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© 2018 Software AG. All rights reserved.

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Eric Duffaut Jari SalminenChief Customer Officer VP Global IoT Sales

Capital Market Day 2018

March 12, 2018

2 | © 2018 Software AG. All rights reserved.

SAFE HARBOR

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.


Optimize, Transform, Modernize

DBP ProductivitySales Efficiency

INDUSTRYCentric Specialization+142% # Deals / +232% Use Cases

DBP RevenueProfitable Growth

A&N StabilizationPredictability

+50% vs. 14

All time high

Improved Operational Excellence

A&N 2050 program

Strengthened ability to execute GTM

…IN OUR 3 YEARS GTM TRANSFORMATION JOURNEY…WE MOVED THE NEEDLE…

Q4 17 best Quarter ever


+23% Average Deal Size+49% Deals +1M€

BRAND AWARENESS

Increased Deal Size

Gained Relevance through

…IN OUR 3 YEARS GTM TRANSFORMATION JOURNEY……WE MOVED THE NEEDLE…

Social Media followers up 191%Website engagement up 300%

Relevance & Scale

Ecosystem Expansion

Accelerated

Doubled # of partners/ Revenue Sourced by

Partners 28% (2017)

Cloud BusinessEstablished a fast growing

+227% Order Entry / +361% Revenue


130%+ over 3 years

STOCK

Development

Sustained

…IN OUR 3 YEARS GTM TRANSFORMATION JOURNEY…TO MAKE SOFTWARE AG A DESTINATION

Customer Satisfaction

Rating

All time high

NPS from -24 to 18.9


ACCELERATE

SUCCESS…


13%

• Accelerate growth in Emerging markets

• Expand share of wallet in Installed Base

• Simplified Pricing Model: DBP Bundles and Subscription Based Pricing.

• Market Play & Industry specialization: CoEs

SUSTAIN A&N REVENUE

A&N 2050: Legacy Digitization

DBP GROWTH

Effective & Efficient GTM Scalable

• Building a road-2-future for every customer’s mission-critical A&N application to Optimize, Modernize & Transform.

• Continuous innovation in A&N technologies.

• Legacy Digitization

• Establish IOT GTM CoE: strong GTM execution in key selected markets to quickly gain market share.

� 100M€ by end 2020

2018 PRIORITIESRELEVANT - SCALABLE - CUSTOMER CENTRIC - PROFITABLE GROWTH

IOT & CLOUD : ACCELERATED GROWTH

8 |

IOT MARKET VIEW


9 |

LARGE ADDRESSABLE MARKET WITH POCKETS OF VERY FAST GROWTH


€175bn

CAGR

2015-2020

43%

Sources: IDC, Gartner, ABI Research, BCG Internet of Things buyer survey, expert interviews, BCG analysis.

IoT platform market to grow to

€18bn with CAGR 66%

Source: IoT Application, Platform and Services Forecast: 2017-2026, MachNation, September 2017

10 |

MANUFACTURING, LOGISTICS AND UTILITIES LEADING THE WAY


BUT SIGNIFICANT GROWTH ALSO IN B2C, RETAIL AND OTHER

11 |

WHERE DO WE SEE REAL MARKET DEMAND – NOW


AND WHAT ARE OUR CUSTOMERS FOCUSING ON

Smart Equipment Manufacturers

• Air/Gas compression equipment

• Industrial tools, consumer hardware

• Wind turbines

• Pumps/pump solutions

• Metal forming equipment

• Weather monitoring sensors

• Plastic extruders

• Textile machinery

• Healthcare machines

• …

Industrial IoT Solution Providers

Telecommunications

Utilities

Cities/Municipalities

Healthcare

Aviation

Retail

Oil & Gas

Insurance

Beverage

Construction

Facility/Property

…

Meeting regulatory requirements

Differentiating product and service offerings

Cost savings: avoid failure, minimize waste

and loss, remote diagnostics

New service offerings (new business models)

Improving customer service and experience

12 |

A TYPICAL IOT JOURNEY FOR AN ENTERPRISE CUSTOMER


FROM SIMPLE USE CASES TO AUTOMATION, PREDICTION AND INNOVATION

I – Collecting &

acting on data

• Basic functional & non-functional requirements• Device Management, Basic analytics, Simple visualization• Triggering events based on data

II – Automation &

Prediction

• Integration• More complex analytical models• Data reliability is critical

III – New business models, Innovation

• Organisational change• From selling hardware to as-a-service

Focus on ROI and increasing maturity of IoT platforms drives demand

from large enterprise customers

13 |

Yesterday

• IoT solutions focus on solving clearly defined

business problems

• Driven by Business Units

• Very little central IT involvement

BUYING IOT SOLUTIONS IN LARGE ENTERPRISES


CENTRAL ORGANISATIONS ARE GETTING MORE INVOLVED

Today

• Increasing involvement from central IT

• Dedicated IoT team / Centre of Expertise

• Aim to “harmonize” IoT solutions

• Positioning as internal “Service Provider”

Focus remains on solving the

problem with speed and ROI

But decision-criteria is changing

more towards:

• Cloud, multi-tenant platform

• Scalability & reliability

• Flexibility & openness

• Integration capabilities

• …

14 |

SINGLE IOT PLATFORM OFFERING


ADDRESSING THREE KEY MARKET OPPORTUNITIES

One Offering

• Product-based, ready-to-use

• Complete and modular

• Open, extendible to meet future needs

• Flexible deployment with no lock-in

Key Market Opportunities

Connected IndustriesSmart Equipment ManufacturersMultiple verticals, similar needs

Industrial platform and solution providers

Telecom Service Providers


Benefits

• Reduced costs

• Increased customer loyalty

• Increased after sales revenues

“With data analytics our service reliability and product innovation can progress in new ways. We are able to interpret real time data, predict

machine health issues and incorporate in field usage data into product design.”

- Thomas Hamacher, CTO, Certuss

Reactive

Maintenance

costs

Limited

up-sell

16 |

“Cumulocity allows us to provide a uniquely branded, secure IoT monitoring solution to our compressor distributors and service partners allowing them to offer high-quality, real-time monitoring

solution to their customers”

- Sia Abbaszadeh, VP Global Marketing & Technology, Gardner Denver


Capture

operational info

+ provide to the

support org

Minimize

failures

Benefits

• Cost effective solution

• Time-to-value

• White-labelling


Benefits

• Creating a new B2C service offering

• Making the bike more than the

bike

• Creating a relationship with

the consumer


“The Cumulocity solution for our Nespresso Capsule Dispensers helped us to reduce out-of-order and out-of-stock situations to a

minimum.”

- Raoul Marechal, Technics and Operations Manager, Lyreco

Out-of-stock

situations

Reacting to

failures

Benefits

• Reduced costs

• Increased customer loyalty

• Increased revenue

Operational

costs

19 |

IOT GTM EXECUTION PLAN


20 |

© 2017 Software AG. All rights reserved. For internal use only

Apr May Jun Aug Sep Oct Nov

CeBITGermany

Jul DecJan

GITEXDubai

IoT Mobile World Congress

Barcelona

MarFeb

IoT WorldSanta Clara

IOT World Forum

London

Asia IOT Business PlatformVarious cities ASEAN

Bosch ConnectedWorld

Berlin

IoT Solutions World CongressBarcelona

IoT Tech ExpoSanta Clara

IOT Forum

Sydney

IOT World Santa Clara

– Emerald Sponsor

– 2 x speaker session

• Analyst Engagement

– Machnation - 3 Scorecards, 2 white papers, Online TCO

calculator

– Gartner IIOT Quadrant

– Forester webinar

MAJOR MARKETING FOCUS: 2,9M€ INVESTMENT IN IOT


21 |

IOT FIELD CENTER OF EXPERTISE (COE)


One Offering

• Product-based, ready-to-use

• Complete and modular

• Open, extendible to meet future needs

• Flexible deployment with no lock-in: On-

Prem, Cloud & Edge

Key Market Opportunities

Connected IndustriesSmart Equipment ManufacturersMultiple verticals, similar needs

Industrial platform and solution providers

Telecom Service Providers

IOT Centre of Expertise (35 People)

• Globally governed, regionally embedded

• Includes sales specialists, biz dev, IoTarchitects & IoT consultants

• Addressing all customer scenarios, in all regions

• Working in close alignment with regional sales and consulting organizations

One Specialized Team

22 |

MULTI-LEVEL APPROACH


FOR DIFFERENT CUSTOMER NEEDS & PHASES

Growing Maturity Level over Time

Fle

xib

ilit

y &

So

ph

isti

ca

tio

n

IoT SaaS

� Fast Entry � Low Touch GTM

• Web, self-service, supported by Inside Sales

• Pre-defined solution accelerators

IoT PaaS

� “Land & Expand”� Specialized IoT GTM resources

• Fast go-to-market

• Focus on business users

IoT Framework

� Scale out � C Level Support

• “Expand” footprint at existing customers

• Strategic Partnerships

IoT Suite

23 |

AGILE AND FAST CUSTOMER ENGAGEMENT


FROM PROSPECT TO REPEAT CUSTOMER

www

traffic

Free trial POC LAND

# trials # POCs€ of POCs

EXPAND

IOT SALES SPECIALIST

INSIDE SALES CUSTOMER SUCCESS MGR

# dealsRevenue committed

Revenue forecasted

Retention/renewal rateIncremental revenue

Qualified

lead

# leads€ leads

Other

Fast and good deal qualification is critical

Our current win rate with qualified leads is 50%+

Our current win rate from POC is 80%+

Qualification checklist

POC offer template

Key Metrics

Tools

SAG sales

roles

Demo kit

Reference stories

Teasers, whitepapers

Transparent, simple pricing

Contract templateRoadmap webinars

Use case webinars

# leads

24 |

SOFTWARE AG’ IOT PARTNER ECOSYSTEM


2018 FOCUS

Awareness & Mindshare Delivery & Devt. Extension New scalable Routes to

MarketCreate stronger C-Level

AwarenessBroaden Cumulocity IOT Development Capabilities

and Delivery Capacity

Drive Cumulocity IOT market adoption by addressing partner

owned customer base

(OEM, Market Places, …)

Analysts, Strategy & Mgmt

Consulting FirmsGlobal and Regional

System Integrators

IoT Solutions & Services providers

SaaS & Cloud Providers

IOT Hardware & Devices

OT (Operations technology)

Providers

70 to 80% of IoT Business through Partners

25 |

EXPANDING 360O PARTNER ECOSYSTEM


Hardware (IT) Providers

E2E IoTSolution

Providers

Telco operated

Cloud

Strategy & Mgmt

Consulting

IT Consulting & System Integrators

Cloud and SaaS

Providers

SAG‘S IOT ECOSYSTEM SCOPE IS GETTING WIDER

26 |

IoT Suite

MULTIPLE GO TO MARKET MODELS


ECOSYSTEM ENABLING SCALE

End Customer

SaaS

End Customer

PaaS

IoT Platform or

Solutions provider

End Customers

SaaS

IoT Service Provider

SaaS PaaS

PaaS

Documents

GO TO MARKET STRATEGY NEXT STEPS - …/media/Files/S/Software-AG-IR/... · securities of Software AG or any of the companies that are members of the Group at present or in the future,