Compuware Strategy— How We'll Grow "Compuware will remain a profitable, growing company because we understand that what matters most in any business are talented people and strong principles not glitzy technology." Peter Karmanos, Jr. Chairman and CEO Compuware Corporation Compuware's strategy for sustainable growth is based on three goals: to maintain our competitive edge in the mainframe market, to expand our distributed systems software market share and to grow our professional services business. These goals for fiscal 2002 are built on a solid foundation—nearly 29 years of experience in the technology business. Our goals are further supported by significant product and services development during the past year, and because of these efforts, these goals are all attainable. Delivering substantial value to clients, Compuware products are the industry-leading productivity tools in the mainframe market. We have worked hard to make sure our mainframe products have a wide presence across industries. So how will Compuware maintain, and even increase, our market share? We plan to meet this goal by aggressively improving our products and rapidly evolving the product line to better serve the needs of our customers. For example, to meet the changing needs of the marketplace, Compuware mainframe products have been engineered to support the new IBM zSeries platform and will remain fully compatible and functional as this platform evolves. In answer to our clients' requests for multiple pricing options, we remain committed to flexible, value-oriented licensing and pricing options. Complementing these global efforts to increase market share, we are working hard to augment the technical capabilities of our individual mainframe products. This fiscal year, Compuware released several significant enhancements to the File-AID product line, our enterprise-wide data management workbench. File-AID helps organizations migrate and integrate key data from disparate sources and formats. New versions of File-AID feature not only enhanced technical capabilities, but also improved usability and compatibility with multiple environments. By strengthening File-AID through compatibility with XML, new user interfaces improved data cleansing and validation features and a more scalable architecture, Compuware has made this product available to a wider marketplace. Additionally this fiscal year, Compuware released Abend-AlD E-Business Edition, which includes support for the IBM MQSeries and CICS Web Interface. Abend-AID provides developers with crucial diagnostic information that helps pinpoint problems and suggests corrective actions to resolve those problems quickly. Finally this fiscal year Compuware introduced XPEDITER/TSO version 7.0, the industry's first automated testing tool developed for DB2 Stored Procedures. Our clients use XPEDITER/TSO to increase the reliability of their applications. Compuware's commitment to strengthening technical features and customer support for our mainframe products is unwavering. In fiscal 2002, we will build upon the efforts of the past year to increase our competitive edge in this marketplace, while simultaneously investing our resources in attacking the distributed systems software market. The complex nature of distributed computing has created many business problems and many solution providers. This crowded marketplace means fewer established vendors and industry standards-and more opportunities for Compuware to grow. In order to seize these opportunities we are transforming our business model from a large-deal orientation to a Gena Sweeney, EcoSYSTEMS Technical Communication Manager, Farmington Hills, Michigan high-volume, transaction-oriented sales and delivery model. To effectively reach this broad and diverse marketplace we have dedicated more than 600 Compuware salespeople to forging agreements with distributed products clients. These salespeople have a strong message to bring to our current and prospective clients, because Compuware's distributed product family is the only product solution in the industry designed to optimize every step in the application life cycle. Our distributed products address the major technology challenges facing our customers in every phase of software production, from application development to managing the performance of the application as it runs on a network. In support of our dedicated sales force, Compuware is continually improving its sales process to ensure that our transition to this high-volume transaction model is successful. We are also carefully examining alliances and channel partners ensuing that our rapidly developed and enhanced products reach the market quickly through a variety of channels. Most importantly we are diligently working to expand the technical capabilities of our more than 75 distributed products. In fiscal 2001 we continued to expand the key environments and products supported by Compuware distributed products, including XML and Microsoft technologies such as Visual Studio, SQL Server, Exchange 2000 and Microsoft .NET. By increasing platform support across our product families, we make Compuware software available to even wider markets, a strategy we will continue to pursue in the coming fiscal year. Integrated Products and Services Carolyn Lagrant, Programmer Analyst, listens during a planning meeting at the Detroit Medical Center Application Management Center A cornerstone of our products and services strategy is to offer IT organizations a complete solution across the entire application life cycle from a single vendor. To more rapidly reach this goal, we realigned our products organization this fiscal year. This realignment has streamlined our development processes, allowing Compuware to integrate, release and enrich our products more quickly. Integrated products and services provide maximum value to Compuware customers, and we are committed to promoting our products and services integration as a competitive advantage. Farmington Hills, Michigan Facilities and Administration employees James Feeny, Theresa Mayfield, Brian Hendrick and Steve Marquardt discuss space-planning strategy We introduced a number of new, integrated products and services offerings this fiscal year. Sharing the technology of our QACenter and NuMega product lines, our new Reconcile product helps IT organizations deliver applications that exceed business expectations. Similarly, DevPartner Studio 6.5 also shares technology with QACenter. Called TestPartner, this new product was developed to support the testing of distributed and web-based applications by providing a test automation infrastructure that can be extended with Microsoft Visual Basic for Applications. This fiscal year also saw the launch of Compuware's PointForward solution. Combining Compuware technology, people and processes, PointForward helps companies measure the performance and quality of their web-based applications. PointForward is delivered over the Internet, allowing our customers to tailor the solution to their needs, on their schedules. Key components of PointForward include reliability, integrity, and scalability testing, as well as performance monitoring. Compuware is aggressively marketing PointForward by offering potential customers a free, one-time remote scalability test. We are pleased with our efforts toward expanding the integration of our products and services, and we expect to demonstrate further success in this area in the coming year. UNIFACE Application development and integration is a large, growing marketplace. To meet our clients' needs for customized and integrated applications, Compuware unveiled UNIFACE Eight this fiscal year. UNIFACE Eight automates and integrates business processes throughout and across companies. It gives businesses the tools they need to increase productivity, reduce costs and improve customer service through extensive new capabilities for application development. Customers have already noted that UNIFACE Eight has helped them improve Cambridge, Massachusetts employees Grizelle Vazquez, David Ancheta and Cristina Chu review a product development schedule for Compuware's APM products developer productivity by up to 40 percent through its Business Process Automation, application development, end-to-end integration and technology management capabilities. UNIFACE also supports the Open Applications Group Interface Specification (OAGIS), a messaging standard that will improve the end-to-end integration capabilities of Compuware's products by seamlessly integrating them with industry standards. In order to help our customers integrate their existing mainframe applications with newer technologies, Compuware also released UNIFACE CICS Connector, UNIFACE IMS/DC Connector and UNIFACE Connector for MQSeries. These extensions to the already comprehensive UNIFACE tool set tor legacy application integration enable the reuse of existing legacy components and applications. Also this fiscal year, Compuware added XML support to UNIFACE, extending its capability to facilitate the development and deployment of multitier e-business applications. Kathryn McCarthy, Suzanne Moriarty and Van Giang discuss a client's computing requirements at a Sydney, Australia sales meeting QACenter To meet the increasing needs of our customers for high-performance, high-availability applications, Compuware launched QACenter E-Business Edition this fiscal year. This product suite is designed for quality assurance teams, and helps companies accelerate web site and other application deployment while meeting reliability and performance targets. Additionally in fiscal 2001, Compuware launched QACenter Performance Edition. This software suite helps companies dramatically improve the scalability and availability of their software applications by delivering comprehensive tools for load testing, monitoring and file and data management. NuMega NuMega products provide a variety of technologies tnat help our customers accelerate the development and improve the quality of distributed applications. Additions to the NuMega product family this fiscal year included a new release of NuMega DriverStudio that helps speed the development of device drivers for all Windows platforms. Compuware also unveiled new versions of NuMega DevPartner Studio and DevPartner Java Edition this fiscal year. This suite of software development productivity tools helps developers build reliable, high-performance e-business applications using multiple technology platforms. To advance the state of software debugging tools tor the Intel Itanium processor architecture, Compuware announced that it is teaming with Intel Corporation to develop a new generation of debugging and error detection tools that take advantage of the new technologies contained in the Intel Itanium processor. EcoSYSTEMS La Jolla, California employees Joonyoul Choi and Claudio Canive test a new feature in one of Compuware's EcoSYSTEMS products The complexity of distributed computing has created a growing need for systems, network and application management software. Compuware is committed to increasing our share of this important market through our EcoSYSTEMS products, which give our customers the capability to effectively manage the performance of networked software. Specifically this fiscal year, Compuware bolstered its stable of performance and capacity monitoring software through the acquisition of technology from Optimal, an award-winning developer of e-business performance measurement tools. Adding Optimal's products to our EcoSYSTEMS product line presents a compelling answer to many of the application performance and network capacity problems facing our clients. The Integration of Optimal technologies into the EcoSYSTEMS tool set has gone well, and all EcoSYSTEMS products are now being released on a single compact disc. This fiscal year Compuware also announced new features in EcoTOOLS for the management of Microsoft Exchange. EcoTOOLS now provides more information about the causes of bottlenecks on Exchange servers, databases, operating systems and other infrastructure components. Compuware also extended EcoTOOLS to support iPlanet, Apache and Netscape Application servers, as well as Oracle 8i. Additional releases of EcoSCOPE and EcoPREDICTOR went to market this fiscal year, each featuring enhanced tools for managing the performance of distributed applications. Compuware further strengthened the EcoSYSTEMS product family by developing and launching a new web- based reporting console. This console provides access to historical data from multiple EcoSYSTEMS products and provides a comprehensive view across enterprise infrastructure. Recognition In November of 2000, Compuware's Application Expert, which provides technology for troubleshooting in preproduction environments, received the highly coveted Editor's Choice Award from Network Computing magazine. EcoSCOPE, another key member of the EcoSYSTEMS product family, was selected as a finalist for the Network Computing 2000 Well-Connected Award in the category of Application Management. We have worked very hard in the past fiscal year to broaden and improve the value of our distributed product family. We will continue to expand our presence in the distributed software market, because it represents our greatest opportunity to increase the size and earnings of our company. Compuware was founded as a professional services firm, and our services offerings continue to represent a compelling value proposition for our clients, particularly in combination with our products. In fact, this fiscal year, 52.6 percent of our company's revenue came from professional services. To capitalize on the high demand for our services, we will seek to increase revenues, employees and margins in our Professional Services Division, while maintaing our position as the most cost-effective, high-quality provider of IT staff supplementation services in our industry. We will achieve these goals by focusing on our core business: staff supplementation. At Compuware, the term staff supplementation encompasses the individual and small group placement of billable professional staff Lucy Kulpa, Project Manager, leads a discussion with an Abend-AlD development team More than 25,000 customers use Compuware products and services Kevin Sims, QACenter Product Line Sales Support Manager, gathers information from co-workers for a client's inquiry on customer accounts; supplementing large numbers of staff for projects; taking full responsibility for projects including their management and performing Application Portfolio Management for the outsourcing of complete application development and maintenance. In other words, Compuware will provide our customers with any combination of technical talent they need to achieve their goals at a reasonable price. We will further support the growth of our services business by continuing to take cost and administrative inefficiencies out of the business. We will not be seduced by niche businesses, focusing instead on the kinds of projects and opportunities that will help our clients succeed and will help our business grow at a sustainable rate. In growing our professional services business in the coming year, Compuware will continue to refocus our sales efforts, streamline our existing business operations and emphasize customer and employee satisfaction. We will be a highly competitive organization that moves swiftly, acts decisively and functions economically in getting the job done for our customers. Compuwaie has more than 110 offices in 47 countries