Carl Farrell came up to talk about sales enablement and execution. 2010 was an interesting year in the Americas as the recovery was very inconsistent between countries in the Americas and across verticals. Strong growth in First Year Fees – 21% in US, 15% in Canada and 56% nearly in Latin America (with the Southern economies like Brazil and Caribbean being very strong). The media/communications industry, federal government, retail and financial services all did well with 30% growth or so in terms of first year revenue. State and local government also did reasonably well with a big focus on fraud detection to help state and local governments recover lost money.
Growth in the Americas comes from analytics and business intelligence both of which showed steady growth while customer intelligence grew dramatically (from a lower base) as did risk management and fraud. The sales focus is very vertical, within larger countries and regionally to support the smaller countries. SAS remains very strongly focused on solution-selling and value-based. SAS is also trying to get customers to focus on incremental projects – doing a single phase, getting a return from that, and then investing that return in a subsequent phase – while also educating the c-suite on the meaning and value of analytics.
OnDemand solutions are growing with 34% revenue growth with 33% new customer growth also. Particularly strong around hosted Fraud (true Decisions as a Service delivering fraud decisions) as well as analytics and customer intelligence moving towards hosted solutions too. Partner strategy is going well with Accenture and Teradata being particularly strong with Deloitte and Capgemini also doing a lot with SAS.
The competitive landscape is evolving, with more and more competitors saying they have analytic products and solutions. With market consolidation and much more marketing of analytics the “pond” is much bigger so SAS no longer dominates the same way it used to. Nevertheless they feel they have a strong differentiation. Investments for 2011 include customer intelligence, healthcare and utilities practices and more headcount across the board.
Russ Cobb followed to talk about Marketing. SAS, like anyone in analytics these days, must differentiate itself from an increasing array of analytic solutions and products. It must also align the resources it has and focus on the right markets. In an increasingly complex ecosystem, many companies appear as both partners and competitors.
SAS works hard to be customer centric – putting the customer’s business problem at the center and then showing how SAS adds value. But SAS is not the only player in these conversations – there is a whole ecosystem. This includes consulting/SI partners from Accenture and IBM Global Services to smaller, more specialized ones as well as software companies both database vendors and application vendors. Finally there are hardware and IT outsourcing companies. All these participants are essential to successful sales and SAS tries to build the relationships it needs to make this work.
Working with consulting vendors ranges from traditional relationships to managed services and co-development. Working with software vendors falls into the high performance computing initiative – in-database analytics, grid enablement etc. Mostly this is work with the database vendors. Working with application vendors involves making it easier to add complementary analytic applications to existing installations. IT relationships involve thinking about infrastructure modernization, analytic appliances and outsourcing. Modernization involves partnering with those hardware vendors to help keep SAS customers moving to new hardware and operating systems versions etc. Working with outsourcing contracts is a necessary evil while SAS is aggressively pursuing analytic appliances.
SAS is focusing more on partnering going forward. They are trying to be most systematic and focused, more global, more holistic with the whole business involved. They are measuring things like the amount of new license revenue that involves a partner (27% up from 24%) and top 50 deals involving partner (29 up from 22). For instance top 50 deals at RBS involved Teradata and Capgemini, BofA involved IBM and the Financial Risk Group, Barclays involved Deloitte etc.
Obviously Accenture is their top global partner as announced and this partnership has been going for over a year. Their joint pipeline for 2011 is 2x the 2010 pipeline at $100M with some key deals closed in 2010 (including some Accenture managed service platform deals) and multiple launched offerings.
Teradata is another key partner. Lots of joint work but also some competitive issues as Teradata and SAS expand into the same application areas. That said, the work around the core technologies is continuing to go well. 2010 revenue from joint programs was over $23M, up over 80% relative to 2009.
From a market development perspective they are working on identifying new “white space” opportunities while optimizing existing campaigns and pushing for 30% partner impact.