Over 30 industry analysts gathered to hear SAS executives highlight the privately-held business intelligence (BI) and analytics software supplier’s continued financial stability, steady realignment from a tools business to a solutions model, and a new platform focus intended to expand the target user base for its BI and analytic software.
CEO and President Jim Goodnight, kicked off the event with a positive outlook on IT spending, in particular BI software. The outlook for enterprise software business is more positive this year…rising on average 5%, with BI software rising 11%. Goodnight proceeded to outline a three-pronged strategy for taking advantage of the key market trends and opportunities based around an ‘intelligence’ vision, people, and new and enhanced technologies and solutions.
While revenues for the Cary, North Carolina based SAS rose 4.4% last year, representing SAS’ 26th consecutive year of growth, Goodnight remained unfazed about declined profits Profits are down from last year, but we’re not restricted by Wall Street to return profit growth every quarter. Nevertheless, Goodnight confidently expects double-digit growth this year and says that the company has been busy hiring to position itself to take advantage of the key trends and opportunities in the market.
We’ve increased our staff by 8%, most of whom were added to bolster our direct channel. Goodnight also hinted at further acquisitions. We acquired two companies last year and are negotiating with another software company at this very moment. Chances are that SAS will target technology that complements its supply chain or CRM analytics solutions.
Jim Davis, SAS’ chief marketing officer picked up from Goodnight saying We definitely had a banner year last year with our 26th consecutive year of growth and profitability…and have never taken a dime of investment money along the way. Additionally, Davis dismissed an IPO anytime soon, anticipating the now perennial question as to when Goodnight would yield to pressure to publicly float the company. Software companies and public markets do not make for an easy marriage at the moment.
On the technology front, Davis pointed to a steady shift in SAS’ customer base from tools to solutions. We’ve seen customers with 15 or 20 SAS products now consolidate these into an integrated SAS solution. Davis said that SAS will continue to align its 100 or so component software products into horizontal and industry specific applications or solutions.
At the same time however Davis said that it would continue to advance the development of a pure infrastructure platform. The biggest technology announcement in this area by far was around SAS 9.0, the latest generation of the company’s analytic platform, which was introduced to early adopters late last year and is now generally available. The new version – which Davis bills as a comprehensive platform for developing and implementing a number of BI and analytic applications over time – includes an enhanced extraction engine, a reporting suite, a threading kernel under the core analytics engine, and an updated common metadata management server.
Davis also said that version 9.0 also evolves the platform to address a wider user audience beyond SAS’ traditional power user and analyst niche. To this effect, SAS is working on a new technology – codenamed ‘Project Citation’ – that will provide a new BI interface to appeal to the masses of business users. Citation is designed to enable a wider set of users to exploit our core decision engine in a more effective way…including integration with commonly used desktop tools such as Microsoft Office, Davis said.
SAS plans to formally announce Citation at its user conference next month. [Project Citation] will be better than Cognos or Business Objects…we’ll price it so aggressively that there will be no reason not to look at SAS as a true end-to-end BI and advanced analytics platform.
SAS’ move towards what Goodnight calls the low end of the analytics market is late, but understandable especially since it has watched established BI players generate immense revenue streams simply by targeting their OLAP and query and reporting tools at a wider set of business users.
Surprisingly, SAS made little mention of its forthcoming SAS 9.1 platform, due for release this summer. SAS officials had earlier claimed that the pending version will feature support for Web services standards (SOAP, UDDI, and WSDL) in addition to its existing XML capabilities and also add an n-tier architecture, an improved role-based BI portal, support for staged rollouts, and parallel data access engines.
Turning to the solutions arena, Davis said that SAS will focus on three areas: driving forward its newly launched supply chain intelligence practice (which the company first announced last month at a supply chain conference in Amsterdam); integrating cost management software acquired from ABC Technologies across all its existing solution suites; and evolving its core strengths in CRM analytics towards marketing automation, marketing optimization and interaction management based on its previous Verbind and Intrinsic technology acquisitions.
Davis also said that SAS will spend a lot of time this year on developing industry-specific data models for industries such as banking and telco. These are not intended as black box applications…but frameworks for pushing out industry specific analytic solutions. Davis also stressed the need to bring SIs up to speed to implement SAS solutions, an area where SAS has admittedly been slow to address. Since over 95% of our revenue comes from software, the software dollar is more valuable to us than consulting dollars.
On the partnership front, Davis also announced an expansion of SAS’ alliance with IBM for developing industry solutions. Significantly, IBM will now position SAS’ Enterprise Miner product as the data mining tool of choice over its own Intelligent Miner tool, according to Davis. The move is part of an overall consolidation of IBM’s BI partnerships; and perhaps signals IBM’s first step away from the data mining software business. Additionally, SAS and IBM will also work together to define the emerging PMML (predictive model markup language), as an extension of XML.
Asked by one analyst to elaborate on its current relationship with Siebel Systems Inc – which has been thorny ever since Goodnight was publicly quoted as calling Siebel’s CRM system as a 10 million dollar rolodex – SAS officials did not hold any high hopes of working closely with the company, in the near term at least.
Source: Computerwire