States of America. Securities may not be offered or sold in the United States of America without registration or exemption from registration in accordance with the U.S. Securities Act of 1933 in its currently valid form. 2
SOFTWARE AG AT A GLANCE Technology leader for more than 40 years in data management and application development platforms 870+ MILLION IN REVENUE 45%+ recurring 77% product revenue 47% Americas 45% EMEA BY REGION* REVENUE 26% A&N 23% Services 51% DBP BY BUSINESS LINES* 4,400+ EMPLOYEES** Consulting &Services 43% Admin 13% R&D 25% S&M 19% ~ 3.5bn MARKETCAP ~ 64% Free Float * Based on Group product revenue FY 2016 **P&L as of December 31, 2016 3
BUSINESS LINES (UP TO NOW) IoT and Industry 4.0 Platform Integration & Automation Analytics & Decisions In-Memory Data Business & IT Transformation System Support 2050+ Application Development Data Management System Modernization Strategy & Design Product Implementation & Customized Solutions Education & Cloud Services Global Delivery (on-/offshore) Growing Revenue Growing Stability Growing Margin Share of Revenue* 51% Share of Revenue* Share of 27% 22% Revenue* *Group revenue split FY 2016 4
THE NEXT BIG THING: MERGE THE PHYSICAL & DIGITAL WORLDS 5
THE INDUSTRY 4.0 Industrial IoT Imperative Total cost of poor quality amounts to a stagging 20% of sales American Society of Quality Poor maintenance strategies can reduce plant capacity by 5 to 20% Deloitte Unplanned downtime costs manufacturers approx. $50 billion per year Deloitte Productivity in manufacturing has dropped by 2.5% GLOBALLY since 2005. Through 2016, just 16% of manufacturers have adopted Industrial IoT strategies Gartner McKinsey 6
IOT MARKET OVERVIEW 50 billion connected devices by 2020 40% growth in data generated per year 40 trillion Gb by 2020 $ 1 trillion Worldwide IoT revenue projected by 2020 $ 36 trillion Operating costs of key affected industries could be impacted by IoT 7
Key Findings» Early market with huge opportunities» Highly fragmented» Intense competition» No single vendor will dominate the IoT market» Difficult to navigate for end customers 8 For internal use only
CUMULOCITY IOT IS THE GLOBALLY LEADING IOT PLATFORM 1.2B INVESTMENTS in IoT so far Cumulocity IoT SOLUTION ACCELERATORS WORKFLOW AUTOMATION 2007 2008 2009 2010 2011 2012 2013 2016 2017 ENTERPRISE & CLOUD INTEGRATION REAL-TIME ANALYTICS & VISUALIZATION DEVICE CONNECTIVITY & MANAGEMENT IOT IS A STRATEGIC GROWTH AREA FOR SOFTWARE AG 9
CAPABILITIES COMING TOGETHER IoT Platform IoT Suite 10
TECHNOLOGY THAT EXCITES HYBRID INTEGRATION (SAG WebMethods) IN MEMORY DATA GRID (SAG Terracotta) STREAMING ANALYTICS (SAG Apama) IoT Solutions (SAG Cumulocity*) Source: The Forrester Wave : Hybrid Integration For Enterprises, Q4 2016, Forrester Research, Inc., November 18, 2016 Source: The Forrester Wave : In-Memory Data Grids, Q3 2015, Forrester Research, Inc., September 23, 2015 Source: The Forrester Wave : Streaming Analytics, Q3 2017, Forrester Research, Inc., September 7, 2017 Source: MachNation 2017 IoT Device Management Scorecard *Cumulocity is the IoT solution portfolio of Software AG 11
Flexibility & Sophistication DIFFERENT DELIVERY MODELS FOR DIFFERENT CUSTOMER NEEDS IoT PaaS IoT Framework Scale Out (Enterprise Level) Cross divisional end-to-end company processes Coding, professional developers Existing and new IoT applications fully interwoven IoT SaaS Fast Entry Self-service, out-of-the-box Pre-defined solution accelerators Fan Out (Departmental) High productivity, fast go-to-market Smart rules Focus on business users IoT Suite Growing Maturity Level over Time 12 2017 Software AG. All rights reserved
MULTIPLE CONSUMPTION MODELS SaaS IoT Suite PaaS End Customer End Customer OEM SaaS SaaS Service Provider PaaS End Customers 13
OPEN PARTNER ECOSYSTEM System Integrators & VARs Technology, Co-Innovation, Associations Connectivity, Security, Infrastructure Hardware & Devices 14
TARGET MARKETS AND GROWTH FOR CUMULOCITY IOT Sectors/Sub-Sectors Segments Geographies Cumulocity IoT addresses all segment sizes from SMB to large MNCs and grows with IoT requirements, from SaaS over PaaS to multi-vendor frameworks Manufacturing - Heavy Industry, Automotive, IT Hardware, Life Sciences and Healthcare Products Energy & Utilities Oil & Gas, Water, Electric Transportation & Logistics - Air Transport, Motor Freight, Rail and Water, Couriers NAM US, Canada, Latin America EMEA Germany, UK, France, Spain, Italy, Nordics, Benelux, Middle East, Africa APJ Japan, Australia, India, Korea, China Dedicated IoT Business Line (starting 1.1.2018) 15
SOFTWARE AG IOT DIFFERENTIATORS Simple: Fast Time to Value with Preconfigured IoT applications Dynamic: Enabling both Line of Business and Corporate IT use cases on a single platform Efficient: Comprehensive IoT implementation methodology, Model-based IoT scenario planning Flexible: Offering a choice of deployment options (cloud, on-premise, hybrid, edge) Open: Supports multi-cloud and multi-vendor strategies Proven: Based on industry-leading platform 16
SEM/ SDM White labelled SOFTWARE AG - CUMULOCITY IOT REFERENCE EXAMPLES Leading Telco s rely on Cumulocity IoT Leading Industrial IoT providers rely on Cumulocity IoT Leading Smart Equipment Makers/ Operators rely on Cumulocity IoT 17
ADAMOS.COM 18
ADAMOS TOTAL VIEW PARTNER ECO SYSTEMS APP FACTORY ALLIANCE App App NEW App App App App App App NEW APP INNOVATION & CERTIFICATION COUNCIL ADAMOS JV APP MARKET PLACE ADAMOS IoT SUITE Device Connectivity & Management App App App Real-time Analytics & Visualization App Enterprise & Cloud Integration App Workflow Automation App App App App App GOVERNANCE (Standards, Interfaces, ) NEW ADAMOS.COM 19
OUR ROLE IN THE MINDSPHERE ARCHITECTURE A NEW WAY TO SEND DATA INTO MINDSPHERE MindConnect Integration (wm Integration Cloud) webmethods Integration Cloud Bunch of On-premise Adapter MindConnect Adapter/Connector MindConnect IoT Extentions (Cumulocity) Standard Cumulocity Functionality Standard Cumulocity Releases Limited storage period of data in Cumulocity MindConnect API MindSphere Connector MindSphere Connector AWS S3, Salesforce, ServiceNow, AWS AWS Whitelabled wm Agent/ Adapter MindSpere Adapter IT/OT (e.g SAP) webmethods 20 IoT Devices supported by Cumolocity On Premise
EXTENSION OF IOT ANALYTICS WITH DEEP LEARNING 21
FUTURE DIRECTION EXPANDING THE IOT ANALYTICS SPECTRUM Value Descriptive What happened? Diagnostic Why did it happen? Streaming What is happening? Difficulty Predictive What will happen? Machine Learning Why will it happen? 22
INVESTOR RELATIONS Uhlandstrasse 12 64297 Darmstadt Germany phone: +49 (0) 6151 / 92 1900 fax: +49 (0) 6151 / 9234 1900 softwareag.com e-mail: investor.relations@softwareag.com 23