Software AG has been around for 50 years, which makes it one of the oldest technology companies still in business today. How has the journey been so far?
Software AG’s journey reflects some of the tectonic shifts in our industry. It began in the age of mainframes when large enterprises and government entities built their own systems. We came up with the world’s first columnar database called Adabas to cater to the massive mainframe and large server deployments, and an application development platform dubbed Natural. We have many customers who started with us in the 1960s and ‘70s and continue to use modern versions of Adabas and Natural, and we have announced that we will continue to support them until 2050. The Public Authority for Civil Information in Kuwait and the Royal Oman Police are two examples of those customers in this region.
The trends of custom development and mega suites in the 1980s and ‘90s were mostly about acquiring solutions, developing and customising them in-house. This continued around until 15 years ago when organisations started feeling the need to be more agile. They realized agility could not be achieved with either of these approaches, built as they were for robustness and specific functionalities.
That’s when they started thinking about platforms, and we have been instrumental in driving this paradigm shift. However, we had to transform ourselves as a company first to do that as we were venturing into a new space at the risk of cannibalizing revenues from our legacy systems. We made that transition quickly, and now we are first and foremost a platform provider.
Customer expectations have changed today – it is no longer about what keeps them up at night, but about how you could help them address challenges they don’t foresee now. With the Uberisation of business, the key to survival is responding to market changes and customer demands in real time, and a platform prepares you for that.
How are you executing on your Helix strategy?
We officially launched our Helix strategy earlier this year. It is not strictly a new strategy but just a fine-tuning of our go-to-market model, which will take us to the ultimate goal of profitable growth. We call it a period of self-reflection.
Software AG has been successful and profitable for a good part of our 50 years of existence, and we cannot be acquired because of our shareholder structure. However, high profitability comes at a cost – it limits your growth potential. What we are trying to achieve is a balance between both, and avoid the trap of focusing only on topline growth.
We believe Helix strategy can help us achieve profitable, sustainable growth, and the technology markets we serve are in growth mode globally. The margin of growth might vary depending on geographies, but it’s growing faster than the infrastructure and data centre markets.
We are giving our customers different options of using our software – not just on the cloud, but also on-premise in a subscription model. We don’t want to go down the path of restricting them to one particular consumption model in line with our motto ‘freedom as a service’. You can either buy our software on the cloud, on-premise or choose to install it in your own data centre in a pay-as-you-go model. Basically, what this means is that our customers can rent the software as opposed to owning it perpetually, and it saves them upfront costs and lowers their risk profile. This freedom of choice is what makes us different from the competition.
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