To: Sarmad Y. Hermiz who wrote (125394 ) 5/22/2001 1:00:21 PM From: H James Morris Respond to of 164684 Don't believe everything you read. Added to Autn 7.25-7.35. >22 May 07:59 BARCELONA (Dow Jones)--Germany's Software AG (G.SWR) is in preliminary discussions with U.K. software rival Autonomy PLC (AUTN) in an effort to align the two groups' fledgling XML software products, Software's Chairman and Chief Executive Erwin Konigs told Dow Jones Newswires Tuesday. Konigs said both companies have developed specific products for XML, a content agnostic application that can read a wide variety of data, graphics and images. Autonomy has recently launched a XML search engine, whilst Software has developed a XML-based database. "The combination of a search engine and database would be a good fit," Konigs said. An Autonomy spokesman was unavailable for comment. Konigs said discussions are still at an early stage, meaning it would be six to eight weeks before any business plan could be implemented. There are no discussions at the moment about either company taking a financial stake in the other, "but let's see what happens" he added, speaking on the sidelines of the Credit Suisse First Boston European Technology Conference. As for Software's core businesses, Konigs said the group has benefited from a wholesale switch away from e-business purchases and toward a dramatic move by companies to upgrade their information technology infrastructure. "Companies are preparing for tougher times ahead, so they are postponing e-business purchases and upgrading (information technology) infrastructure to increase efficiencies," he said. Software's first quarter sales increased by 35% while its licensing growth advanced 50%. Konigs estimates that software licensing growth will increase by 80% in the second quarter, which ends June 30. -By Brian Truscott, Dow Jones Newswires; 44-20-7842-9289; brian.truscott@dowjones.com