IOT@SOFTWARE AG

THE NEW GROWTH DRIVER

Eric Duffaut

CCO and Member of the Executive Board

15th Berenberg European Conference

December 6, 2017

© 2017 Software AG. All rights reserved.

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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.

© 2017 Software AG. All rights reserved.

SAFE-HARBOR-STATEMENT

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SOFTWARE AG AT A GLANCE

© 2017 Software AG. All rights reserved.

Technology leader for more than 40 years in data management

and application development platforms

~ €3.5bn MARKETCAP

~ 64% Free Float

€870+ MILLION

IN REVENUE

45%+ recurring

77% product revenue

4,400+ EMPLOYEES**

R&D 25%

S&M 19%

Consulting

&Services

43%

Admin

13%

47%

Americas

45%

EMEA

REVENUE

51%

DBP

26%

A&N

23%

Services

BY REGION* BY BUSINESS LINES*

* Based on Group product revenue – FY 2016 **P&L as of December 31, 2016

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BUSINESS LINES (UP TO NOW)

© 2017 Software AG. All rights reserved.

*Group revenue split FY 2016

Share of

Revenue* 51%

Growing Revenue

• IoT and Industry 4.0 Platform

• Integration & Automation

• Analytics & Decisions

• In-Memory Data

• Business & IT Transformation

Share of

Revenue*

Growing Stability

• System Support 2050+

• Application Development

• Data Management System

• Modernization

Share of

Revenue*

Growing Margin

• Strategy & Design

• Product Implementation &

Customized Solutions

• Education & Cloud Services

• Global Delivery (on-/offshore)

27% 22%

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THE NEXT BIG THING:

MERGE THE PHYSICAL & DIGITAL WORLDS

© 2017 Software AG. All rights reserved.

6 | © 2017 Software AG. All rights reserved.

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. Gartner

Through 2016, just 16% of manufacturers have adopted Industrial IoT

strategies McKinsey

THE INDUSTRY 4.0

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IOT MARKET OVERVIEW

© 2017 Software AG. All rights reserved.

connected devices by 2020

50 billion in data generated per year –

40 trillion Gb by 2020

40% growth

Operating costs of key affected industries could be impacted by IoT

$36 trillion

$1 trillion Worldwide IoT revenue projected by 2020

8 | © 2017 Software AG. All rights reserved. For internal use only

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

9 | © 2017 Software AG. All rights reserved.

2007 2008 2009 2010 2011 2012 2013 2016 2017

€1.2B INVESTMENTS in IoT so far…

DEVICE CONNECTIVITY & MANAGEMENT

ENTERPRISE & CLOUD INTEGRATION

REAL-TIME ANALYTICS & VISUALIZATION

WORKFLOW AUTOMATION

Cumulocity IoT

SOLUTION ACCELERATORS

CUMULOCITY IOT IS THE GLOBALLY LEADING IOT PLATFORM

IOT IS A STRATEGIC GROWTH AREA FOR SOFTWARE AG

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CAPABILITIES COMING TOGETHER

© 2017 Software AG. All rights reserved.

IoT Platform

IoT Suite

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TECHNOLOGY THAT EXCITES

HYBRID INTEGRATION

(SAG WebMethods)

IN MEMORY DATA GRID

(SAG Terracotta)

IoT Solutions

(SAG Cumulocity*)

STREAMING ANALYTICS

(SAG Apama)

*Cumulocity is the IoT solution portfolio of

Software AG

© 2017 Software AG. All rights reserved.

Source: The Forrester Wave™: Streaming Analytics, Q3

2017, Forrester Research, Inc., September 7, 2017

Source: The Forrester Wave™: In-Memory Data Grids,

Q3 2015, Forrester Research, Inc., September 23, 2015

Source: The Forrester Wave™: Hybrid Integration For

Enterprises, Q4 2016, Forrester Research, Inc.,

November 18, 2016

Source: MachNation 2017

IoT Device Management Scorecard

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DIFFERENT DELIVERY MODELS

© 2017 Software AG. All rights reserved

FOR DIFFERENT CUSTOMER NEEDS

Growing Maturity Level over Time

Fle

xib

ilit

y &

So

ph

isti

cati

on

IoT SaaS

Fast Entry

• Self-service, out-of-the-box

• Pre-defined solution accelerators

IoT PaaS

Fan Out (Departmental)

• High productivity, fast go-to-market

• Smart rules

• Focus on business users

IoT Framework

Scale Out (Enterprise Level)

• Cross divisional end-to-end

company processes

• Coding, professional developers

• Existing and new IoT applications

fully interwoven

IoT Suite

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IoT Suite

MULTIPLE CONSUMPTION MODELS

© 2017 Software AG. All rights reserved.

End Customer

SaaS

End Customer

PaaS

OEM

End Customers

SaaS

Service Provider

SaaS PaaS

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OPEN PARTNER ECOSYSTEM

© 2017 Software AG. All rights reserved.

Hardware & Devices

System Integrators

& VARs

Technology,

Co-Innovation,

Associations Connectivity,

Security,

Infrastructure

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TARGET MARKETS AND GROWTH FOR CUMULOCITY IOT

Dedicated IoT Business Line (starting 1.1.2018)

• 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

Cumulocity IoT addresses all segment

sizes from SMB to large MNCs and

grows with IoT requirements, from

SaaS over PaaS to multi-vendor

frameworks

Geographies Sectors/Sub-Sectors Segments

© 2017 Software AG. All rights reserved.

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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

© 2017 Software AG. All rights reserved.

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SOFTWARE AG - CUMULOCITY IOT REFERENCE EXAMPLES

© 2017 Software AG. All rights reserved.

Leading Industrial IoT

providers rely on Cumulocity IoT

Leading Telco’s

rely on Cumulocity IoT

SE

M/

SD

M

Wh

ite

la

be

lled

Leading Smart Equipment Makers/ Operators rely on Cumulocity IoT

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ADAMOS.COM © 2017 Software AG. All rights reserved.

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ADAMOS.COM

ADAMOS TOTAL VIEW

APP FACTORY

ALLIANCE

PARTNER

ECO SYSTEMS

ADAMOS

JV

… App App

APP MARKET PLACE

APP INNOVATION

& CERTIFICATION

COUNCIL

App App App

App App App App

ADAMOS

IoT SUITE

GOVERNANCE (Standards, Interfaces, …)

App App App App App App App

NEW

Enterprise & Cloud Integration

Device

Connectivity &

Management

Real-time

Analytics &

Visualization

Workflow

Automation …

NEW

App App

NEW

© 2017 Software AG. All rights reserved.

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OUR ROLE IN THE MINDSPHERE ARCHITECTURE

© 2017 Software AG. All rights reserved.

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

A NEW WAY TO SEND DATA INTO MINDSPHERE

MindConnect API

IoT Devices supported by Cumolocity

AWS S3,

Salesforce,

ServiceNow,…

On Premise

MindSphere

Connector

Whitelabled

wM Agent/

Adapter

MindSpere

Adapter

IT/OT

(e.g SAP)

webMethods

MindSphere

Connector

AWS AWS

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EXTENSION OF IOT ANALYTICS

© 2017 Software AG. All rights reserved.

WITH DEEP LEARNING

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FUTURE DIRECTION EXPANDING THE IOT ANALYTICS SPECTRUM

Difficulty

Value

Descriptive

What

happened?

Predictive

What will

happen?

Diagnostic

Why did it

happen?

Streaming

What is

happening?

Machine Learning

Why will it happen?

© 2017 Software AG. All rights reserved.

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INVESTOR RELATIONS

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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