8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 8-K

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(D) OF THE

SECURITIES EXCHANGE ACT OF 1934

DATE OF REPORT (DATE OF EARLIEST EVENT REPORTED): March 18, 2005

SUNGARD^® DATA SYSTEMS INC.

(Exact Name of Registrant as Specified in Charter)

DELAWARE	1-12989	51-0267091
(State or Other Jurisdiction of Incorporation)	(Commission File Number)	(I.R.S. Employer Identification No.)

680 EAST SWEDESFORD ROAD, WAYNE, PENNSYLVANIA	19087
(Address of Principal Executive Offices)	(Zip Code)

REGISTRANT’S TELEPHONE NUMBER, INCLUDING AREA CODE: 484-582-2000

Not Applicable

(Former Name and Former Address, if Changed Since Last Report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

¨ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

¨ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

¨ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

¨ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 7.01. Regulation FD Disclosure.

The Company is furnishing with this report, as Exhibits 99.1 and 99.2, respectively, the Chief Executive Officer’s Letter to Stockholders for the year ended December 31, 2004 and the 2004 Business Matrix.

The information furnished pursuant to this Item 7.01, including Exhibit 99.1 and Exhibit 99.2, shall not be deemed to be “filed” for the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise subject to the liabilities of that section.

Item 9.01. Financial Statements and Exhibits.

(c) Exhibits.

99.1: Chief Executive Officer’s Letter to Stockholders for the year ended December 31, 2004

99.2: 2004 Business Matrix

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

		SUNGARD DATA SYSTEMS INC.
Date: March 18, 2005	By:	/s/ Michael J. Ruane
		Michael J. Ruane
		Senior Vice President-Finance and Chief Financial Officer

EXHIBIT INDEX

The following is a list of Exhibits furnished with this report.

Exhibit No.	Description
99.1:	Chief Executive Officer’s Letter to Stockholders for the year ended December 31, 2004
99.2:	2004 Business Matrix

EX-99.1

EXHIBIT 99.1

A message to our stockholders

For SunGard, 2004 was a year of solid financial performance and strategic accomplishment. We achieved our targets for the year and became even stronger. Revenue reached a new record of $3.56 billion, up 20% from the previous year. Net income increased to $454 million,* a gain of 23%, and net income per share rose to $1.54,* an increase of 21%. Perhaps most important, we became even more competitive in the field and made real strategic progress, which we believe will facilitate growth.

A key strategic decision

Facilitating future growth and enhancing stockholder value were the principal reasons that led us to a key strategic decision we announced in October 2004: our plan to spin off our Availability Services business from our Software & Processing business. The goal is to structure the spin-off as a tax-free stock dividend, creating two independent publicly traded companies, each with substantial size and scope and each already a leader in its industry. SunGard’s Software & Processing business, which includes two SunGard business segments, Investment Support Systems and Higher Education & Public Sector Systems, represented approximately 66% of the company’s revenue in 2004, while the Availability Services business accounted for the remaining 34% of revenue and generated almost half of our operating income.

The rationale for this decision is compelling. These businesses are distinctly different. As longtime SunGard investors know, Software & Processing and Availability Services were brought together in the leveraged buyout that created the company in 1983; at the time, each was considered too small to stand alone. There were some financial and operational synergies that helped SunGard grow and achieve more predictable results, but that “portfolio effect” is much smaller today. Each business grew and developed at its own pace, and today each is large enough to succeed on its own.

* Full-year 2004 net income and diluted net income per share includes an after-tax gain of approximately $46 million, or $0.16 per diluted share, from the sale of Brut LLC in September 2004. Excluding the gain from the sale of Brut and all merger and spin-off costs, diluted net income per share was $1.40, an increase of 10% over comparable 2003 results.

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The differences between Software & Processing and Availability Services became more apparent over time. Today, each has its own drivers and dynamics. A spin-off would provide each company greater focus and flexibility to pursue growth strategies that are tailored to its distinct set of challenges and opportunities and that are better for its customers. Each company’s customers also would benefit from the fact that their business will be all the more important to their vendor. It is worth noting here that the reaction from customers has been extremely positive. Finally, separating into two companies would not only enable investors to make independent investment decisions for each, but would also enable the management of each company to be more closely aligned with its stockholders in terms of performance, risk and reward.

The decision to spin off Availability Services was our biggest strategic event of 2004, but SunGard also made progress in many areas. In terms of competitiveness, customer penetration, and the breadth and depth of products and services, SunGard grew stronger in 2004.

Software & Processing

Within Software & Processing, customer expectations have increased. Customers expect more for less. They want to “go live” much faster with less project risk. They want more integrated solutions, and they favor vendors that are easy to do business with. Technology is once again seen as a competitive differentiator—a shift from the single-minded focus on cutting costs that has characterized the last few years. Customers are still investing to reduce costs, but now they are also investing in technology to become more competitive and to deal with ever increasing compliance requirements. We believe our solutions are well positioned to help our customers achieve their goals.

Technology integration plays a vital role in the quest for competitiveness, especially for financial services customers. This often results in larger investments in our products and services. To cite one example from 2004, we signed one of the largest ASP deals in our history when a major New York bank renewed its contract for INVEST ONE, our leading investment accounting solution, and added complementary SunGard products to form the core platform for its European business. The bank believes our integrated global solution will give it a competitive edge.

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Customer centralization of procurement decisions results in more scrutiny and pricing pressure, but it also opens up opportunities for cross selling. We believe our Global Account Management (GAM) program is well suited to identify opportunities and deepen relationships at our largest financial services accounts. In November we signed our first comprehensive master services agreement with one of our largest GAM customers which will govern all new contracts with the bank. We believe this agreement will make it easier for the customer to do business with us. We have already received several orders under the new master agreement, and we hope to replicate this success with other financial services customers.

While financial services continues to be the principal focus for Software & Processing, we are making real progress in serving other growing markets: higher education institutions and public sector entities. Colleges and universities have escalating IT requirements, driven by the need to develop integrated enterprise architectures to replace disparate legacy systems and the demand from students, faculty and administrators for 24/7 Web-based self-service. The public sector is under pressure to comply with new federal and state mandates that require significant investments to upgrade to modern technology. For all of these customers, particularly institutions of higher education, we often replace dozens of old systems, spreadsheets and manual processes that were never designed to work together. The integration of our offerings, our strong on-time delivery and our on-budget track record are all reasons these customers choose SunGard over the traditional ERP companies we compete with.

For example, a well-known college had developed plans to build a $50 million student center designed to house all nonacademic administrative functions for students. Instead, the college installed our Luminis solution and put all these services on the Web, which enabled it to cancel the construction project. In addition to saving a great deal of money, the college can now offer courses and degrees to remote students, tapping new sources of enrollment revenue and helping to enhance its prestige.

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Several of SunGard’s Higher Education customers have won “Best of the Web” awards on the basis of both our compelling Web design and the rich functionality of our back-end systems that are seamlessly integrated in a browser for access by students, teachers and administrators.

Availability Services

Today more than half of outgoing customer proposals bundle two or more services, a change from the past when customers shopped for services in narrow niches. We are positioned better than ever to meet the increasing demands of customers across the continuum of information availability services, from “always on” production services to “always ready” standby solutions. The increasing demand for bundled services is driven by enterprises of all types seeking to optimize spending by choosing a distinct level of service for each application and server, depending on the amount of downtime they can tolerate for each. This often results in more customized solutions, which plays to SunGard’s strengths. The more complex the requirements, the more differentiated our offerings become.

One of the most promising sectors for Availability Services is the healthcare industry, where the combination of regulations (HIPAA, for example) and new hospital and managed-care software applications has dramatically increased the need for information availability services. Automating patient care, for instance, results in a significantly higher demand for system uptime; patients cannot be left without prescribed medical care because of a system’s unavailability.

During 2003 and 2004, revenue growth in Availability Services was affected by the decision of some large financial services firms to handle their availability requirements in-house. Although in-house solutions provide customers with exclusive access to infrastructure, we believe that, for many customers, building and maintaining an in-house solution is significantly more costly and difficult than subscribing to comparable, dedicated services from us. This is because of our economies of scale, technology expertise, resource management skills and ability to provide vendor-neutral solutions. We do not expect the in-house trend among larger financial services firms to have as much of an effect on our business in the longer term, because we believe that most of the firms that have decided to “in-source” their availability needs have already told us so.

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Acquisitions

Despite the economic downturn over the past few years when others were less willing to pursue strategic opportunities, SunGard has continued with its acquisition program. The vast majority of our acquisitions have contributed significantly to our growth. They have also made SunGard more competitive and have been a great source of executive talent. Some eighty percent of our top one hundred operating managers joined us through an acquisition. I doubt we would have been able to attract so much entrepreneurial talent through more conventional means.

Looking forward

Acquisitions will continue to play a role in our growth, but our focus remains on growing internal revenue—which excludes revenue from acquired businesses owned for less than one year. On the internal revenue front, results were much better in 2004 than in 2003, but they are low in absolute terms. Cost cutting by our customers is a double-edged sword for us. Many of our solutions help customers reduce costs, but the drive to cut costs also puts pressure on our fees. Pricing pressure did not get worse in 2004; it stayed about the same. We know that to accelerate our revenue growth, we must capture a larger share of IT spending from our existing customers. This is a focal point for everyone at SunGard as we head into 2005. Developing broader and deeper customer relationships across all of our businesses is one of our key goals for 2005, and is also key to faster growth in the future.

It’s part of the SunGard culture to look to do more with less. It’s critical to our ongoing profitability, and is a big reason we were able to consistently invest in products and infrastructure during the recent downturn. In 2004 we spent 10% of Software & Processing revenue on product development, excluding customer-funded work, and we invested approximately $240 million on capital expenditures company wide.

Let me summarize the main achievements of 2004. We met our financial targets. We began the planning process for the spin-off of our Availability Services business in order to strengthen the focus and facilitate the future growth of both businesses. We ended the year stronger in the field—more strategic and more mission critical to our customers. In short, it was another

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successful year for SunGard. The credit for that success belongs entirely to the people of SunGard. Their hard work and commitment created two strong and growing businesses.

I want to acknowledge that there is a poignant aspect to the planned spin-off. Our two management teams have worked side by side, as partners, for more than two decades, and our dedicated corporate staff has worked hard to support both. The good news is that, following the spin-off, SunGard Availability Services will be in the excellent hands of Jim Simmons, CEO, and Ted Gaasche, COO, working with Jim Mann, our Chairman, and Mike Ruane, our CFO. Likewise, Software & Processing will benefit from the continued leadership of Mike Muratore, EVP, and Andy Bronstein, our Controller, who will become our CFO. After the spin-off, Jim Mann will remain on our board in a nonexecutive capacity, while serving as Chairman of SunGard Availability Services. Much of our corporate group will stay with Software & Processing, but some will become part of SunGard Availability Services due to the spin-off. This means that the spin-off will cause many of us to part paths with colleagues we have worked with for years, in some cases since the very beginning of the company. While it is hard to say goodbye, it is indeed rewarding to know that we have the depth of executive management to provide both companies with first-rate leadership going forward.

Among all of our leaders, one stands out. On behalf of everyone at SunGard, I would like to acknowledge the numerous, significant contributions of Jim Mann. Jim has done more to create stockholder value than any other person in the history of our company, and for that he has earned our deepest gratitude and respect. I must also acknowledge a personal debt to Jim. I have worked for Jim since I was 27 years old, when SunGard acquired the company I cofounded, and without a doubt, he has been the single most important influence on my career. Thank you Jim, not only for providing valuable guidance to me, but also for serving as a superb mentor for so many other SunGard executives.

As we head into 2005, we remain enthusiastic about our capabilities, our strengths and our potential. It promises to be an exciting year at SunGard, and I look forward to reporting on our progress.

Cristóbal Conde

President and Chief Executive Officer

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EX-99.2

EXHIBIT 99.2

SunGard Business Areas

SOFTWARE & PROCESSING

Businesses:	Solutions used for:	Solutions used by:	Principal brands/services:	Leadership:
Investment Support Systems		Revenue: $1.84 billion—2004 / $1.61 billion—2003
Brokerage & Trading Revenue $537 million – 2004 (1) $523 million – 2003*	Integrated straight-through processing for trade analysis, capture, matching, routing, confirmation, clearance, settlement, accounting and reporting.	Broker/dealers, trading and sales desks in banks, proprietary trading firms and hedge funds.	BRASS; Broker Direct U2; FRONT ARENA; MicroHedge; UMA	70% of Nasdaq trade orders flow through SunGard systems.
		Bank and brokerage back-offices, and clearing firms in the U.S. and U.K. Futures back-offices worldwide.	GMI; InTrader; Octagon; Phase3; SunGard Stream	SunGard systems support listed derivatives transactions on 75 exchanges worldwide.
	Brokerage, execution and clearing services.	Broker/dealers, institutional investors and professional traders, mostly in North America.	HammerTrade; SunGard Transaction Network	2,000 asset managers, 1,000 issuers and 160 broker/dealers are connected to the SunGard Transaction Network. 5 million transactions/day are processed on SunGard systems.
Wealth Management Revenue $345 million – 2004 $286 million – 2003	Integrated wealth management, asset accounting, portfolio management, trust accounting, trust tax services, securities lending and custody back-office processing.	Private banks, trust banks, brokers, investment advisors, custodians and fiduciaries worldwide.	AddVantage; Advisor Technologies; Charlotte; Custody Services; Global One; Global Plus; Loanet; Martini; Trust Tax Services of America; Wealth Management Services; WorldLend	700 trust banks manage $2.5 trillion in assets on SunGard systems. $6 trillion in securities loans are processed on SunGard systems.
	Financial planning and asset allocation. Compliance monitoring.	Brokers, financial planners, investment advisors, and fiduciaries, mostly in North America.	BrokerWare; Frontier; PlanningStation; PowerPortal; PowerStation; Synapse; WealthStation; WebPlaid	50,000 investment advisors offer financial planning services using SunGard systems.
	Financial and energy market data and news distribution. Time series intelligence. Data management systems and services.	Financial and energy analysts, brokers, data managers, hedge funds and central banks worldwide.	FAME; PAWS; PowerData; referencePoint; TimeIQ; Tradeline	6 of the world’s 12 largest central banks and 8 of the world’s 10 largest commercial banks manage time-series data using SunGard systems.
Treasury & Risk Management Revenue $360 million – 2004 $345 million – 2003*	Market and credit risk management. Asset and liability management. Derivatives trading and back-office processing. Systems integration, project management and consulting services.	Trading departments dealing in derivatives and related instruments in banks, specialized finance companies and hedge funds worldwide.	Adaptiv; BancWare; Credient; Infinity; Monis; Opus; Panorama; Reech	400 OTC derivatives trading organizations use SunGard systems.
	Processing of energy transactions, energy trading and energy risk management.	Utilities, power generating companies, energy traders and marketers, and distribution companies.	EnForm; Entegrate; Kiodex; ZaiNet	200 energy industry participants manage 300 billion kilowatts of electricity and 80 bcf of gas per day on SunGard systems.
	Global corporate treasury functions including cash management and transaction initiation.	Treasury departments of corporations and banks worldwide.	AvantGard/APS 2; AvantGard/ETX; AvantGard/GTM; AvantGard/ICMS; AvantGard/Quantum; AvantGard/ResIQ	52 Fortune 100 corporations use SunGard systems.
	Payments exception management and reconciliation and messaging.	Correspondent and clearing banks. Asset managers and custodians.	intelliMATCH EP; intelliTRACS; MINT Knowledge Family; STeP; Stor/QM PLUS	21 of the world’s 25 largest financial services companies use SunGard systems for messaging or exception management.
Investment Management Revenue $212 million – 2004 $192 million – 2003	Institutional investment accounting, portfolio management and performance measurement.	Institutional asset managers, mutual funds, hedge funds, funds of funds, banks, prime brokers and third party administrators worldwide.	Decalog; V3; GP3; HedgePower; IMPower; INVEST ONE; InvesTier; InvesTran; XAMIN	Investment managers, banks, hedge funds, insurance companies, custodians and debt issuers account for more than $15 trillion in assets on SunGard systems.
	Integrated front-to-back office support for private banking.	International private banks mostly in Switzerland and Luxembourg.	APSYS III
Benefit, Insurance & Investor Accounting Revenue $385 million – 2004(2) $260 million – 2003	Participant accounting, recordkeeping, workflow management and document generation for 401(k) plan administration.	Retirement plan administrators including mutual funds and banks.	MACESS.exp; Octane8; OmniDBEN; OmniPay; OmniPlus; PowerImage; Relius	43 million retirement plan accounts are processed on SunGard systems.
	Investor accounting and recordkeeping for equities, bonds and mutual funds.	Corporate trustees, transfer agents, banks and mutual funds.	BondMaster; CertMaster; CSSII; Investar*ONE; SUNSTAR; Trustware Corporate Trust	3.5 million bondholders with over $10 trillion in assets are managed on SunGard systems.
	Sales support, benefit and policy administration, financial accounting, portfolio management, statutory accounting and reporting for all lines of insurance.	Insurance companies and agents, and financial services companies.	ABC; AIMS; Amarta; CDS; EAS; EFS; EPS; FrontTier; ProCede; ProGen; SunGard AIMS; SunGard COMPASS; SunGard Financials; SunGard VIP	1,500 insurance companies including 8 of the top 10 U.S. life insurance carriers use SunGard systems.

Higher Education & Public Sector Systems		Revenue: $525 million—2004 / $179 million—2003
	Administrative, academic and integration solutions; business and curriculum planning solutions; portal, collaboration, content management solutions; information access solutions; and implementation and technology management services for higher education.	Universities and colleges worldwide.	Advance; Collegis; SCT Banner; SCT fsaATLAS; SCT Information Access; SCT Luminis; SCT Matrix; SCT PowerCAMPUS; SmartCall	1,600 universities and colleges rely on SunGard’s administrative, portal advancement, information access and academic solutions. Data on more than 14 million alumni is entrusted to SunGard’s advancement and fundraising solutions.
	Accounting, payroll, personnel, utility billing, land management, public safety and justice administration for governments. Accounting, payroll, personnel, fundraising, grant and project management, student administration and reporting for K-12 education.	Local, state and federal governments and special districts, K-12 schools, and nonprofit organizations such as associations, hospitals and charitable trusts.	Click2Gov; CommunityPLUS; eGovPLUS; FinancePLUS; IFAS; Naviline; StudentPLUS; UK Public Sector Services	800 cities and counties, 600 K-12 organizations and 600 public safety agencies use SunGard systems. In February 2005, SunGard acquired Vivista Holdings Limited, which expanded its public safety, criminal justice and government solutions into the U.K.

*2003 reclassified for comparative purposes.

(1) Includes Brut LLC until its divesture in September 2004.

(2) 2004 includes revenue from a business unit which moved to ISS from HE/PS.

AVAILABILITY SERVICES

SunGard Availability Services		Revenue: $1.19 billion—2004 / $1.17 billion—2003
	A complete portfolio of information availability services from “always on” production services to “always ready” standby solutions. These are supported with secure, redundant facilities, systems and networks—to maintain cost-effective, reliable and compliant IT environments.	Broad range of North American and European businesses and government agencies. Information-dependent entities including financial services, business services, healthcare, retail and manufacturing companies.	Always-ready Services: Standby IT infrastructure, communications network and alternate workspace for personnel Always-on Services: Hosting and managed-IT services, network access management, security and optimization, and e-mail archiving and retrieval Professional Services: Availability Services planning, IT systems architecture and infrastructure design, and information security services; Availability Planning Software	Pioneer and leading provider for 25 years of information availability services, with vendor-neutral support for over 30 current and legacy platforms keeping data available up to 99.99% of the time. 10,000 customers in North America and Europe. More than 60 facilities spanning 3 million square feet of hardened secure infrastructure. 25,000 mile global network. 100% success rate supporting customer recoveries from unplanned interruptions. Over 500 consulting projects completed in 2004, ranging from traditional business continuity strategy and planning to technology migration and information security assessments. In January 2005, SunGard acquired Inflow, Inc., which enhanced its hosting and managed services capabilities, and added 14 datacenters throughout the U.S.