Stefan Gruber – VP, IR Werner Brandt – CFO Bill McDermott – Co-CEO Jim Hagemann Snabe – Co-CEO

Philip Winslow – Credit Suisse Gunnar Plagge – Nomura Joseph Bori – Deutsche Bank Gerardus Vos – Citigroup Michael Briest – UBS Ross MacMillan – Jefferies Knut Woller – UniCredit Sarah Friar – Goldman Sachs

Welcome to SAP’s financial analyst conference call. For your information, today’s conference is being recorded. Today’s call will be hosted by Jim Hagemann Snabe, Bill McDermott, and Werner Brandt. I will now hand the call over to Stefan Gruber. Please go ahead, sir.

Yes, thank you. Good morning or good afternoon. This is Stefan Gruber. Thank you for joining us to discuss SAP's first quarter 2010 results. I'm joined by Bill McDermott, Jim Snabe, and Werner Brandt. Werner will discuss the Q1 financials; Bill will provide some color on our regional and industry performance and our go-to-market strategy; and Jim will comment on our product strategy. Following the prepared remarks, we will have time for Q&A. I will now make a few remarks about forward-looking statements. Any statements made during this call that are not historical facts are forward-looking statements, as defined in the US Private Securities Litigation Reform Act of 1995. Words such as anticipate, believe, estimate, expect, forecast, intend, may, plan, project, predict, should, outlook, and will, and similar expressions as they relate to SAP are intended to identify such forward-looking statements. SAP undertakes no obligation to publicly update or revise any forward-looking statements. All forward-looking statements are subject to various risks and uncertainties that could cause actual results to differ materially from expectations. The factors that could affect SAP’s future financial results are discussed more fully in SAP’s filings with the US Securities and Exchange Commission, including SAP’s Annual Report on Form 20-F for 2009 filed with the SEC on March 25, 2010. Participants are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. Before I turn the call over to Werner, I would like to remind everyone that we have SAPPHIRE NOW, our customer and user conference coming up in May. It will be co-located in Frankfurt and Orlando. We will be able to get a firsthand impression of the new products and services we are bringing to the market, and we will have the special focus on a memory technology and, of course [ph], Business ByDesign. Our financial analyst symposium will take place in Orlando on Tuesday, May 18. And with that, I would like to turn the call over to Werner.

Thank you, Stefan. Before I begin, let me remind you that we are no longer reporting in US GAAP. Therefore I will only refer to IFRS and non-IFRS numbers with the focus on our non-IFRS figures, as they are more in line with how we internally look in our operational performance. Also these non-IFRS measures are on the basis of our guidance. We are pleased to report a strong top-line performance, in which software and software-related service revenues grew double-digit in addition to reporting further margin expansion. Let me give you the highlights of the first quarter. Non-IFRS software and software-related service revenues for the first quarter of 2010 were 1.95 billion euros, which represented a year-over-year increase of 10% in constant currency. It was driven by an increase in software revenues across all regions and a very strong support business. In fact, support revenue increased sequentially by more than 2%, which demonstrates that we are well on track with the retention and adoption of enterprise support within our customer base and for new customers respectively. There were also positive effects from currency and lower sales allowances. As a result of the strong top line, the SSRS gross margin increased by 0.7 percentage points year-over-year to 81.6% resulting in an overall gross margin of 67.7%, which is up 3.3 percentage points year-over-year. Looking at the expense side of the P&L, you can see the total operating expenses decrease 6% year-over-year. In contrast to the first quarter in 2009, the first quarter 2010 was not impacted by restructuring expenses, which were 160 million in the first quarter of 2009. However, re-organizations in the first quarter of 2010 resulted in severance expenses of 27 million and unused lease-based expenses of 9 million euro. The first quarter 2010 re-organization expenses negatively impacted the R&D expense to total revenue ratio by 40 basis points, and the sales and marketing and general and administration expense to total revenue ratios by 50 basis points each. The strong top-line performance and the reduction in cost resulted in further margin expansion. Non-IFRS operating margin in the first quarter of 2010 increased 8 percentage points to 24.4% year-over-year. Of the 8 percentage point increase, 6.6 percentage points came from the negative impact of restructuring charges in the first quarter of 2009, with the remaining 1.4 percentage points of 60 basis points as constant currencies, resulting from additional margin growth that we managed to deliver despite severance and unused lease-based expenses of 36 million in the first quarter of 2010. This first quarter of 2010, 36 million expense negatively impacted the margin by 140 basis points in the first quarter of this year. We are striving to increase the operating margin in each and every quarter, which we already demonstrated in Q1 despite the negative impact resulting from these re-organization expenses. Given the tight restrictions on expenses, we maintained mostly in the first half of 2009, we expect a strong impact on our margin expansion second half of 2010. We will continue to stick to tight discipline on expenses and balance investments needs accordingly. This is also reflected in the headcount number, which stayed sequentially almost flat in the first quarter of 2010. The IFRS effective tax rate in the first quarter was 25.7%, which is a decrease of 6 percentage points. The decrease is mainly the result from tax effect from changes in foreign currency exchange rate. We continue to protect an effective tax rate on the IFRS of 27.5% to 28.5% for the full year of 2010. Free cash flow in the first quarter decreased by 46% year-over-year to 750 million euro. The decrease is mainly due to the late maintenance billing as a result of the introduction of our new toolkit support offering the customer with us to make their initial choice between enterprise support or standard support by March 15. During the quarter, we bought back 3.5 million shares for a total of approximately 120 million euros. For the full year 2010, we continue to expect to buy back share in an amount of at least 250 million. On the dividend, the Executive Board and the Supervisory Board have recommended that shareholders approve a dividend of 50 euro cents per share at the Annual General Meeting in June. If the shareholders approve this recommendation, the total amount distributed in dividend would be approximately 594 million euros. Another highlight in the quarter was the successful placement of the Eurobond with a two-tranche structure consisting of 500 million euro four-year tranche and a 500 million euro seven-year tranche. The transaction was heavily over-subscribed and generated strong international demand, with the majority being placed in Germany, Switzerland, and the UK. While we saw a strong demand from retail and private banks, SAP also achieved a well diversified distribution among core institutional investors such as fund managers, insurance companies, and pension funds. The proceed for the transaction, which helped diversify our sources of financing for future, increase our financial flexibility, will be used to for general corporate purposes. Let me finish up by saying that we have maintained our outlook for 2010. Please refer to the press release issued today for the complete outlook. I would now like to pass the call over to Bill. Bill?

Thank you, Werner. And thank you, everybody, for taking the time to join the call with us today. We see clear signs that the market environment is improving. This is underscored by our return to double-digit software and software-related services growth in Q1. We reported software and software-related services growth in all regions. We also reported double-digit growth in our small and mid-sized enterprise business, in SAP Business Objects and in our focus industries. I’m really pleased and so is Jim with the execution in the first quarter. Another positive sign is that volume has stabilized with strong deal volume across direct and indirect channels, and as a healthy mix of small to large transactions. We also saw a return to some large transformational deals that deals over 5 million euro, which accounted for 27% of order entry compared to 12% in last year’s first quarter. And the average deal size was up 36% year-over-year. Most importantly, we captured the positive momentum and extended our leadership position in the fastest growing segments of the business software market. In the BRIC countries, we doubled our business with particularly strong results in Brazil, Russia, and India. In our focus industries like financial services, high tech and retail, we capitalized on the strong demand across all geographies for our industry-specific solutions such as our core banking solution. All of these verticals were in double-digit growth and some high-double digit growth. In business user, we reported strong double-digit growth, good competitive wins in all areas of the product portfolio, and we extended our market leadership in BI, analytics, and performance management. This leadership position is highlighted in a recent Gartner study. Business from new customers in business user segment represented 37% of sales. This is the positive sign and signals that we can expect continued strength in business user as we continue to successfully capture synergies from the Business Objects portfolio within the SAP customer base. In our small and mid-size enterprise business, we saw a return to double-digit growth that was up 13%. We're successfully evolving our go-to-market model to be more scalable and volume oriented, and this is in combination with our inside sales and our channel partners, all expanding nicely. There is also a strong anticipation for our new Business ByDesign solutions across the world. Let me now briefly touch on the regions. In EMEA, we are seeing more optimism. The strongest regions were UK, France, CIS and Iberia. In Germany, customers are once again talking more about investing in software and the pipeline is building nicely, as we brought back our proven leader to run the business. Key wins included Gazprom, T. Choithram and Sons, and HLL Lifecare Limited. In the Americas, we are seeing a re-emergence in the United States. Latin America continued to report the fastest growth, primarily led by strong growth in Brazil. And Canada’s results were simply outstanding. Key wins included Dawn Foods International, McKesson Corporation, and Banco del Bajio. In APJ, we are seeing a return to normalcy, meaning, more traditional buyers are forming a pattern where customers are once again investing for growth, not just efficiency. Moreover, the SME market has strengthened, which is important to us, considering it is one of the largest SME markets in the world. We are starting to see an improved business environment and an improved sentiment in Japan too. Key wins included Taiwan Fertilizers, China East Airlines, and Astellas Pharma. I’d also like to address the trust that markets customers and partners are putting in the SAP brand and our business model. Examples included overwhelming number of customers choosing our enterprise support offer. As Werner rightfully pointed out, our public bond offering in Q1 was significantly over-subscribed. And the continued strong relationships with our ecosystem and alliance partners prevail, as they continued to invest and believe in SAP. In closing, the outlook for business is very compelling. We have put customer centricity and innovation at the center of our business. All SAP people are engaged and passionate to make our customers best run businesses. As growth is coming back on the agenda and business in IT interests are converging, SAP is uniquely positioned to help customers transform and grow. SAP is the only company in the business software industry that combines integrated business process expertise, transactional integrity, industry best practices, and a global delivery capability based on proven end-to-end solutions. The in-process measures for our business underscore this point. There is in fact a strong pipeline for Q2 and the remaining quarters. There is strong momentum in key growth markets and categories. We have a major upcoming milestone with the simultaneous SAPPHIRE NOW in Orlando and Frankfurt, where we will be making key partner and product announcements. Let me stress that we are committed, Jim, myself, the Executive Board, all management across the company, to accelerate SAP’s resurgence in the coming quarters. And we see a clear path for doing so. Jim, I’d like to now turn it over to you.

Thank you, Bill. Thank you, Werner. And welcome, everyone, for today’s conference call. Q1 was indeed a very strong quarter, and we are very happy with the company’s performance. While Bill and Werner provided details on this quarter’s performance, I’d like to take this opportunity to give you a brief update on our innovation pipeline and product strategy. Innovation remains at the center of our growth strategies. And our customers appreciate this. Bill and I have been visiting a lot of customers during Q1. We see the clear change in the strategic agenda of our customers. While tight cost control remains important to all companies and all industries, we see clear signs of growth aspect on the agenda. And the performance in Q1 demonstrates how SAP and our innovations in products are becoming more relevant than ever before. SAP’s innovations are focused around three main areas. First of all, we are determined to continue to expand our leadership position in the on-premise market. SAP is today the undisputed leader in on-premise business applications. With Business Suite 7, we have delivered the most modern and consistent business suite in the market, supporting mission critical processes in more than 25 different industries. We will continue to deliver enhancements to the Business Suite. And with the acquisition of Business Objects, we have also taken the lead in analytics, as recently demonstrated by Gartner. Our customers appreciate the power of consistent business processes and leading analytical applications to help them run their business better and cheaper. Secondly, we are entering into the on-demand market. While we expect the major parts of business applications to remain on premise. We do believe that Software-as-a-Service will be growing rapidly in the years ahead. SAP Business ByDesign is without doubt the most important innovation from SAP for the on-demand market. We have worked hard to ensure that the technology platform in SAP Business ByDesign is not just a me-too, but in fact a next generation on-demand platform. We believe that there is an opportunity for us to disrupt the on-demand market with this platform. And we continue to be confident that we will deliver SAP Business ByDesign in a volume-ready version mid this year. The third innovation area is mobility, or on-device, as we call it. Mobile devices are becoming the preferred interaction point with business applications. We want to make sure that SAP solutions can be accessed from all leading mobile platforms, like RIM, Nokia, Apple, Google Android, etc. We are building and delivering mobile applications on these platforms. And in addition, we will allow partners and customers to build unique mobile experiences on top of the SAP software going forward. With the investments and innovations in all these three categories, on-premise, on-demand, and on-device, SAP represents the most complete and consistent application and technology portfolio in the industry, a portfolio that will deliver superior value to our customers and expand our addressable market and fuel our growth. In addition, we continue to leverage in-memory computing power to achieve an unprecedented speed and simplification of applications going forward. With this technology, we plan to pay the way for real real-time analytics and finally remove the decade-old barrier between business applications and business intelligence. At the same time, we are taking measures to improve efficiency and speed of innovation at SAP. This will allow us to act more like an entrepreneur in terms of speed while keeping the power of scale and robustness we are known for today. In closing, while a software company is all about innovation, products and efficient processes, we only deliver true innovation due to our people. Realizing that people are our most important assets, Bill and I are very happy to announce the latest addition to the SAP Executive Board, Angelika Dammann. Angelika will join SAP's Executive Board by mid-2010. She will lead a newly created Human Resources board area and will also serve as SAP’s Labor Relations Director. Angelika will join us from Unilever where she was responsible for human resources and labor relations. So in summary, we are off to a good start and we have a very strong pipeline of innovations to come. I want to thank you at this stage, and we will now be happy to take your questions.

Thank you, sir. (Operator instructions) Our first question today will come from Philip Winslow with Credit Suisse. Please go ahead. Philip Winslow – Credit Suisse: Hi, guys, great quarter. Bill, just a question for you in terms of sales and marketing. You mentioned the large deals were starting to come back into the pipeline and you saw great success earlier this quarter. When you think about the leverage in the sales force and the sort of spending there, where do you think your utilization rates are on the sales force? And can those trend higher, especially as the large deals come back? Thanks.

Yes, Phil, thank you very much for the question. I appreciate your nice comment regarding the quarter. We feel good about it also. And the sales force right now, as we look at how we retooled the sales force, we built them for transaction volume. As the market dynamics in 2009 were challenging, it also gave us the chance to change. So the reps are now equipped to sell into line of business executives as well as CIOs. As you see the convergence of business and IT taking hold in the market, it’s clear the business executives and IT professionals are going to partner on being more agile and coming up with new ways to innovate and grow. As that takes place, I expect the deal size to increase and I believe our sales force is known – very well known, in fact, for doing the larger transformational deals. And yes, there is leverage there. We absolutely have built a volume and a value machine in the organization, and I’m confident that we are ready for anything. Philip Winslow – Credit Suisse: Great. Thanks, guys.

Okay. Thank you. Next question, please.

Thank you. We’ll move to question from Gunnar Plagge with Nomura. Please go ahead. Gunnar Plagge – Nomura: Thanks for taking my question and congratulations as well. On the support revenue growth, 10%, as you commented, is a really strong number. Could you maybe comment, were there any specific dynamics this quarter? There are so many influences now. So that would be very helpful.

I think what you are seeing is the power of giving our customers’ choice on this service offering. We have given the customers the opportunity to choose between the standard support and the enterprise support. And we are seeing a vast majority of customers going for the enterprise support. So I think that’s a recognition that this support offering is in fact superior in the market, and it’s the right kind of service offering for mission-critical software, like we are delivering to our customers.

Thank you. Gunnar Plagge – Nomura: (inaudible) the vast majority, and could you maybe quantify it a little bit? And the question I had was on support revenue growth going forward. I mean, is it possible to maintain this high year-on-year growth rate going forward?

I think we do not comment on growth rates regarding specific line items in the P&L, but I can give you some indication, and globally I think the adoption rate for enterprise support is close to 90%. And this is a strong signal from the installed base, but also from net new customers that they recognize the value of enterprise support. Gunnar Plagge – Nomura: Thank you.

Okay. Thank you. Next question, please.

Thank you. Our next question today will come from Joseph Bori with Deutsche Bank. Please go ahead. Joseph Bori – Deutsche Bank: Hi, thank you very much for taking my call. Just I would like to get a little bit more color on the consumer behavior in EMEA and the US. I see in EMEA software sales were still relatively weak at 2%, but software and software-related services were very strong at 11%, whereas in the US it was the reverse. Software was already 12% high. Is it fair to say that EMEA was driven by maintenance upgrades and the Americas was more driven by new licenses? If not, could you clarify a little bit?

Yes. I will take this question. Werner here. I think if you look to the simple maturity European markets, then the support revenue takes a big, big share of the total revenue in these markets. And that’s the opposite in the US, number one. Number two, if you look to the buying behavior of customers in the United States, as soon as they see that the common economy is coming back, they invest immediately, and that’s a bit different in Europe. That’s the second argument. That’s the reason why you see strong demand in the Americas for software. That’s the first thing they invest in. And by the way, that’s also true for Asia-Pacific. We see a clear investment path in Asia-Pacific here, and those are the two reasons why we have the situation as we have it. Joseph Bori – Deutsche Bank: Okay, excellent. Thank you. And just, if I may, a short follow-up on the prior question, to me, in terms of the actions of your customers on the maintenance decisions. I mean, there were clearly two things that could happen. Some people might upgrade to the enterprise, but also you are giving the chance for some customers to downgrade if they want to. Can you give us, as well, some comments on how many of your customers actually have chosen to downgrade?

That’s very simple. That’s a difference between roughly 90% and 100%. Joseph Bori – Deutsche Bank: Okay. Thank you.

Thank you. Next question, please.

Thank you, sir. We will take our next question today from Gerardus Vos with Citigroup. Please go ahead. Gerardus Vos – Citigroup: Good afternoon, guys. (inaudible) Thank you very much for taking my question. A couple quick questions, if I may. On the pipeline, I’m just interested in how large it will impact the numbers perhaps later on this year and when will we perhaps see a quarter-on-quarter acceleration in growth, if there are any indications there. And secondly, just on the strategy of buy versus build, I just wonder if you guys have any kind of update on that topic. And then finally, on perhaps your aspirations for business parties in terms of how you perform against the competition and how it will change the landscape. Thank you.

Okay. Thank you very much for your questions. This is Bill. I’ll comment on the buy versus build, and then Jim will take on Business ByDesign. First on the pipeline, we see an ever-increasing pipeline building. We obviously have learned from Werner’s comments that Asia-Pacific and the Americas are showing the more robust pipeline. But Europe too is growing. And in Germany, in particular, we see the fastest movement in the pipeline with new leadership and a focus on the customer. So the pipeline is building. We are actually feeling very good about our business, very good. And we are also feeling very good about the customers’ endorsement of our on-premise, on-demand, on-device strategy. It makes a lot of sense. The buy-versus-build, it wasn’t too long ago when the retail industry did more building versus buying packaged applications. And we now see that that has become a tipping point where packaged software and the idea of buying as opposed to building themselves is taking off. We see this as well in banking and insurance. And in terms of our philosophy, if that was part of your question as well, buy versus build, we’ve always been an organic growth company, and we build our own technology and integrated technology because that gives the customer the best end-to-end business process execution. We will continue to do that. But in areas where the company can move forward such as business intelligence with Business Objects, you can see that we know how to buy and we know how to integrate and we know how to grow. Business Objects portfolio is the fastest growing segment of our business. So if there was a property that could extend our lead in a category and extend our reach, we would look at that very favorably.

And let me take the ByDesign question. We today, just to make sure we have the facts straight, we have today approximately 100 customers running ByDesign productively. And what we are bringing out mid this year is a, what we call it, volume-ready product. As you all know, we have been working hard on the ByDesign software. And as I mentioned in my introduction, we really wanted to make sure that the infrastructure of ByDesign is a next-generation infrastructure for a cloud-based delivery model and not a current generation. With that, we believe we can disrupt the market. So we will be bringing out mid this year the ByDesign next version. And with that, we will go more aggressively into the market. However, if you look at the financial numbers for this year, be aware that this is a subscription-based model in an SME market. And so we have not factored in lots of revenue for this product this year. Gerardus Vos – Citigroup: Okay. Excellent. Thank you very much (inaudible).

Thank you. Let’s take the next question, please.

Thank you, sir. Our next question today comes from Michael Briest with UBS. Please go ahead. Michael Briest – UBS: Good morning or good afternoon. There was a question on the subscription revenues. I mean, I think it was in Q4 that you gave guidance for the year of 360 million to 380 million euros. If I look at the Q1 run rate, you are not far off of that level. Can you talk a little bit about subscription adoption plans? Were there any GEAs or flexible license agreements in the quarter, also whether you are seeing maybe a switch-back to license purchasing and whether you are still comfortable with that guidance, the 360 million to 380 million euros?

Okay. Well, this is Bill, Michael. How are you? First on the 360 million to 380 million, that guidance remains the same. There is no change. There were a few FLAs in the quarter, but you are also right. The customers now are investing again in business software. So there is less of an issue with the CapEx versus the OpEx debate, because business software is regarded as a key investment. And at times when things are improving, we are noticing that the wallets are opening up again for investing in this as a capital expense. So that issue has really gone the other way in a certain sense. As you know, we only have about 14 GEAs and pretty much the same on an FLA basis globally. So there is no reason for anybody to think that this is going to be any different than our 360 million to 380 million guidance.

And maybe if I could add something, Jim here, in terms of the buying pattern overall customers, those customers will have a chance to make a strategic decision on the future infrastructure. The vast majority of them choose SAP, also in very competitive situations. And I strongly believe that they do that because of the consistency in the portfolio. The pieces fit together and they cover both the efficiency, the growth opportunity from a process point of view, as well as the analytics to give them the necessary insight to run their business. I think that’s the strength that we see, and that’s why we see some of these large transactions coming back again, because companies are making strategic moves. Michael Briest – UBS: If I could just follow up with one on the guidance, you've obviously had a very strong start to the year, 10% SSRS growth. The guidance is 4 to 8, but the tone seems very positive. Do you think the scope to maybe raise the guidance at some point as visibility improves? I think on the first call I heard you say maybe in July you would revisit it. Thank you.

Yes, of course, Michael. Now it’s too early based on one quarter to change our guidance. We always said and said this in the January Press Conference that we see potential external factors, which could impact the buying behavior of our customers and prospect. And this is the case unchanged. We will see how the second quarter goes, and then based on half year results, revise – look into our guidance again and may revise it at that point in time. But today it’s really too early to do so. Michael Briest – UBS: Okay. Thank you. Well done.

Thank you. Next question, please.

Thank you, sir. Our next question today comes from Ross MacMillan with Jefferies. Please go ahead. Ross MacMillan – Jefferies: Thank you. Bill, you made an interesting comment around – I think you said 37% of sales from new customers in the business user segment. Can you just do two things? One, clarify what you mean by that 37%, is that order entry, is that new licenses? And then how has that trended? How should we think about that, for example, relative to last year? And what does it tell you about where the dollars are being spent within the customer base?

Yes. So the main thing it tells us is that Business Objects and the portfolio of Business Objects solutions is every bit as relevant to customers that are non-SAP as customers that are SAP. And we plan to make a lot of in-roads this year in selling to non-SAP. And as evidenced by the 37%, we know that that could be a very, very good growth story for us. It’s trending up. What you have to understand about Business Objects in the whole portfolio is that it grew in every region of the world in double digits and every single product in the Business Objects portfolio also grew in double digits. So it’s helping us penetrate non-SAP. It’s also helping us up-sell and cross-sell SAP. So it’s really a very, very positive story within our portfolio And it’s more and more becoming a larger part of our overall business, proving once again that if SAP puts its money to something that makes sense for customers, we can do an acquisition, we can integrate it well and grow it. Ross MacMillan – Jefferies: And then maybe just a follow-up. As we – if we do see more transformational deals, I guess going back to the bread-and-butter of kind of core ERP and so forth, put it this way – do you have the capacity to do that and keep the pedal to the metal on the Business Objects and business user front? In other words, would you get the leverage from core ERP on top of what's happening with the business user strength? Thanks.

Yes. I mean, the answer is definitively yes. There is tremendous opportunity for us to leverage our infrastructure, our sales and marketing force on core ERP. And to the extent we are able to do that on the transformational side, the Business Objects will simply be a force multiplier on top because all of these large transformational deals almost always include the business intelligence platform conversation. And similarly, if transformational deals do come back on the table, which we expect they will, as we look at this past quarter, we’ve replaced the competition in 70 very key wins, 24 of them with a well-known competitors. And what we are seeing is the Business Objects of the line of business conversation is in many cases now the precursor for the ERP conversation. So no matter how you look at it, this is a very powerful product category to be the market leader in. Ross MacMillan – Jefferies: Thanks a lot. Good quarter.

Thank you very much. Appreciate it.

Thank you. Next question, please.

Thank you, sir. Our next question today comes from Knut Woller with UniCredit. Please go ahead. Knut Woller – UniCredit: Yes. Thanks for taking my question, and just maybe two questions. You were just elaborating on business intelligence that it was a major driver of your success in this quarter and growth across all regions. Can you give us some idea of what drove besides the high demand of customers? That’s the first part of the question. And then second, on Business ByDesign, for Jim, in former comments when you had the first launch of the product you were targeting these margins that would not dilute the margin of your core business, can you give us an update about that and the mix you expect to achieve these targets?

Let me start with the highlights from a product perspective. Definitely industry solutions, NetWeaver, direct to components on NetWeaver, and also custom development projects, which contributed to the growth on the product side.

I think it’s very important just to underline that that if you look at the quarter, it’s a solid quarter where growth comes from all regions, but also all product categories. And that means that we have companies looking at their infrastructure, both from a process and an analytics point of view. And the strategic deals are then combined into two, and that’s where we are very strong. So coming back to your questions around ByDesign and the margin in that business, the key technological improvements that we have done on ByDesign was to get the TCO of running ByDesign significantly down. And when I say significantly, I mean significantly. And this means that we are able to grow in and offer with ByDesign a solution at a competitive price, which also has a cost for us that makes it a viable business to be in. That is why we decided not to grow for volume before we had that version of the platform, and that is the version that we will have ready by mid this year. Knut Woller – UniCredit: Thank you very much.

Okay, thank you. We have time for one final question.

Thank you, sir. We will move now to Sarah Friar with Goldman Sachs. Please go ahead. Sarah Friar – Goldman Sachs: Great. Thanks very much for putting me in. Two quick questions. So you just walked through how successful you guys have been with the Business Objects acquisition, which clearly begs the question, how are you thinking strategically right now about acquisitions as a vector for growth? And then I have a quick follow-up.

Yes. So on the M&A front, we are really proud of Business Objects. And we have a strategy in our company, and Jim talked about that in his opening comments around on-premise, on-demand, and on-device and how we orchestrate between these levels of technology use for our customers. We will look at our strategy to expand our addressable market and we will address strategic choices with regard to the on-premise, on-demand, on-device, and things that can move our company forward that makes great sense for the customers we are open to and we will be strategic in our moves. So I think you should know that this is an ambitious management team, a team that understands customers and a team that knows how to win. And we will also make sure that shareholders are well rewarded for the moves we make. Sarah Friar – Goldman Sachs: Got it. And then if I could follow up on BBD, as you think about a year from launch, what are you thinking about as the key metrics you will use to define success? Is it number of customers on the platform? Is it margin like you just got asked? Is it the revenue generated? What are really the key things that you as a senior management team will look at to say, okay, now this has been a successful launch?

Business ByDesign offers us an entry into an on-demand market, which is today relatively immature. And we believe that there is a new play to be played there. So this is an addition to the current business that we have. We are targeting a very specific customer segment. And the way we will be measuring the success of this product is very, very simple. This is a volume-oriented product for an SME market in very large countries. So we will be measuring the number of customers as the key metrics of success. Sarah Friar – Goldman Sachs: Great. Thank you very much.

Thank you. This closes our conference call today. Thank you all for joining, and we look forward to seeing you at the upcoming SAPPHIRE NOW conference in May. Thank you very much and good bye.