Local start-up spirit boosts staid German software giant

Software AG is perhaps the last company you’d expect to find in free-wheeling Israel, but the R&D lab here contributes a great deal of knowledge and inspiration

Software AG's world  headquarters in Darmstadt, Germany (Photo credit: Courtesy)
Software AG's world headquarters in Darmstadt, Germany (Photo credit: Courtesy)

On the surface, the presence of an enterprise software company like Software AG in Israel could seem like an anomaly. Local entrepreneurs are known for their flouting of the rules and working outside the system to get the impossible done.

It’s almost the exact opposite of what one would expect from a conglomerate like Software AG, the German maker of the big data systems that run the banks, insurance companies, and government offices of the world. A conservative company from a conservative country, working with some of the most conservative institutions in the world, just seems out of place in the Start-Up Nation.

Actually, Israel and its start-up attitude is very important to Software AG, according to country manager Eran Elroy. “As one would expect, Software AG, with 5,000-plus workers, a billion euro market cap, and customers in 70 countries, is a very well-organized corporation, with a clear hierarchy and clearly-defined method of doing things,” said Elroy. While that works out just fine when trying to deploy solutions for the many Fortune 500 companies and government institutions the company works with, it also means that something may be lost on the creative side of things.

“That’s one reason we’re important to the company,” said Elroy. “As Israelis we are used to working outside the box and coming up with solutions from a totally different angle than what a large corporation with a bureaucratic hierarchy can.”

Not that Software AG doesn’t have a very creative and dynamic side, said Elroy; in the past few years, the entire field of enterprise software has undergone a revolution, fueled in part by companies like Software AG, thanks to new advanced methods of big data analysis.

Eran Elroy (Photo credit: Courtesy)
Eran Elroy (Photo credit: Courtesy)

“Until recently, software companies and integrators like us supplied decision support systems, which is exactly what it sounds like,” said Elroy. “The system would get information from all its sources, analyze it and spit it out to the client, who could use it to make decisions that made sense for them.” Today, though, with more advanced intelligence analysis, the “support” part has been dropped from that term. “Now, we supply decision systems, with the software making almost instant recommendations on how to deal with a problem based on input and analysis,” said Elroy.

The system is the result of years of research, as well as start-up acquisitions by Software AG, with the company envisioning a sleek, super-fast decision-making machine, and acquiring or developing the components to build it. In order for a system like this to work, said Elroy, it has to be able to quickly gather data from many sources, activate algorithms to analyze the data in light of specific problems or issues that concern the organization, and instantly move the digested information over networks, local and wide-area, so that the data can be acted upon.

Consisting of the Apama Real-Time Analytics Platform, Terracota in-memory data analytics, and the Nirvana low-latency messaging system, Software AG’s system gathers big data from web interfaces, data entry, mobile sources, and any other input source, and analyzes it instantly (before it is written to disk), and then transmitted via the messaging system, said Elroy.

“Actionable business intelligence, both on servers and in the cloud, is a major step forward in data processing, saving companies huge amount of money and effort,” said Elroy. In one example, Elroy described how a power utility was using Software AG’s system to anticipate in advance where repair crews might be needed. “The system looks at input from weather forecasts broken down into analyses for smaller geographical areas, matches up that information with the condition of the infrastructure and the likelihood it will be able to withstand a major storm, and sets up repair worker and customer service schedules to ensure that there is enough personnel on hand to deal with the situation in as smooth a manner as possible.”

Those schedules are the business decision end of the analysis – providing the utility with the answers it needs to ensure that the final goal of getting affected customers back on-line with the power grid is accomplished as quickly and smoothly as possible.

Besides “thinking out of the box,” said Elroy, Israel makes another very important contribution to the company. Software AG has been active in Israel since 2005, when it acquired Sabratec Ltd, a privately held legacy integration vendor. In 2007, the company acquired two other companies – SPL and Jacada.

All three make up the Software AG R&D center in Israel, but all the companies had been in business for years before the acquisition – especially SPL, which was established in the 1980s and had many of the largest organizations in Israel as customers. “Our systems are installed on the servers of nearly every government office, insurance company, and bank in the country, so we have a great deal of experience with institutional systems, and that helps out the company as a whole,” said Elroy.

With that, the Israeli “start-up spirit” is definitely a big part of what Software AG was looking for when it came to Israel, said Elroy. “The culture is different in every country and every company, and the culture of Software AG, as a German company, is very much as one would expect a German company to be – very well organized, with a definite hierarchy and protocol.”

In a sense, it’s the opposite of what goes on in an Israeli start-up – but that works out just fine. “We learn from them, and they learn from us,” said Elroy. “Joining those elements of a free and open start-up culture like we have here and a well-organized and methodical culture like they have there makes us into a very effective unit.”

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