Thursday, 10 January 2008

Software AG wins legal dispute in New York, Opens Brazil Office

Software AG has confirmed that the legal dispute with Consist, their distributor in Brazil, has been settled in Software AG’s favor. The United States District Court for the Southern District New York decided that Software AG had legally terminated their distribution agreement with Consist. The ruling paves the way for...

Software AG has confirmed that the legal dispute with Consist, their distributor in Brazil, has been settled in Software AG’s favor.

The United States District Court for the Southern District New York decided that Software AG had legally terminated their distribution agreement with Consist. The ruling paves the way for Software AG to start direct operations in Brazil from its Sao Paulo office on Jan 1st, 2008, as planned.

Software AG has forecast growth of group revenue in the range of 22- 25 percent in 2008 at constant currency rates. This includes the direct market presence in Brazil which is expected to provide a revenue contribution of between 20 million to 30 million dollars. Based on the court ruling, Software AG does not incur any extraordinary market entry costs and therefore has raised the 2008 target EBIT margin to 23-24 percent. Establishing direct activities in Brazil is a major step for Software AG and will support the company in reaching its target of 1 billion Euros revenue even earlier than the planned 2011.

“This is the latest step in our Geographical expansion program and follows successful entries into Japan, South Africa and the Middle East,” said Karl-Heinz Streibich, CEO of Software AG.

“Customers have benefited greatly from having a direct relationship with Software AG and we look forward to establishing and expanding our Brazil operations. Brazil is a fast growing market, successfully competing on a global basis.”

A substantial user base in Brazil is primarily using Software AG’s Adabas and Natural products. Software AG has invested extensively in opening and modernizing the Adabas/Natural platform in recent years. As well as major enhancements to performance, accessibility and availability, Adabas and Natural have also been extended into the new world of service based IT, business processes and new development environments. Customers in Brazil contracting directly with Software AG will benefit from this expanded portfolio and Software AG’s webMethods product suite.

Brazil is the largest IT market in Latin America and with mainframe sales growing at an annual rate of 27 percent since 2003 it is now the world’s fifth largest mainframe market by dollar value.