Stefan Gruber - VP, IR Werner Brandt - CFO Henning Kagermann - CEO Léo Apotheker - Deputy CEO and President, Global CustomerSolutions & Operations

Raimo Lenschow - Merrill Lynch Marc Geall - Citi Sarah Friar - Goldman Sachs Charles Di Bona - SanfordBernstein James Clark - Credit Suisse James Dawson - Morgan Stanley Ross MacMillan - Jefferies Michael Briest - UBS Knut Woller - UniCredit

Welcome to SAP's Third Quarter Results Conference Call. Thiscall is being recorded. Today’s call will be hosted by Henning Kagermann,Werner Brandt, and Léo Apotheker. I would now turn the call over to StefanGruber. Please go ahead, sir.

Yeah. Thank you. Good morning or good afternoon. This isStefan Gruber. Thank you for joining us to discuss SAP’s third quarter 2007results. I am joined here in Walldorf by Henning Kagermann, Léo Apotheker andWerner Brandt. Werner will discuss the Q3 financials in detail, Léo willcomment on the current business environment and our regional performance, andHenning will then provide some further in-depth commentary on the quarter andSAP’s product successes. As usual, I will now make a few remarks about forward-lookingstatements. Any statements made during this call that are not historical factsare forward-looking statements as defined in the US Private Securities LitigationReform 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 toidentify such forward-looking statements. SAP undertakes no obligation topublicly update or revise any forward-looking statements. All forward-lookingstatements are subject to various risks and uncertainties that could causeactual results to differ materially from expectations. The factors that couldaffect SAP’s future financial results are discussed more fully in SAP’s filingswith the US Securities and Exchange Commission, including SAP’s Annual Reporton Form 20-F for 2006 filed with the SEC on April 3, 2007. Participants of the call are cautioned not to place unduereliance on these forward-looking statements, which speak only as of theirdates. In addition, in this call, we will report certain financial measuresparticularly free cash flow, constant currency, period-over-period changes inrevenues and operating expenses and approximations of revenue growth on US dollarbasis that are not prepared in accordance with US GAAP, and are thereforeconsidered non-GAAP measures. We report these measures to provide additional informationthat may be useful to investors in breaking down and evaluating sales volumeand income growth. Our non-GAAP measures may not correspond to non-GAAPmeasures that other companies report. The non-GAAP measures that we reportshould only be considered as additional to and not as substitute for orsuperior to the respected US GAAP measures that we report. Before we start, let me remind you that the focus of today’scall is on SAP’s Q3 results and our outlook for the full year of 2007. Also, Iwould like to remind you of our upcoming investor symposium, which will be heldon Monday, November 12th at our headquarters in Walldorf, Germany, andinvitations for this event will be sent shortly. Now, I would like to turn the call over to Werner Brandt.

Yeah. Thank you, Stefan, for this introduction, and welcometo everybody on the call. We are very pleased to report another strong quarter,in which software and software related service revenues grew 16% at constantcurrencies. Let me take a moment to discuss the year-over-year change inexchange rates. The euro continued to strengthen significantly against most ofthe major currencies causing a currency headwind for SAP. Here are some keycurrency metrics. If you look to the relation of the euro to the US dollar,the euro strengthened by 8% quarter-over-quarter. The euro strengthened relativeto the yen 9% quarter-over-quarter, and the Canadian dollar weakened by 1%compared to the third quarter of 2006. Currency had the following impact on the P&L in thethird quarter: A negative effect of 3 percentage points on software andsoftware related service revenues; a negative effect of 4 percentage points ontotal revenues; positive effect of 3 percentage points on operating expenses,resulting in a negative impact on operating income by 5 percentage points. Theoperating margin was negatively impacted by 40 basis points in the thirdquarter. Let me now continue with the quarter's results. Software and software related service revenue for the thirdquarter of 2007 were over EUR1.7 billion, which represented a year-over-yearincrease of 16% at constant currencies. The increase was the result of theyear-over-year constant currency increases of 15% in software revenues, 16% insupport revenues, and 31% in subscription and other software related servicerevenues. Of the latter, we signed one subscription deal on GEAcontract in the third quarter. As we mentioned previously, for the full year2007, we expect subscription and other software related service revenues to bein the range of approximately 2% to 4% of software and software related servicerevenues. Third quarter support revenues of EUR978 million, increased16% at constant currencies year-over-year, and were subsequently in line withour expectations. Third quarter professional services and other servicerevenues were EUR674 million, which was an increase of 6% at constant currency.Consulting revenues of EUR544 million, increased 4% at constant currencies, andtraining revenues increased 15% at constant currencies. The software and software related service margin was 80.8%for the third quarter of 2007, which was a decrease of 180 basis pointscompared to the third quarter of last year. This decrease in the margin was aresult of several factors: An increase in purchase licenses mainly driven by anincrease in the amortization of acquired intellectual property and increasingcost of support due to additional headcount for our premium maintenancebusiness and an increase in costs related to the new business, which aloneaccounted for a decrease of 50 basis points. The professional services margin was 25.5% for the thirdquarter, which is an increase of 180 basis points compared to the same quarterlast year. As we had previously mentioned throughout the year, our goal was toimprove the professional service margin to 25%, and we are on track to achievethis objective. The increase in the professional service margin was mainly theresult of a higher consulting margin particularly in the Americas and EMEA, and asignificant increase in the training margin. As a result of the mixed margin performance in product andservices, our 2007 third quarter gross margin increased by 30 basis points to65.4%. Operating expenses increased by 156 million to EUR1.8 billion, up 9%year-over-year. The higher operating expenses were mainly the result of additionalpersonnel. We hired 4304 FTEs since the third quarter of last year. For information, stock-based compensation expenses andacquisition related charges were 38 million and 18 million respectively for thethird quarter of 2007. R&D expenses increased 8% for the third quarter, andrepresented 15% of total revenues compared to 15% of total revenues for thethird quarter of last year. The increase in R&D was the result ofadditional personnel We hired an additional 875 FTEs compared to last year’squarter. Of that total, 66% were hired in low-cost locations. Sales andmarketing expenses increased 14% for the third quarter, and represented 21% oftotal revenues compared to 20% of total revenues in the last year’s thirdquarter. The increase in sales and marketing expenses was mainly due toadditional sales headcount year-over-year, more than 1100. General and administrative expenses increased 8% for thethird quarter and represented 5% of total revenues, the same as the prioryear’s third quarter. The increase in G&A is driven by a continuedinvestment in our transactional shared service centers, growth inadministrative functions due to acquisitions and additional resources needed tomanage the volume increase in the regions. We expect a more positive effect inG&A ratio in the mid-term. Operating income was 601 million for the third quarter,representing an increase of 9% compared to the third quarter of 2006. Theoperating margin for the third quarter was 24.8%, which was flat compared tothe same period last year. At the beginning of the year, we spoke about acceleratedinvestment for our new business centered around our new midmarket solution SAPBusiness ByDesign. We stated that we would keep you posted on the specificspending to this initiative. Therefore, operating expenses related to the newbusiness for the third quarter totaled approximately EUR35 million. To-date, we have spent roughly EUR85 million, and excludingthis investment, our operating margin would be 150 basis points higher in thethird quarter and 120 basis points higher for the first nine months. Thirdquarter 2007 net income rose 10% to 408 million, and earnings per shareincreased 13% to EUR0.34. Our effective tax rate for the third quarter was 35.3%compared to 35% for the quarter of last year. For the full year, we continuedto expect a tax rate of 32.5% to 33%. Free cash flow for the nine months periodof 2007 was EUR1.1 billion, which was flat year-over-year. For the thirdquarter of 2007, primary use of free cash flow was for share buybacks,acquisitions and the investment in corporate bonds. For the third quarter, we bought back 6.2 million shares fora total of approximately EUR250 million. At September 30, 2007, treasury stock stood at 42million shares, which included the cancellation of 23 million shares fromtreasury, as announced by SAP Executive Board on September 7, 2007. So the 42 million is after the cancellation of this 23million shares. For the fourth quarter of 2007, we expect to spend roughly thesame amount on share repurchases that we spent for the third quarter, so againaround roughly EUR250 million. For the year, that would come to a total ofapproximately EUR1 billion in share repurchases. Headcount in the third quarter increased by 853 FTEs, ofwhich 47% were hired in low-cost locations. At the end of the third quarter,total headcount stood at 42,772 full time equivalents, which is an increase of4,000 -- of 3,417 year-to-date. This includes 353 FTEs coming fromacquisitions. For the full year, we are now targeting 4,000 additional FTEs,not including headcount coming via acquisitions. We have refined our outlook for 2007. As you already haveseen in our press release issued today, we indicated that we now expect growthin software and software related service revenues to increase at the upper endof the range of 12 to 14%. With that in mind, you maybe asking why we did notrefine our margin outlook as well? Let me explain. Number one, our operating margin guidance is not currencyadjusted in contrast to the guidance for software and software related servicerevenues. The currency impact to the operating margin for the first nine monthswas a negative 40 basis points. Moreover, we would expect much larger currencyimpact on the operating margin in the fourth quarter resulting from a greatermismatch between revenues and operating costs compared to the first ninemonths. Number two, we need to keep some flexibility for spending onSAP’s Business ByDesign, as we have begun to enter operational mode for the newbusiness and as we get closer to volume readiness in 2008. Besides the newbusiness, we continue to invest in the future growth of our establishedbusiness and this requires additional risks. As you see, we raised ourexpectation for headcount this year from 3,500 to 4,000, excluding acquisition. With that I would now like to pass it over to Léo. Léo Apotheker: Thank you, Werner. And I am pleased, you can all join ustoday on this call. The market environment in the third quarter remainedunchanged, as we report our 15th consecutive quarter of double-digit growth insoftware and software related services. We continue to see consistent demandfor our products and services. This consistency comes from our ability toprovide true value to the businesses of our customers. The key sources of thisvalue are our superior products and technology, our industry leadinginnovation, as well as the safety and reliability of our customers’ investmentsin SAP products. The strong financial results we have consistently reportedare proof of our ability to provide superior value to our customers. Ourleading solution portfolio, in combination with our value driven go-to-marketapproach, enables us to maintain a high win rate against our competitors. Letme now provide you with some customer metrics for the third quarter. In the third quarter, the number of contracts signedincreased 22% year-over-year, the share of new customers based on order entrywas 26%, but as we continue to sign more deals with midmarket customers, it isalso important to talk about the share of new customers based on number ofcontracts, which was 34%. Deals greater than EUR5 million accounted for 20% oforder entry in the third quarter, down from 33% in the third quarter last year;while deals less than EUR1 million accounted for 46% of order entry, up from36% in third quarter of last year. The higher percentage of deals greater than 5 million in the2006 third quarter was the result of an unusual high number of deals in the 10to EUR20 million range. The 20% number, we reported for the third quarter ofthis year is more typical for SAP, if you compare it to the past couple ofyears. I would like to highlight two very important customers thatwe won in the third quarter. I am very pleased that we can announce today thesuccessful signing of a Global Enterprise Agreement with Apple. SAP had alreadybeen a software partner for Apple in the past. However with this GEA, we willbring the relationship to a completely new and strategic level. I am also pleased to announce that in the third quarter wewon Wal-Mart, the largest retail company in the world. This is a significantcompetitive win for SAP in the US,and in the retail sector, which clearly shows our leading position and superiorvalue proportion in the strategic industry. A decisive factor in Wal-Martdecision for SAP was not only our ability to prove that the SAP solution canbest support their business today, but that it also provides unsurpassedadaptability and flexibility for future growth. We continue to maintain our strength and market leadershipwith an unmatched portfolio of 26 end-to-end industry solutions. Our marketingleading position in these industries is derived from many years of experience,in-depth industry expertise, and strong long-term customer relationships, thelatter being something you can definitely not buy into. Based on software and software related services revenues,the top performing verticals in the third quarter were oil and gas, automotive,consumer products, retail, and financial services. Our success in banking isthe result of the investments we made in the business process platform forbanking, which allows us to grow organically and through co-innovation withpartners. A couple of the announcements we made in the third quarterinclude a partnership with Callataÿ & Wouters to offer an end-to-end corebanking solutions for midsize banks, and the partnership with Misys to createan integrated universal banking solution. Both partners will migrate their solutionsover time on to our banking platforms. Let’s now take a look at the regional performance. We onceagain reported double-digit growth rates in all regions based on software andsoftware related services revenues at constant currencies. Software and softwarerelated service revenues in EMEA were up 15% at constant currencies. Germany’sgrowth of 3% was within our expectation, driven predominantly by SME, but therest of EMEA maintained its second quarter momentum by growing 22% at constantcurrencies. EMEA software revenues at constant currencies were also up15%. The performance in EMEA was well-balanced across all the countries. Thestandouts that I would like to point to were once again Russia, as well as Franceand UK.Also SME was again a strong contributor and growth driver for EMEA in thequarter. Key contract wins in the EMEA region were Barmer Ersatzkasse, ThamesWater Utilities Limited, [Inscate] Management, Louis Vuitton Moët Hennessy andEl Corte Inglés in Spain. The Americasregion reported another strong quarter, with 15% growth in software andsoftware related service revenues at constant currencies. The US grew 18% at constant currencies, while therest of Americaswas 6% higher. The performance in the rest of Americaswas actually better than the growth rate indicates, as you’ll remember, we hadan exceptional performance in Latin America inQ3, 2006, making for a very tough comparison. Based on software revenues at constant currencies, the Americaswas up 11%. Key contract wins in the Americasregion included Southwest Airlines, Goodyear Tire & Rubber Company, theRoyal Bank of Canada, Miami-Dade CountyPublic Schools, [Elektro] ServicesCompany and Bancolombia S.A.The strong growth in Asia-Pacific/Japan continued into the third quarter withsoftware and software related service revenues increasing 24% at constantcurrencies. Japanwas up 16% at constant currencies, and the rest of the Asia-Pacific/Japanregion reported 30% growth at constant currencies. Based on software revenuesat constant currencies, Asia-Pacific/Japan was up 28%. The key growth marketsin APJ were India and Japan.A stronger leadership team, solid execution, and an unwavering commitment tocustomer value have been the driving forces in Japan’s turnaround. Key contractwins in the Asia-Pacific region were Samsung SDS, Charmant Inc., Ayoka Systems,KAO Corporation, LIG Insurance, and Myer Pty Limited in Australia. Let me conclude by saying that our 2007 outlook for softwareand software related service revenues implies that we closed as much businessin the fourth quarter as our next largest competitor does in a whole year.Having said this, I would now like to pass it over to Henning.

Yeah. Thank you, Léo. I am pleased to report another strongwell-balanced quarter in which we continued to gain share in the coreenterprise application software market. At the end of the third quarter, ourshare based on this US$35.9 billion market was 27%, representing an increase of1 percentage point compared to the second quarter of 2007, and an increase of3.5 percentage points compared to the third quarter of 2006. As you know, we do not report our numbers in US dollars, andwe have not made detailed calculations about how our performance would be if wewere reporting in US dollars. But based on an approximate calculation, webelieve that our growth in the third quarter in software and software relatedservices revenues would be above 20% year-over-year on a US dollar basis. As you know, we have been working hard and have been quitesuccessful to-date in getting an increasing number of customers to transitionto enterprise SOA by adopting the business process platform. We have the onlyERP suite in the industry that is services-enabled, and we remain on track inour roadmap to have the entire business suite and all industry solutionsservices-enabled by the end of this year. In the third quarter, we continued to see strong adoption ofSAP ERP and SAP NetWeaver increasing NetWeaver sales and continued contract migrationfrom our suite. These critical metrics help us track the progress of ourbusiness process platform success. In the third quarter, we had 11,200 SAP ERPcustomers, of which 6,800 were productive. We also saw an additional 142 R/3contract migrations. The growth in contract migrations has declined somewhat asexpected, but it was more than compensated for by an increase in new additionalrepurchases. The number of NetWeaver customers increased to 14,400, with 9,800of them being productive. NetWeaver sales for the nine months period wereEUR585 million representing an increase of 42% compared to the same period of2006. Of the total, 34% represented standalone NetWeaver sales. Additional progress on the transition to enterprise SOA canbe demonstrated by some of the recent announcements we made. We announced thenewest version of SAP Discovery System. First launched in 2006, the systemprovides companies with the opportunity to experiment with enterprise SOA, byprototyping service-enabled composite applications specific to their businesswithout disrupting existing productive systems. More than 400 companies have taken advantage of the systemin just 12 months. We also announced a global release of the SAP NetWeaverComposition Environment and enterprise services repository. Our ecosystem which is critical to the success of enterpriseSOA continued to be strengthened by the success of the SAP communities, whichwere featured at our recent TechEd event, where more than 6,000 peopleattended. Our industry-wide networks, which help identified industry-widetrends has grown to 13. Our enterprise services communities translates concepts intoenterprise services has increased to over 240 members. Our business processexpert community which helps close the gap between business and IT has grown toover 200,000 members, and our SAP developer network which helps optimize ITassets in the central community has increased to over 900,000 members. Allthese numbers of SAP community member and networks represent significant gainsyear-over-year. On the product side for our established business we continueto move forward with new innovations. For the SAP business suite, we recentlyreleased the second enhancement package for SAP ERP, which includes newenterprise service bundles, improvement to the core applications within SAPERP, and specific industry related innovations. For the business user, GRC RiskManagement entered ramp up in the third quarter. CFOs can use this application to develop a comprehensiverisk profile for the organization, establish the corporate appetite for risktaking, and outline response strategies for loss events. For the small andmidsize enterprise segment, the number of customers for SAP Business Oneincreased 39% year-over-year to a total of 15,830. The number of channelpartners for SAP Business One decreased slightly to 1,343. The decline is theresult of a strict focus on our most active partners that are the most capablein helping us in our drive to meet volume targets. Therefore, it’s only natural that growth in the SAP BusinessOne partner channel slows. For SAP All-in-One, the number of customers grew by18% to 10,555, and the number of channel partners increased 23% to 1,107. Asyou know, we launched in September the branding of our new breakthroughinnovation product, Business ByDesign. In a nutshell, SAP Business ByDesign isthe right solution for midsize companies with 100 to 500 employees, who arefocused on improving core business processes with a low cost of entry and a lowtotal cost of ownership and who are interested in an on-demand solution. The solution combines the benefits of integrated end-to-endbusiness applications with low risk and low total cost of ownership of anon-demand solution. It wasn’t designed with traditional categories, such asenterprise resource planning, customer relationship management, and others inmind. It was designed for business processes across the entire organization,whose user interface was tailored to people's [routes]. SAP Business ByDesignoffers end-to-end processes for the workplace of the future. Finally, let me reiterate our growth strategy. Our plan isto continue to grow faster than the market, and we expect the growth to come byexpanding our addressable market, and our coverage of that addressable market.Stable growth will come from our traditional business of horizontal andvertical applications, and accelerated growth will come from leveraging thesegments of the business process platform, the SME and the business user. For the business process platform, we will see primarilyorganic growth. In SME, organic growth is also the key driver, but as you knowwe did make an acquisition in the past namely TopManage that brought us SAPBusiness One. The business user segment is where acquisitions along withorganic growth play a bigger role in our strategy. As you can see by the recent small acquisitions ofOutlookSoft and Pilot Software, and the recent large offer for BusinessObjects, and while the offer for Business Objects is for a much largeracquisitions than we have done in the past, the concept behind this acquisitionremains the same, enabling our customers to benefit from an even richerportfolio of innovative products and solutions. It’s not about acquiring customers, market share ormaintenance. With the acquisition of Business Objects, we instantly become themarket leader in a high growth area that we were not the leader in previously.SAP’s direction has always been clear delivering innovative and market leadingproducts to our customers and profitable growth to our shareholders. In theend, our 2010 ambitions will be reached primarily through organic growth asorganic growth remains the primary driver for growing of our businesses. SAPhas shown that we can outperform the market with significant organic growth,and we will continue to do so. Thank you, and we will now be happy to take your questions.

Thank you, sir. (Operator Instructions). Thank you. Our first question comes from Mr. RaimoLenschow of Merrill Lynch. Please, go ahead. Raimo Lenschow -Merrill Lynch: Hey, hello, good afternoon. I’m sorry I have to apologizebefore I ask the question, but as I am a bit of a number cruncher andnerd. Could we maybe talk a little bitabout the growth rates in the USbusiness? If I look at last year we had a very healthy [escrow] and we had toadjust it down then with the accounting adjustment we announced in January. So,if I then look at the organic clean growth rate we achieved in the US or in the Americas business that looks likewe had pretty much the second quarter of single-digit license growth in US. Canwe maybe talk a little bit about the reasons there? Is that market driven? Is that because youactually guided the sales force on kind of the slightly lower-based growthnumbers, so they are actually quite happy with the double-digit they achieved.Maybe some more color on that? Thanks.

Maybe, I would just reiterate what we did. You are right, wehad reduction in our license revenues for the third quarter by about EUR30million and, but it didn’t impact the value of licenses sold in US. And westated that we expect to restate a portion of that, which we did in the firstquarter, it was about 19 million. I think, we don’t expect to recover anyfurther amount of that. So, that does effect behind and I think if we look tothe USI feel business is still strong there, Leo. Léo Apotheker: Yes, maybe I can add a few comments to that. If you look atthe situation in US, the environment is rather unchanged compared to the secondquarter. We are performing well relative to the competition in US, and we docontinue to take market share. And if you re-look at metrics then we continueto have nice double-digit growth in US moving forward. I don’t expect the US to be the number one growth engine for SAPfor the entire year, but I do expect the US to continue to growdouble-digit. Raimo Lenschow -Merrill Lynch: Thank you.

Thank you. We will take the next question please.

Thanks. The next question comes from Mr. Marc Geall of Citi.Please, go ahead. Marc Geall - Citi: Hi, good afternoon everyone. A couple of questions, if Imay. Can you sort of go into a little bit more detail, into sort of how the 85million Business ByDesign spend how that breaks down, sort of more interestedin from a sales and marketing standpoint on where you are. Then a comment on(inaudible) you are sort of going up into ramp up and its operational now. So Ijust want to understand how that profile maybe builds out. And then a secondquestion, just on the acquisition announced yesterday of YASU Technologies, howdoes that effect things like your relationship with IDS Scheer? How strategic could that be, am I missing somethingin the BPM space, that’s clearly important, I just really want to understandhow that product would fit into the NetWeaver strategy?

--: We have to launch this in different phases as we all knowit. It was a very important milestone to having the first client live which weachieved in September and it was just 20 live clients. The next one is end ofthe year. We want now to come to the hundred plus clients. This is importantbecause in the first quarter there will also be an upgrade of the software sowe learn to seamless upgrade on the fly. Then we come to next year firstquarter is to push the product that it can run, I would say in thousands in termsof performance and we will over the year improve cost of ownership. On the go-to-market side it’s clear that we then ramp upmore and more our marketing, our telemarketing, our internet sales. We measurevery carefully how much cost is involved in making a customer productive, thatgoes down. We will see first up-sell into existing clients. We expect them tomove up with the users. So, at the end of the day it’s still the same plan thatat the end of 2008, we expect that we have a business plan. Well, we can makethis business profitable as we announced earlier. Léo Apotheker: Yes. You will remember that in New York we announced our next phases, toillustrate this with one example, we are now opening for business in twoadditional countries, ramping up country-after-country. We are also ramping upcertain number of marketing and sales expenses to prepare for the launch of theproduct in these countries.

Some figures related to what you had before, if you look tosales and marketing including our own volume business readiness internally,then we are talking about roughly $44 million, on the $18 million and the rest,bit more than $20 million is related for charges of existing consulting andother support activities. Marc Geall - Citi: So are you saying that $20 million, should we think of thatas more CapEx related cost or is it still...?

No, no this is, nothing is CapEx related. Marc Geall - Citi: Okay.

Its CapEx based. But we are talking about actual cost here. Marc Geall - Citi: But, if we take a look at the CapEx that you’ve sort oftaken through this year, would any of that also be associated with the BusinessByDesign ramp up?

Yes, it is. It is. Marc Geall - Citi: And, now are you able to...

On the hardware side. Marc Geall - Citi: Yeah. Are you able to give any indication? I’m just tryingto get a feel for as we look at CapEx going into ‘08 ...?

Look to the CapEx spending it is roughly $240 million and Iwould say hardware related is roughly $80 million for the first nine months, sothat’s not a huge investment we have done here. It’s more really expenserelated what we are talking about. Marc Geall - Citi: Okay, thank you.

Let’s take the next question please.

Thank you. Our next question comes from Ms. Sarah Friar ofGoldman Sachs. Please, go ahead with your question. Sarah Friar - GoldmanSachs: Good afternoon everyone. Henning, I think you have tried tobe very explicit about your acquisition strategy both on this call and on thecall last week with Business Objects and in particular, where you are morefocused on inorganic growth from where you prepare to go organically. I thinkof NetWeaver as an area that’s much more organic growth, but does the Oraclebid for BEA change your thinking at all here and in particular does it forceyou to perhaps have to add more technology tuck-in acquisitions, the speed andtime to market for that platform?

Yeah, thank you. That is a good question. Let me reiterate,we are pretty happy with our business process platform because it’s to someextent, unique in a market, you know we are not growing for pure technologyplatform but we bundle, executable services and making it a more applicationtype platform. To give you some flavor in addition to what I did already, wehad, at TechEd yesterday, I gave a key note and so we add per month now 900productive NetWeaver systems per month. What it tells you is that there is a hugereduction weight, the system is well underway. --: Sarah Friar - GoldmanSachs: Got it. And then I just want to follow-up on themacro-environment. You did call out financial institutions as a vertical ofstrength, but obviously what we see going on here in the US, is definitely financial pushingout some deals third quarter into fourth quarter, and some concerned broadlyabout their spending. Could you give us anymore color on what you sawparticularly in the USfinancials vertical? Léo Apotheker: Yes, hello Sarah. We have been progressing steadily ourfinancial services business, and again in Q3 we had good results in financialservices. Now, we are also doing business in North Americawith financial institutions, and we have not yet seen any impact of the turmoilin the financial industries in Q3. I guess that’s because we don’t have aconfusing strategy. Sarah Friar - GoldmanSachs: Okay, great. Thanks a lot Léo.

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

Thank you. Our next question comes from Mr. Charles Di Bonaof Sanford Bernstein. Please, go ahead with your question. Charles Di Bona - Sanford Bernstein: Yeah, Henning thanks very much for the milestones that yougave us on Business ByDesign, but could we maybe take a moment to map that backto the projected spending? When you are almost halfway through the sort of twoyear cycle of 3 to EUR400 million, wondering if maybe you can refine thatrange, and maybe to the extent that you are also with Business Objects,acquiring a channel to the middle market, or at least a number of channelpartners as they are already developed. Does that impact the spending? Does that impact the timing of the spending? Can you maybe comment on that a little bit?

Yeah, thank you. You are right there is a level which we canget from Business Objects, they have a very strong channel. Also some of theirproducts would fit nicely into the Business ByDesign offering. You canunderstand that I don’t want to speculate now we have just made an offer. Wehave not closed the deal. We cannot dig too deep into the technology for fewreasons. So, but you are right, this is an opportunity for, let’s say takingsome of the investments out, we planned on our site. Let’s see next year whenwe, let’s say come closer here. --: Charles Di Bona - Sanford Bernstein: Can I just interpret that then to be, that you are certainlywith the initial customers because of the cost ownership you are going to beessentially subsidizing the purchases?

Not subsidizing, but at the end of the day, if it’s too lownumber of users, at the beginning you don’t make money, you are right. Once weget the up selling effect, we start making money and the question is now, wehave two impacts, one is the time to get the up-sell and the second, is howfast are we improving our internal TCO. We are working on both. Charles Di Bona - Sanford Bernstein: Thank you.

Thank you. Next question please.

Thank you. Our next question comes from Mr. James Clark withCredit Suisse. Please, go ahead sir. James Clark - CreditSuisse: Good afternoon gentlemen. I have a couple of questions.First if I could ask about the R/3 migration. And again, thank you for givingsome of the basic points there. And you made some deceleration in the number ofcustomers moving up from R/3 but how many customers on your analysis remain onthat platform that could potentially move on to your newer technologies?

Yes, thank you. First, let me say I’m happy about this lowfigure because it was sometime ago concerns in the analyst community that oncethe migration is gone SAP cannot sustain with the growth and the opposite ishappening. I think people have to have in mind, with the refined guidance from[Walnar], we will end up this year with the highest growth in four years, justto remind you, and the migration is very low. So it tells that we successfullycan substitute the migration we had three years ago by additional sales of newproducts and new customers, that was the reason why I am happy if the number isnot too high. I think we have left a few thousand as we contract. I expectedthat in 2009 we will have less than 1,000 but let’s say that still is the case. James Clark - CreditSuisse: Thank you very much. The other question is a technical onefor Werner. Could you give us a breakdown of your costs by functional currency,so that we can perhaps model more accurately the currency impact on your costbase going forward?

James, the functional currency of SAP is euro and this isacross all top-line and all operating expense lines. I do not understandexactly what you are looking for? James Clark - CreditSuisse: Well, your functional cost therefore is euro, but in thecompany operations clearly there is a mismatch between your costs in localcurrency and your revenues in local currency which as you highlighted, has costyou 40 basis points so far this year. And you hinted that, that would besignificantly greater drag on margins in the fourth quarter. Could you a)quantify that without giving away your fourth quarter margin ambition, butequally give us a sense of the percentage of your cost in dollars, in Yen and perhapsin other currencies that you feel you are sensitive to?

Yeah, that’s something we do not disclose, but the majorityif you look to it, is related to the US dollar. That’s something we can say. James Clark - CreditSuisse: And your fourth quarter margin drag at current rates?

No, we do no disclose this. James Clark - CreditSuisse: But they’re significantly higher than the 40 basis points sofar this year?

It will be higher. James Clark - CreditSuisse: Okay, thank you.

Thank you. Let’s take the next question.

Thank you. Our next question comes from Mr. [PatrickStandaert] of Morgan Stanley. Please, go ahead with your question. James Dawson - MorganStanley: --: Léo Apotheker: Let me start with Germany so we get that out of theway. Germany has ayear-to-date performance in mid single-digits which is as we expect, as wealways said, that we expect Germanyto be in the mid single-digits. And the third quarter was again single-digit.We see a mixed change in the business we do in Germany. We do a little bit moreSME, little bit less large enterprise which is to be expected given our veryhigh market share here in Germany.So, you should expect Germanyto stay at single-digit. We have always indicated that would be the case, andwe expect that to continue to be the case. : --: James Dawson - MorganStanley: Thank you very much. Léo Apotheker: Thank you.

Thank you. Next question please?

Thank you. Our next question comes from Mr. Ross MacMillanof Jefferies. Please, go ahead sir. Ross MacMillan -Jefferies: Yeah, thank you. Just on the guidance, so we have grown on acost and currency basis by 16% on software and software related revenues forthe first nine months of the year, you have raised the guidance to the high endof the range, that still implies a pretty significant deceleration in Q4 especiallyon license revenue. Can you just outline maybe your thinking around that andwhether you think this year is going to be even less seasonal than we have seenover recent years? Thanks.

You know that we always give the guidance for the year and Iwant to reiterate that this is important. We are not giving guidance for thequarters and I think people should not look, let’s say to the environment fromSAP’s performance quarter-over-quarter. Let me reiterate we feel Q4 is an extremelylarge one. With our refined guidance again we would grow more than in the lastthree years, so it’s really an ambitious target and I think let’s first make itand then let’s discuss again about the year.

Thank you very much. Let’s take the next question please.

Thank you. The next question comes from Mr. Michael Briestof UBS. Please, go ahead. Michael Briest - UBS: Thank you very much. In terms of the hiring target you havenow listed that to 4,000 for the year, can you say where the extra 500 peoplewill be going and by implication is this a sign of confidence on 2008 outlook?Should we expect hiring to moderate in 2008 as a consequence?

It’s Werner here. Michael I think the accelerated hiringthis year will be in the areas of sales and marketing and R&D. Asthroughout the first nine months of this year, and with regard to 2008 ,that’ssomething we will talk about when we provide our guidance for 2008 that’s bythe end of January next year. Michael Briest - UBS: Thank you. And if I could just have one more, in terms ofyour ability or willingness to do large deals, you have obviously flagged thatin the business user category, you would be willing to, but in terms of thetiming, if Business Objects close in Q1 would you feel happy to do one soonafter that or should we expect to lag before any further large deal?

--: Michael Briest - UBS: So, you are not ruling out doing another large deal soonafter, if you felt it was the right thing to do?

I cannot rule this out. If, coming back, if there is anopportunity which is a perfect strategic fit, it would be wrong to rulesomething out. Michael Briest - UBS: Okay. Thank you very much.

Thank you. We have time for one further question.

Thank you. The final question comes from Mr. Knut Woller ofUniCredit. Please, go ahead with your question. Knut Woller -UniCredit: Yeah, hello, if I can just two quick ones hopefully not toolong for final one. And Werner you were indicating $56 million in pro formaadjustments on the operating margin due to acquisition related and stock-basedcompensation. Did I get that correctly implying an operating pro forma marginof 27.1% and could you give us the details for Q1 and Q2, I think you did notdisclose them there? And a shortquestion for Henning on the NetWeaver target, I think you were looking forroughly 1 billion in NetWeaver license sales for the full year in ‘07, is thisstill valid? Thanks.

I can answer this. I think that is something what youmisunderstood. I have never said a billion NetWeaver in 2007. Our guidance wasalways the ambition 2010. And if I look to, at the figures we have, I think wewill come close. We will, in euro, I am not so sure in dollar, significantlybeyond. So, therefore I would say let’s see, if we continue in the fourthquarter, put it this way, if we continue with the same pace we had in the thirdwhich was absolutely fantastic in NetWeaver we will get there but let’s see.But we can get close.

And I will provide you the numbers here. If you, againstock-based compensation expenses in Q3 this year was $38 million, year-to-datewas $87 million and acquisition related charges in Q3 this year, $18 millionand year-to-date, $42 million and if you add it together then you come to 56 inQ3 compared to 29 in Q3 last year and year-to-date it’s 129 compared to 111. Knut Woller -UniCredit: Okay. Thanks very much.

Okay. Thank you. This closes our conference call today andwe look forward to seeing you here in Waldorf at our Analyst Day, on the 12thof November. Thank you very much. Good bye.

Good bye.

Good bye. Léo Apotheker: Good bye.

Ladies and gentlemen that concludes today’s conference call.Thanks for participating and you may now disconnect.