Stefan Gruber - Investor Relations Werner Brandt - Chief Financial Officer, Executive Board Henning Kagermann - Chairman of the Management Board, Chief Executive Officer Leo Apotheker - Executive Board Member, Global Field Operations

Charles Di Bona - Sanford Bernstein & Co. Marc Geall - Citigroup Johannes Ries - Cominvest Rick Sherlund - Goldman Sachs Raimo Lenschow - Merrill Lynch John McPeake - Prudential Michael Briest - UBS Matthew Hammond - Credit Suisse Gary Rollo - Morgan Stanley Dean Witter

Welcome to SAP’s third quarter results conference call. This call is being recorded. Today’s call will be hosted by Henning Kagermann, Leo Apotheker and Werner Brandt. I will now turn the call over to Stefan Gruber. Please go ahead, sir.

Good morning, or good afternoon. This is Stefan Gruber. Thank you for joining us to discuss SAP’s third quarter 2006 results. I am joined by Henning Kagermann, Leo Apotheker and Werner Brandt. Werner will discuss the Q3 financials in detail. Leo will comment on the current business environment, our regional performance, and Henning will then provide some further in-depth commentary on the quarter and SAP's product successes. Before we start with the call, I would like to remind everybody about the SAP investor conference on December 4th in Las Vegas. This conference will be held together with SAP's industry analysts summit. Invitations for this event will be circulated shortly. In addition, I will 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 U.S. Private Securities Litigation Reform Act of 1995. Words such as “anticipate,” “believe,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “project,” “predict,” “should” 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 U.S. Securities and Exchange Commission, the SEC, including SAP’s most Annual Report on Form 20-F for 2005 filed with the SEC on March 22, 2006. Participants of this call are cautioned not to place undue reliance on these forward-looking statements, which speak only as of their dates. With that, I would like to hand things over to Werner.

Thank you, Stefan, and good morning, good afternoon to everybody on the call. We reported a strong third quarter, with software revenues increasing 17% to EURO 691 million. On a constant currency basis, software revenue grew 20% year over year. Maintenance revenues were EURO 884 million, which was an increase of 10% compared to the third quarter of 2005. Sequentially, from the second quarter of this year, maintenance revenues increased by EURO 28 million, which was in line with our expectations. Third quarter product revenues, which consists of software revenues plus maintenance revenues, increased 13% year over year to EURO 1.6 billion. On a constant currency basis, product revenues grew 16%. Third quarter service revenues were EURO 653 million, which represents a year-over-year increase of 8%, or 11% at constant currency. Total revenues for the third quarter were over EURO 2.2 billion, compared to EURO 2 billion reported for the same period last year. This was an increase of 11% or, at constant currency, 14%. Operating expenses increased by EURO 165 million to EURO 1.7 billion, or 11% year over year. The higher operating expenses was a result of additional personnel. We hired 3,446 FTEs since the third quarter of last year, and increase third-party usage. For the third quarter of 2006, we had EURO 14 million and EURO 9 million of stock-based compensation and acquisition related charges respectively. This compares to EURO -6 million stock-based compensation expenses and EURO 9 million of acquisition related charges respectively for the third quarter of 2005. On a pro-forma basis, which excludes these stock-based compensation and acquisition related charges, third quarter expenses increased EURO 145 million, or 10% compared to the third quarter of 2005. Operating income was EURO 583 million for the third quarter, representing an increase of 13% compared to the third quarter of 2005. Pro forma operating income, which excludes stock-based compensation expenses and acquisition related charges, was EURO 606 million, an increase of 17% compared to last year’s third quarter. The operating margin for the third quarter was 26%, which was up 30 basis points from 25.7% operating margin we reported in the third quarter of 2005. Pro forma operating margin, which excludes stock-based compensation expenses and acquisition related charges, increased by 1.2 percentage points to 27% in the third quarter of 2006, compared to 25.8% in the same period last year. The main drivers for this pro margin improvement can be summarized as follows: the pro forma product margin was 84% for the third quarter of 2006, which was an increase of 40 basis points compared to the third quarter of last year. In the third quarter, we saw an increase in purchased licenses and litigation related expenses, while support costs remains relatively flat. The pro forma service margin was 24% for the third quarter, which was up 80 basis points compared to the same quarter last year. The improvement was a result of higher consulting margins due to higher billable utilization rates in the U.S. and, to a lesser degree, in EMEA. This was somewhat offset by a negative impact from an increase in hosting related expenses. As a result of the pro forma margin improvements in both product and services, our 2006 third quarter pro forma gross margin increased by one percentage point to 66% compared to 65% for the third quarter of last year. Pro forma research and development expenses increased 27% for the third quarter, and represented 15% of total revenues, compared to 13% of total revenues for the third quarter of last year. The increase in R&D on an absolute basis was a result of our further investment in R&D. We hired additional 1,847 FTEs compared to last year’s third quarter. There, of roughly 500 came through acquisitions to SAP. Pro forma sales and marketing expenses increased 4% for the third quarter, and represented 20% of total revenues, compared to 21% of total revenues in last year’s third quarter. The absolute increase in sales and marketing expenses was mainly due to additional sales headcount, roughly 550 FTEs, partly offset by positive impact from lower marketing costs year over year. Pro forma G&A expenses for the quarter were EURO 107 million, slightly below last year’s third quarter, represented 4.8% of total revenues compared to 5.4% last year. Third quarter 2006 net income rose 16% to EURO 388 million. Pro forma net income, which excludes stock-based compensation expenses, acquisition related charges, and impairment related charges, rose 20% to EURO 405 million. Earnings per share for the 2006 third quarter was EURO 1.27, compared to EURO 1.08 in the same period last year. Our pro forma EPS, which excludes stock-based compensation, acquisition related charges and impairment related charges, was EURO 1.32 compared to EURO 1.09 in the third quarter of 2005. Our effective tax rate for the third quarter was 35%, compared to 35.2% in the third quarter of last year. For the full year, we expect [an effective tax rate] of 32.5%. The expected full-year tax rate was impacted by a one-time tax benefit amounting to EURO 30 million we had in the second quarter of this year, mainly due to the settlement with the fiscal authorities on one specific item. For the nine months ended September 30, 2006, cash flow from continuing operations was nearly EURO 1.3 billion. Capital expenditures were EURO 233 million, leaving free cash flow of more than EURO 1 billion. This compares to free cash flow of EURO 901 million for the nine-month period of last year. Finally, use of cash flow for the first nine months of this year was approximately EURO 500 million in acquisitions, to mention the acquisition of Frictionless Commerce and Virsa, EURO 400 million paid in dividends to our shareholders, and roughly EURO 970 million for share buy-backs. As a result, we had liquid assets, including short-term marketable securities, of EURO 2.8 billion at the end of the September quarter, compared to EURO 3.4 billion in liquid assets, including short-term marketable securities at the end of 2005. We continue to plan to use cash for further dividend payment, fill-in acquisitions, and share buy-backs. For the first nine months, we bought back 5.8 million shares, for a total of roughly EURO 970 million. At September 30, 2006, treasury stock stood at 11.35 million shares, which included the release of 1.1 million shares for treasury during the nine-month period. Given the company’s strong free cash flow generation, we will further evaluate opportunities to buy back shares in the future. Year-over-year headcount increased, as I mentioned before, by nearly 3,500 FTEs and by 725 FTEs sequentially from the period ended June 30, 2006. At the end of the third quarter, total headcount stood at 38,468 full-time equivalents. We are still targeting to hire 3,500 FTEs besides the ones we get on board via acquisitions for 2006. On the 725 FTEs hired in the third quarter, 59% were in R&D, and of the total R&D, 75 were hired in low-cost areas. Through acquisitions for the year-to-date, roughly 450 FTEs came to SAP through acquisitions. Let me now finish up with an update on our outlook for 2006. The company increased its expected full-year 2006 pro forma earnings per share, which excludes stock-based compensation, acquisition related charges, and impairment related charges. The company now expects pro forma earnings per share to be slightly above the previously communicated range of EURO 5.80 to EURO 6.00 per share. The company reaffirmed that it expects full-year 2006 product revenues to increase in the range of 13% to 15%, compared to 2005. This growth rate is based on the company’s expectation for full-year 2006 software revenue growth in the range of 15% to 17%, compared to 2005. From today’s perspective, it appears less likely that product or software revenue will reach the upper end of the aforementioned ranges. The company reaffirms that it expects the full-year 2006 pro form operating margin, which excludes stock-based compensation and acquisition related charges, to increase in the range of 0.5% to 1.0% compared to 2005. From today’s perspective, it appears less likely that the pro forma operating margin increase will be at the upper end of the aforementioned range. The outlook continues to be based on an assumed U.S. dollar to EURO exchange rate of $1.23 per EURO 1. I would now like to pass it over to Henning.

Thank you, Werner, and I am pleased you can all join us today on this call. I want to make a short comment on the business environment and quickly turn it over to Leo, for an update on the competitive environment, deal metrics and our regional performance. The business environment has remained stable with no adverse economic conditions to really affect our business. To no surprise, however, pricing is still tough, but it is stable and I would not expect any near-term change in pricing. In addition, we closed most of the deals that slipped from the second quarter. Now, let’s continue with Leo.

Thank you, Henning, and good afternoon, or good morning to everybody. From a competitive standpoint, we continue to win, and that comes down to the simple fact that SAP is the strategic choice for customers of all sizes. We have an intense customer and product focus. This has allowed us to build the largest customer base in the industry, and we did it organically, meaning that our customers make the decisions themselves to partner with SAP. Our customer satisfaction remains at the highest levels that we have seen ever at our company, and our already high win rate against our next largest competitor increased even more in the third quarter, as we won 85% of the competitive deals. Speaking of competitive data, I recall that our next largest competitor recently claimed 88 wins against us. We checked the claim, and in truth, the actual number is less than 5% of that -- only four wins against SAP. This takes me to our safe passage initiative which, as you know, helps J.B. Edwards, PeopleSoft, [C-Ware], and Retek customers migrate away from the uncertainties created by the awkward acquisitions to SAP's market-leading solutions, which provide the same customers with a clear path forward and long-term IT investment security. To date, around 400 of these customers have opted for the safe passage initiative. 200 of those customers came in the first nine months of this year, and 90 in this quarter alone. Some key safe passage wins in the third quarter include Oncology Therapeutics Networks and Philadelphia Media Holdings in the U.S., IndiaBulls Financial Services and Multimedia Development Corporation in Asia-Pacific. Let me now provide you with some additional customer metrics for the third quarter. In the third quarter, order entry in the pipeline remained strong and the number of new contracts signed increased 18% year over year. The share of new customers based on order entry was 19%, but as we continue to sign more deals with mid-market customers, it is also important to talk about the share of new customers based on the number of contracts, which was 32%. These greater than EURO 5 million accounted for 35% of order entry in the third quarter, up from 24% in the third quarter last year, while these less than EURO 1 million accounted for 36% of order entry, down from 42% in the third quarter of last year. Over the past 34 years, we have built the largest customer base in the industry, and have also gained the greatest industry experience and developed the deepest vertical expertise, not only in our traditional discrete and process industries, but also in services, financial services, and consumer products, to name a few. We have continued to succeed in growing our business in our focused industries of retail, public services, financial services, and high tech. Retail is a great example of where we are showing tremendous progress, as it was the fastest growing vertical in 2005 and continues to be one of the fastest growing verticals in the first nine months of this year. Key retail wins in the third quarter included Lifetime Brands in the U.S., Del Rigo SPA in Europe, and [FILL Corporation] in Japan. All three were also safe passage deals. Other strong industry performance year-to-date include consumer products, utilities, and telecommunications. Let’s now take a look at the regional performance. For the first time since the third quarter of 2000, we reported double-digit growth in four regions. Moreover, in all key strategic growth markets, in which there are nine, we performed extremely well, with double-digit and, in some cases, even triple-digit growth rates. Software revenue in EMEA was up 14%, or 15% at constant currencies. We had very good performance from the U.K. and a superb performance in Russia. Germany was within our expectations, with software revenues increasing 3%. Key contract wins in the EMEA region included one of the largest European tel-co providers, which will make an announcement about this in the very-near future, and which was a large customer. Another key competitive win included Fujitsu Siemens, which was a large cable customer. Other wins in Europe included ABN Amro, BMW, City of Nuremberg, Banco de Portugal, and Tommy Hilfiger Europe. The Americas region continued to perform extremely well, with a 19% increase in software revenues for the third quarter. At constant currencies, the growth rate was 23%. Software revenues in the U.S. grew 15%, and at constant currencies, the growth rate was 20% for the third quarter. Latin America also continued to perform well, and key contract wins in the Americas region included State of Michigan and Commercial Metals in the U.S., and Banco Bradesco in Brazil. Software revenues in the Asia-Pacific region increased 22%, or 28% at constant currencies. Japan rebounded in the third quarter, and is on target for a better second-half, in line with what we stated earlier in the year. Software revenues in Japan increase 51%, or 65% at constant currencies. Key competitive contract wins in the Asia-Pacific region in retail were Wumart in China and Reliant Industries in India. Other wins in the region included China National Offshore Oil Corporation, Kyocera Mita Corporation, and Multimedia Development Corporation. I would now like to pass it back over to Henning.

Thank you, Leo. We are all pleased to report another strong quarter, which marked 11 consecutive quarters of double-digit growth at constant currency. Software revenues and product revenues at constant currencies grew at 20% and 16% respectively, and looking at the nine-month results, we are right on track to achieve our full-year outlook. Looking back at second quarter results, the strengths of our business for the first nine months reinforces a point I have always made that you should measure our business based on the long-term, not one quarter of results. Our 17% reported software revenue growth outperformed the market, and we continued to gain share, as measured against the $16 billion call enterprise application software market. Based on this market, our share in terms of license revenues, on a rolling four quarter basis, stood at 22.6% at the end of the third quarter of 2006, which is up by 90 basis points since the last quarter. This compares to Oracle at 9.9%, and Microsoft business solutions at 4.9%. At 22.6%, we are more than two times larger than our next largest competitor in terms of software revenues on a rolling four quarter basis. Our continued strong results and share gains have been driven by our strategy to grow our company organically, instead of through massive acquisitions. It has been key to our success in delivering on our visions and promises, delivering new and innovative products and bringing these products to market on time, and being the first to deliver an enterprise services oriented architecture. In a nutshell, our organic growth strategy has allowed us to win. I want to reiterate that our growth strategy has not changed. We will continue to look primarily to organic growth, augmenting with smaller technology and product acquisitions, and some co-innovation with partners. Some of the new innovative products that we have brought to market recently includes CRM On Demand, the BI Accelerator, and Duet. We have announced the third wave of our CRM On Demand solutions, which now includes customer service capabilities, successfully meeting our quarterly product roadmap laid out in February of this year. The BI Accelerator has received excellent feedback from customers and is in high demand. We already demonstrated remarkable capabilities of this product, 1 billion records analyzed in three seconds, using affordable, off-the-floor hardware is a convenient and easy implementation of the appliance set-up and built on SAP NetWeaver. Duet is another product that is in high demand from customers and partners. Duet is a great example. Their co-innovation with partners can bring tremendous value to customers. We continue to make excellent progress in the mid-market, as evidenced by the continued growth in the number of channel partners and mid-market customers. The channel business, from which we will derive volume growth, will be key to achieving our 2010 aspirations of generating 40% to 45% of our order entry from the mid-market. That said, the number of channel partners grew 22% year over year, while the number of channel customers increased 36%. We will continue to expand our mid-market presence with more aggressive go-to-market strategies heading into 2007, and more focus on the volume business model. I would like to conclude by talking about our enterprise SOA roadmap. Since FY2004, when we first exhibited our roadmap to our external audiences, including customers, partners, press and analysts, we have either delivered on or ahead of schedule, with only minor modifications. I am pleased to say that as we are nearing the end of our published roadmap in 2007, we continue to remain on schedule for our deliverables and, importantly, well ahead of our next largest competitor. SAP NetWeaver, which has been a key deliverable of our roadmap, continues to perform well. For the first nine months, we reported NetWeaver sales of EURO 417 million, of which 21% came from standalone NetWeaver sales. Another successful deliverable I would like to mention is mySAP ERP 2005, which evolved into the markets first business process platform. It allows customers in evolutionary and smooth transition to enterprise SOA, and provides continued innovation without upgrade with add-on composite applications and enhancement packages that leverage the flexibility of enterprise SOA. Enhancement packages deliver business value through additional enterprise services and composite applications, as well as technical and functional enhancements without disruption to customer deployments. mySAP ERP is the first services-enabled ERP suite in the industry that provides flexibility and innovation for customers, hence the entire eco-system of partners and ISVs. Our eco-system continues to grow. We now have 1,500 solutions. These are powered by or certified by NetWeaver, and the SAP development network has expanded to 0.5 million registered developers. In addition, we have a growing set of industry networks, enterprise services community, and newly formed business process expert community to help drive further innovation on our platform. At the end of 2006, we will enter the first pilot customer testing of our enhanced mid-market solution portfolio. The next SAP, all-in-one version, based on the business process platform, delivered with a standard mySAP ERP 2005, as well as a new mid-market product featuring alternative deployment models. That keeps us right on track, keeps the tradition of our product portfolio into one cohesive enterprise service oriented architecture blueprint. The flexibility this architecture provides helps our customers to more effectively compete in a world of accelerated change. With new and innovative products and an impressive win rate, and a strong push into the mid-market to help drive revenues, we believe we are in an excellent position from a product, market, and competitive standpoint. This will help us reach our 2010 growth ambitions. I thank you, and we will now be happy to take your questions.

(Operator Instructions) Our first question comes from the line of Trevor Di Bona. Please state your company name, followed by your question. Charles Di Bona - Sanford Bernstein & Co.: It’s Charlie Di Bona from Sanford Bernstein. Leo, could we talk a little bit about the book entry, which was obviously a big issue last quarter? It seems like some of the shorter term deals have passed through the pipeline now through the income statement. But one of the things you mentioned last quarter was the longer term deals. It is hard to see that showing up on the deferred revenue, but your larger deals seem to be gaining share as a percentage of the total mix. Can you talk about the pattern you are seeing with longer term deals? Is this a trend? Was Q2 more of an anomaly? Could you just discuss the pattern of buying of these larger deals?

Well, Charles, as we said in Q2 already, we have a rather comprehensive portfolio for purchase to the market. One of them is our grow with enterprise agreement deals, of which we have a total of four by now, so there is nothing really new there. In fact, what happens, and it is a bit driven by seasonality and the nature of a given deal, sometimes a deal just closes a little bit faster than another one. That is the nature of the game. What happened in this quarter is that we saw a flat increase of a few larger deals, but I would warmly recommend not to read anything into that. It is certainly not a trend. It just happened to be this case in this quarter. To buying behavior, for that matter, it is as it was, having already indicated that the pricing remains rough, and that is the case. But our competitive position is strong and we continue to win, as I said in this quarter, about 85% of the situations, and I hope this will continue in the future. Charles Di Bona - Sanford Bernstein & Co.: Thank you.

Thank you. Next question, please.

Our next question comes from the line of Marc Geall. Please state your company, followed by your question. Marc Geall - Citigroup: Good afternoon, everyone. Marc Geall, Citigroup. A quick question to Werner, really. You sort of highlighted the fact that you have done about EURO 500 million of acquisitions so far this year. Could you talk a little bit about when you feel the acquired revenues become meaningful, and at what threshold you would be willing to spit those out?

I can give you some indications here. If we talk about the acquisitions in the video sector, including Lighthammer, and manufacturing side, the revenue we generated via these acquisitions is roughly 1%. Now, Virsa is a different type of an acquisition because we sold the Virsa product, so it did not add to our revenue per se because it was already included, as in our -- or in our projections for the future. That is it. So it is very minimal, and if the financial community likes to get this reported, we definitely can do it, but you see that this is something which is not material for us. We buy more from a technology perspective and not revenue. Marc Geall - Citigroup: Werner, could you clarify then -- let’s say you have an ISV partner that you have signed a global distribution agreement with, which you tend to do before you acquire that business. On that basis, when you recognize the revenues from that deal, would you be recognizing let’s say your 50% share of that? So then, if you then acquired that business, the difference would be, the delta would be going from the 50% to 100% consolidation?

Yes, that is the case. Marc Geall - Citigroup: Okay, and just a very quick follow-up. Is it worth reminding us what the impact of currency, not necessarily just dollar, but maybe also sort of Euro versus sterling? Obviously U.K. had a very strong quarter, and maybe also the Asian currencies have on the business, based from a top-line perspective and from a marginal standpoint?

If you look to the top-line, I think first of all it is important to realize that less than 20% of our software revenue comes from the Euro region. That is very important. Therefore, the translation is only a result from the U.S. dollar/Euro exchange rate, but includes all the other currencies, all the other major currencies. I think it is up to you to simply calculate this impact, if we would end up with a different exchange rate. We gave $1.23 as a basis for our guidance, and that is it. We are not in the currency business, so we can calculate it back and forth. Let’s see where we will stand at the end of the year. Marc Geall - Citigroup: Thank you.

Thank you. Next question, please.

Our next question comes from the line of Johannes Ries. Please state your company name, followed by your question. Johannes Ries - Cominvest: Hello, this is Johannes Ries from Cominvest. Maybe a short question regarding Europe. To my understanding, the closing of the deals which have been pushed out have happened in Europe. Otherwise, can you give us a short update on the business climate in Europe? Has it overall improved? Can we therefore expect maybe some acceleration in Europe going forward? Or has the double-digit growth we have seen in Europe in the long-term was more based on this catch-up effect? Secondly, you talked in the past about a guidance of above 30% operating margin in 2007. Is it still valid? Because you mentioned you are on track with your roadmap, therefore I think maybe you need no additional pushing on deeper next year. Could we believe that? Could you speak to this?

Let me try to give you a quick overview on the business in Europe. As you saw, we had a good quarter in Europe, in particular in the U.K., in Russia, but also in some other parts of Europe. It was good performance across the board. It was not necessarily driven by this or the other deal. It was just simply very good execution. Now, over the medium term, want to be realistic about Europe, we have a reasonably high market share and as we are driving into the mid-markets in Europe as well, we do expect some growth, but I would see the future that our growth locomotives will remain the Americas and Asia-Pacific, but we do expect solid contribution from Europe.

In terms of next year, our ambition is unchanged, that we want to improve margin -- no doubt. We will finally give a guidance as always as to the beginning of next year. The point this year is that we, let’s say have accelerated R&D, and we indicated once we are through the roadmap, that we do not need to accelerate any longer, which is true and which we want to confirm. The only point I want to make is we will bring at the end of the year newer products to the market, as you have heard. The only thing we do not want is to miss growth opportunities. From that point of view, we will see next year what growth opportunities are around this product, and then come up with a mixed guidance margin and growth. Johannes Ries - Cominvest: Thanks. Maybe a follow-up question regarding the growth in the different cost areas. The high growth in R&D on paper is a very low growth say in sales, marketing and SG&A. How much is this sustainable, especially the low growth in sales, marketing and SG&A?

Maybe I can answer. In sales and marketing, these teams are very efficient, but on the other side, as I just said, when we see more growth opportunities beyond what we have today, I think we will start accelerating hiring in the sales area as well. This is one of the opportunities I just mentioned. I think if our sales force is continuing doing that well, it would make a lot of sense to put more feet on the street, just to multiply this. So from that point, it will give us this chance to figure this out at the end of the year, but I agree. This is one of the options, to hire more sales people, yes. From a G&A perspective, I think if you look to the progress we made on the shared service side in Europe, it is going very well. We still have a lot of migrations to accomplish in 2007, but then beyond 2007, we will see the full benefit, so then it is also sustainable.

Thank you. Go to the next question, please.

Our next question comes from the line of Rick Sherlund. Please state your company name, followed by your question. Rick Sherlund - Goldman Sachs: Goldman Sachs. Just to follow-up, the new products that will help drive that revenue growth next year that you may or may not decide you need to accelerate spending on for sales force, the mid-market, I think I heard you mention with a new offering, which I presume you were talking about hosted or on-demand solution. We have BTT, Duet -- can you help us identify what other things will be new for next year that you can drive stronger top-line growth from that may require investment as well?

If you remember what I said at the end, I think as we indicated at the beginning of the year, at the end of 2006, we enter these first customer testing of two things, an expanded mid-market portfolio. I said there is one product which is based on a new implementation of the enterprise services, because it is focused, as you said, mainly on new deployment options, on a different way how we go to market. That is the reason why we needed this different implementation, and you can imagine in those things, there is some innovation embedded, and that gives on the other side, as the uncertainty for us today where and how much we have to invest in order to get growth opportunities or not. We will figure this out in this quarter and let you know at the beginning of next year. Rick Sherlund - Goldman Sachs: Can I follow-up with Leo on the large deal activity? Last quarter we heard about enterprise deals. I am curious. We have heard about a number of large deals in the quarter. How should we think about how much revenue recognition you are getting from these large deals, and how extensive is the enterprise business becoming?

As I said, we have in our portfolio right now, four of these enterprise deals, which have a particular way of being recognized, the agreement. Some of the larger deals that were closed this quarter are not enterprise agreements, and therefore have been recognized in a more traditional way. The portfolio of these enterprise agreements will therefore come into the recognized revenue stream as we move forward. I cannot give you, at this moment in time, any indication of the number of enterprise deals that we expect to sign in the future, but as we already said, in Q2, we do not expect this to be more than a handful or two of these. Rick Sherlund - Goldman Sachs: Can you give us a sense of how much revenue is recognizable on those deals that are not enterprise? Do you have kind of an average number for us?

Rick, I cannot give you an indication here. If you look to the deals above EURO 5 million, and I think that similar metrics are provided in the second quarter. We have order entry in the range of roughly EURO 110 million, and thereof, roughly 65 could be recognized in this given quarter, the third quarter of this year. This gives you the magnitudes, the size of all of these kinds of deals, not limited to the enterprise deals.

Thank you. Go to the next question, please.

Our next question comes from the line of Raimo Lenschow. Please state your company name, followed by your question. Raimo Lenschow - Merrill Lynch: Raimo Lenschow from Merrill Lynch. Henning, just to go back to Rick’s question in terms of the impact that we see from the new products from next year, could you maybe talk us through which are the ones that we think should contribute to next year already? If I know a normal product launch, you usually would start up, or just give it ramp-up customers, as a lot of this stuff is very innovative, I think you would expect a slightly longer ramp-up phase. Are there any of the ones that you mentioned that we should really factor into our model already in 2007, or is that just more of an ’08 story here? Thank you.

Thank you for the clarification. I think today it would be better, let’s say, to factor that more into 2008. You mentioned that we will not have a normal ramp-up. That is the reason why I mentioned alternative deployment models. I think if it is just on premise and it is a normal ramp-up, which is not the case, and there is some embedded IT service in, so from that point of view, it will be a different type of, I would say launching it to the market, but it is this way. We will do it at the beginning carefully, in order to do everything right, and then the rest of -- accordingly where we stand. Raimo Lenschow - Merrill Lynch: Henning, at the moment, I know you are very early stage, which means that you do not really talk in great detail, but for us who talk with the investors, it would be helpful to get some sort of detail. What sort of timeframe can we expect? Is that the fourth of December at the analyst day already, or are we waiting until the beginning of next year to get more clarity?

I think we will continue to give you more clarity. The next date is exactly -- let’s say in December at the analyst day and then the beginning of next year. Raimo Lenschow - Merrill Lynch: Thank you.

Thank you. Next question, please.

Our next question comes from the line of John McPeake. Please state your company name, followed by your question. John McPeake - Prudential: Prudential. Thank you, good quarter. I just have a question, the first one is more short-term and the second one is more long-term. I realize you guys do not forecast currencies and you have a pretty diverse basket of currencies that you translate each quarter, but when you gave your 15% to 17% guidance, it was a different currency level, certainly than it is now. So reiterating that number is different now than it was in January, and I am just wondering first off if your inability or your lack of confidence in hitting the high-end of that number has something to do with the currency basket, and then I just have a follow-up.

No, this has nothing to do with the currency basket. Let me reiterate what we did at the beginning of the year. We gave the $1.23 exchange rate, dollar to Euro, as the basis for our guidance. You will remember that $1.23 exactly refers to the average exchange rate of 2005. But at the end of the day, we had a situation where we talked about if you talk about growth rate, about constant currency growth rates. Now, if the exchange rate is different, of course this will have an impact on our reported numbers, but that is not the reason for the clarification on the guidance. The clarification on the guidance is based on the currency assumptions as I mentioned before, of $1.23 per Euro 1. John McPeake - Prudential: Secondly, over the longer term, what type of growth rate in licenses are you guys comfortable with? What would you be happy delivering over the next three to five years?

We have not given an indication, but whenever we speak to people, it is clear that what we are doing with all these products and all this R&D that our ambition is indeed let’s say to be at a higher growth rate for softer revenues, that point of view. If you look at what we have done in the last three years, as an average, I think we want to be above this, clearly. John McPeake - Prudential: Thank you.

Thank you. Next question, please.

Our next question comes from the line of Michael Briest. Please state your company name, followed by your question. Michael Briest - UBS: Good afternoon. UBS. Henning, in terms of the U.S. business, we have now had a couple of quarters at 20% growth. That is still very impressive but it is down from where it has been. Do you think we are now seeing some deceleration in that business, as anticipated and that is the growth rate we should assume going forward? Then I have another question.

Let me try to answer your question, just to put things into perspective. In the U.S., we had 16 quarters of double-digit growth, which is in itself a record performance that should be applauded. The fact that we start to see slightly declining sequential growth rates is only normal, given the 16 quarters of sequential growth that we had. As you said yourself, at 20%, it is still a very high number. We do expect to see the U.S. also in the future to be one of our growth engines and to help us continue to drive the growth of the company. Michael Briest - UBS: Thank you. In terms of the volume growth you saw in the quarter, you normally give us a gross number of deals signed. Could you give that for direct and indirect deals?

I know we have given you an indication that we have signed 18% more deals in terms of volume. So you see in the third quarter, we have again a lot of volume in deals, but we have also, as Leo indicated, at least for the direct sales in the large enterprises, at a higher average deal size. Michael Briest - UBS: Thank you.

Thank you. Next question, please.

Our next question comes from the line of Matthew Hammond. Please state your company name, followed by your question. Matthew Hammond - Credit Suisse: Thank you, Credit Suisse. Two quick questions. First of all, could you give us a feeling of what you anticipate your online products, both the online CRM and any other online products you are planning, contributing to revenues over the next couple of years? The second question, and I guess it is the one that everyone is itching to ask but everyone is probably too polite, is could you give us some sort of feeling of the difference between what Oracle is saying in terms of the amount of deals they have won against you and the way that you are looking at? Because there is clearly quite some discrepancy.

Thank you. From an online product, we have not given indication because today, I think there is still flexibility in the way, how we model it, the revenues and then the associated costs. You know that has to do with the contract and how you do the on-demand contract, how long, some periods on hosting, et cetera. I would say give us a little time for next year, because as I indicated, we will not stay on CRM only, so therefore, I think these decisions and these questions are key for the future and also for the flow of revenue and from the mix of revenue to expense. So we are working on that and we can give you more indication, I would say, next year. From our friends, I think Leo has a lot of data. I can just say I was asked today several times about the market share gains. I think some of you have made this calculation and the mathematics, must think there is nobody more reliable than independent analysts. So therefore, I can only say take the same figures. What we do is we take our sales figures. We compare it to the Oracle Siebel entity last year, compared to the combined entities this year, then you know that SAP has really gained market share again. What Leo is doing is, if we have some names, we look into our books and records and look if this is really a win or if it is just a name. I think Leo’s team did this very carefully this time. Leo.

Yes, Henning, thank you for giving me this opportunity. We looked at the claim. As you know, Oracle claimed 88 head-to-head wins against SAP. They only identified certain names of those, which we of course proceeded to analyze in detail. Let me give you the detail of that analysis. We chose not to compete on one of these deals. Six were not competitive situations, and all occurred before Q107 of August quarter, first quarter. Twelve of them we have no record on, so I cannot comment because we did not compete. We were not in the game. Seven were not a win against us. They must have counted some other wins. Four were indeed losses for us, so they did win four against us. Just to put things into perspective, in this quarter, we had 247 competitive head-to-head against Oracle, of which we won 209. That is an 85% win rate. Matthew Hammond - Credit Suisse: Thank you. Could I just add one follow-up question? I guess people have been pushing on this already, but the 30% margin for next year. There seems to be I think a little bit of nervousness out there that you guys might seem to be ducking that medium-term target that you set a long time ago. Am I right in reading this, that if you do not do the 30% margin, it is only because you are going off to higher license growth? Is that the correct way to look at it?

That is exactly the way to look to it. I think what we said is because we have some opportunities, this was a product, I think we have to be extremely clear at the end of the year what mix of KPIs we are given. You know that is something I reiterate all the time. We want to go for higher margin, but if we see, let’s say growth opportunities, I believe it is better first to take the growth opportunities and then go for the efficiency. But that is too early to say. I just want to caution in a way that if we see an opportunity, I think it would be wrong to trust because let’s say we gave here one figure, that we are boxed into this one figure and have no chance to do the best for the company and our shareholders.

Thank you. Next question, please.

Our next question comes from the line of Gary Rollo. Please state your company name, followed by your question. Gary Rollo - Morgan Stanley Dean Witter: Hi, everybody. It is Gary Rollo from Morgan Stanley. I think the big message from a product side this quarter was the launch of ERP ’05. I am wondering how the reception to that product has been from customers and what you are learning as you go out and talk to them and explain that the ERP ’05 platform is the one to go to? Maybe give me some feedback on how you think the adoption there will turn out.

Thank you. In this case, we have very good feedback, because we had the chance, first of all, I was a keynote speaker at the German user group just recently, and we had the American user group here in Walldorf for support in the short-term. I was personally able to speak with two user groups representing more than 50% of our customers. I can just tell you that both of them like very much and appreciate what SAP is doing. What was I think key at the end was that we combined with the announcement that ERP 2005 is the stepping stone to enterprise SOA. This following the announcement that because it further enabled, it is so flexible that now we can give accelerated innovations with enhancement packages, which have enterprise services, composites and others. This is what the customers really like because they get optional continuous innovation without the pain of a heavy upgrade. Giving this message in addition, I think, has brought a lot of confidence to the market and that is why we -- Gary Rollo - Morgan Stanley Dean Witter: Is there any correlation we can think about between you to go out and reinforce that message with customers and the way that sales and marketing costs are tracking? Normally when you go out with a strong message about product, it is fairly heavily backed with marketing costs, but we are not seeing that.

In this case, it is unnecessary because this is a well-known and accepted product in the market. It is more the collection of our clients. It is ERP 2005 is the right thing to move because everybody is ready to move, or will there be an ERP 2006 or 7, which is another heavy uplift. Now, where we can confirm that not necessarily they get the innovation they want, but there is not another heavy uplift right there in the near future. I think they feel comfortable and they know that we have a good reliability amongst our customer base, so I think there is some trust. I believe you do not need marketing. It was just a combination of this message and now, our customer base starts moving.

We have time for one final question.

Our next question comes from the line of Adam Shepherd. Adam Shepherd - BNP Paribas: It is Adam Shepherd, BNP Paribas. I just wanted to come back to this year. I just noticed there was some hesitancy in your outlook, despite the fact you seem to have closed all of your slip deals, despite the fact there is no change you said, in the environment. I wonder why then you took the time to actually point us towards the mid- to low-end of the range, despite giving obviously a degree of guidance in the second quarter?

I think what we did is now, coming to the end of the year, is as always we wanted to be as precise as possible. As we said, we have reaffirmed our guidance because everything is possible, but on the other side, you know how it is. In all the meetings, you will ask us and all your colleagues will ask us about how we feel about, where it could be and not could be, and I think it is fair to give this sentiment we have today publicly. So we reaffirm the guidance but let’s say it is less likely we achieve the upper end. Adam Shepherd - BNP Paribas: Just a follow-up on that, some of your partners were talking to two things, actually, in the U.K. One, a reorganization that you had in the second quarter. Also, some central government deals and some slippage there. I wonder if that is giving you a degree of hesitancy, particularly the deal slippage in Q4. Is there any chance that some of these deals will get pushed out into 2007?

Let me just clarify two things. First of all, we did not have a reorganization in Q2. That is misinformation. We actually had a global European reorganization in the very beginning of Q1. So there is no correlation between that and the results in the U.K. in this or the other quarter. Actually, the U.K. had a very good Q3. You know that we depend less on public sector deals in the U.K. than in some of our competition. We are, even though we are gaining traction and there is absolutely no reason to believe that this or the other deal that is scheduled for Q4 is slipping into Q1. That is not even speculation. Adam Shepherd - BNP Paribas: Thank you. Just finally, on the mySAP ERP 2005, just to clarify, are you expecting to see more of the up-take come through into 2008, or do you think that is actually going to have a positive impact into 2007 as well?

No, I think we will talk about ERP 2005 and that evolving into business process platforms, that has an impact the beginning of next year. I was earlier asked about another product. Adam Shepherd - BNP Paribas: Thanks very much.

Thank you very much. This concludes the SAP Q3 earnings call today. Thank you all for joining us and goodbye.

Ladies and gentlemen, that does conclude our conference for today. We do thank you for your participation. You may now disconnect.