The Darmstadt, Germany-based software vendor said it has up to 700m euros ($921.7m) in cash and debt financing to splash on mergers and acquisitions, so purchases in advance of 100m euros ($131.6m) could be on the cards as it targets a compound annual growth rate of 17% between 2008 and 2011 to make it to the 1bn euro barrier.
The company will be building on good performance in 2006. It finished the year with 10% to 483.0m euros ($635.8m) , while net income rose 18% to 73.2m euros ($96.4m). After several years of disappointing growth based on a slow but steady maintenance revenue stream, the company also began to gain traction from new software licensing, which grew 26% to 165.7m euros ($218.1m) to represent more than 34% of total revenue, compared to 30% in 2005.
Software AG’s classic database business grew 27% to 121.7m euros ($160.2m), while its new Crossvision SOA product line faired even better, albeit from a smaller start. License revenues from the company’s own Crossvision products increased from 60% to 41.6m euros ($54.8m).
Crossvision also includes technologies from its CentraSite ESB community project launched with Fujitsu Computer Systems Corp in July last year, and will be key to the company meeting its growth targets. The company has set itself a target of significantly growing its share of the pure-play SOA market, which is experiencing strong growth as businesses look to make their IT systems more flexible to respond to changing business needs.
The company did not detail any acquisition targets, although security is an area that has been mentioned. In this sector the company already has a partnership with web services security and management software firm Vordel Ltd, which integrated its security products with CentraSite and Crossvision in 2006.
Another significant partner that would be attractive to the company if it could afford it is SOA governance vendor AmberPoint Inc. It’s management software is already integrated with the Crossvision suite. Additionally, given the emerging nature of the SOA market, consulting services could be another target area.
