I am spending some time as a guest of SAS this week and we got started today with Jim Goodnight, CEO of SAS. He began by describing SAS Institute’s 33 years of continuous revenue growth as well as similarly growing reinvestment in R&D. SAS has not laid anyone off this year, for which kudos, and this will mean a slight drop in profit. A 34th year of revenue growth is touch and go and somewhat dependent on the dollar (with 65% of revenue coming from overseas a weak dollar makes a big difference). Financial Services accounts for 42% of SAS revenue and clearly this has had a negative impact on SAS. Government has stepped up, delivering 15% of revenue and growing this year while Retail, even though only 4%, has been growing rapidly.
SAS had about 148 releases in its products over the last 12 months. SAS has a commitment to using the maintenance revenue it brings in on upgrading and improving the products customers use. Jim regards this one of the secrets to their success. Releases this year include some new solutions for warranty, anti-money laundering, social network analysis (the kind of thing SingTel Optus is doing) and more.
Jim Davis spoke next, focusing on how analytics is helping companies re-tool themselves to survive and thrive in the current and evolving economy. SAS, he says, has evolved from just building tools to also building horizontal solutions to finally adding vertical solutions focused on solving problems in the context of a single industry. This last transition has taken a while and has required a long term focus, something that Jim pointed out reinforces the value of remaining private.
Once again Jim discussed the need for a broader approach (what SAS calls Business Analytics) beyond just Business Intelligence capabilities. This Business Analytics framework involves a number of sub-brands besides the core SAS brand: Dataflux is focused on integration and data quality, jmp provides statistics and statistical analysis now integrated with SAS, IDEAS is a hosted revenue management capabilities and Teragram, focused on unstructured data like text, video, voice.
SAS has a set of industries on which it focused (Retail, Banking, Insurance, Manufacturing….) and in which it delivers specific functional solutions like operational risk management or fraud detection. These are very business-centric solutions and are marketing and sold with little focus on technology.
SAS sees analytics becoming increasingly important to organizations (helping to explain their growth) and sees lots of folks talking about analytics. But not all analytics are created equal and Jim described the 8 levels SAS sees, the first four of which are pretty much standard BI and the second four of which are more interesting:
- Standard reports
- Ad hoc reports
- Query, drilldown, OLAP
- Alerts of business activity monitoring
- Statistical analysis to understand data
- Forecasting to plan for the future
- Predictive Modeling to answer specific questions about the future
- Optimization to improve and maximize the value of resources
Jim wrapped up by pointing out that while SAS has traditionally sold software to customers for on premise install, they now sell this software in a SaaS way as well as canned or complete products and hosted solutions where SAS also provides the statistical know-how to make the most of the analysis tools.
Not much new here but I like the 8 stages of analytics and nice to see SAS offering multiple ways to consume their products – something that is essential if analytics is to grow as much as it should.