SOW Software AG

Software AG (Frankfurt TecDAX: SOW) today announced that it has entered into a definitive agreement to acquire Terracotta Inc. This acquisition will allow Software AG to provide innovative cloud solutions and dramatically increase the performance and scalability of its Business Process Excellence platform. Terracotta’s product portfolio provides leading edge in-memory technology and is the de facto caching standard for enterprise Java. Terracotta’s in-memory processing will provide the foundation technology for Software AG’s cloud offerings. With in-memory data access up to 1,000 times faster than database access, this will enable Software AG to increase revenue with existing and new customers through significantly larger business process excellence projects encompassing complex event processing, mobile technology, cloud distribution and virtualization. The acquisition also extends Software AG’s business model options by adding a large and thriving open source community.

Founded in 2003, Terracotta is a privately held company with 55 employees in development centers in San Francisco and New Delhi. With more than 500,000 deployments of the open source technology, including the majority of the Fortune 2000, Terracotta is behind some of the most widely-used software for application scalability, availability and performance.

This transaction will strengthen Software AG’s market leadership in Business Process Excellence. Terracotta will be the in-memory technology in the Software AG product stack, supporting a highly scalable product portfolio and enabling a much broader usage of Software AG’s products in the most extreme application conditions. Customers will now have the most advanced technology solution available for analyzing vast amounts of data more efficiently and cost-effectively. This will provide vital real-time business information and insights and greater control over business processes and operations.

“The integration of Terracotta’s technology with our product portfolio is a major step in ensuring that our customers can fully benefit from the convergence of cloud computing, the mobile web, complex event processing and real-time, multi-party collaboration through unprecedented levels of performance and scalability,” said Software AG CTO Wolfram Jost. “Software AG is also committed to fully supporting Terracotta’s Open Source Communities in further developing this next generation in-memory technology.”

The ability to scale the processing of massive loads of data across flexible, modular, geographically distributed architectures will also drive cloud adoption and transform Software AG into a full Platform-as-a-Service (PaaS) provider in the mid-term. Terracotta’s technology can store up to a terabyte of data in-memory. This will provide customers with an unprecedented boost to application and system performance and scalability.

“The combination of Software AG and Terracotta will provide enormous value to customers of both companies through a comprehensive software stack that supports the level of performance and scale required in private and public cloud infrastructures,” said Amit Pandey, CEO of Terracotta. “Both Terracotta and Software AG are committed to further investment in our technologies and preserving the vibrant open source communities of Ehcache and Quartz.”

Software AG expects to release the first combined products in the fourth quarter, 2011. The company’s cloud based Platform-as-a-Service (PaaS) roll-out will be in 2012.

The transaction has been approved by the Supervisory Board of Software AG. The transaction is subject to customary closing conditions, including regulatory approvals, and is expected to close in June, 2011.

Conference Call/Webcast Information

Three press conference calls on this topic will take place on Monday, May 23, 2011:

Germany:

There will be a press and financial analyst conference call conducted by Wolfram Jost, Software AG CTO and Arnd Zinnhardt, Software AG CFO to discuss the transaction at 10:00 Central European Time. To participate in the conference call, callers can dial:

Germany local:    

+49 (0) 69 7104 914 13

Germany Toll Free: +49 (0) 800 000 434 9 UK local: +44 (0) 203 147 4695 UK Toll Free: +44 (0) 808 238 9113

USA:

There will be press conference calls at 9:00 AM Eastern and 9:00 AM Western. Spokespeople from both companies will be present. There will be an opportunity for press to ask questions at the end of each call.

To participate in the 9:00 AM Eastern (EDT) conference call, callers can dial:

U.S.:     (877) 279-9871 International: (678) 967-4501 Conference ID #: 69397052

To participate in the 9:00 AM Western (PST) conference call, callers can dial:

U.S:     (877) 279-9871 International: (678) 967-4501 Conference ID: 69399454

About Terracotta, Inc.

Terracotta’s software products provide snap-in performance and scale for enterprise applications. A recognized innovator in caching technologies, Terracotta's latest breakthrough is BigMemory™, which bypasses Java garbage collection to enable caches over 1 terabyte. BigMemory and the company's flagship product, Enterprise Ehcache, extend the capabilities of Ehcache. With more than 500,000 deployments, including the majority of the Fortune 2000, Terracotta is behind some of the most widely-used software for application scalability, availability and performance. For more information, please visit www.terracotta.org.

About Software AG

Software AG is the global leader in Business Process Excellence. Our 40 years of innovation include the invention of the first high-performance transactional database, Adabas; the first business process analysis platform, ARIS; and the first B2B server and SOA-based integration platform, webMethods.

We offer our customers end-to-end business process management (BPM) solutions delivering low Total-Cost-of-Ownership and high ease of use. Our industry-leading brands, ARIS, webMethods, Adabas, Natural, CentraSite and IDS Scheer Consulting, represent a unique portfolio encompassing: process strategy, design, integration and control; SOA-based integration and data management; process-driven SAP implementation; and strategic process consulting and services.

Software AG had revenues of €1.1 billion in 2010 and has more than 5,600 employees serving 10,000 enterprise and public institution customers across 70 countries. Our comprehensive software and services solutions allow companies to continuously achieve their business results faster. The company is headquartered in Germany and listed on the Frankfurt Stock Exchange (TecDAX, ISIN DE 0003304002 / SOW).

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