The acceleration comes as Darmstadt-based Software AG shifts under CEO Sanjay Brahmawar to a subscription-based model from licences, replacing lumpy up-front payments over time with more predictable revenue streams.

"In two or three months we have seen digital transformation of two to three years," Brahmawar, a former IBM executive, told Reuters in an interview.

Software AG specialises in so-called middleware, the "glue" that makes it possible for different systems to talk to each other and allows its clients to run their systems at on-premise servers or on top of different cloud providers.

Brahmawar highlighted a client win with an Internet of Things (IoT) solution for U.S. medical technology company Hill-Rom, saying it would generate seven-figure euro revenues. The deal was done remotely within three months.

Second-quarter group bookings, management's preferred growth metric, grew by 32% to 109.8 million euros ($126.5 million). Subscription and software-as-a-service (SaaS) contracts accounted for 88% of new business in Software AG's digital segment that accounts for around four-fifths of revenue.

Group revenue declined by 3% to 204.6 million euros while operating profit was down by 26% to 41.4 million euros - generating a margin of 20.2%. That was in line with full-year guidance of 20%-22% which the company reiterated.

Software AG confirmed its goal of achieving 1 billion euros in annual revenues in 2023, with an operating margin of between 25% and 30%. The company's shares are up 21% in the current year to date.

(Reporting by Douglas Busvine; Editing by Michelle Martin)