SAS Institute Eyes the Big Data Market

COMPANY: SAS Institute



2011 REVENUE: $2.73 billion, privately held

CEO: James Goodnight

WHAT THEY DO: SAS Institute is the industry's largest remaining independent vendor of business intelligence and analytics software, and is best known for its deep expertise in statistical analysis.

The Pitch

Despite the long tenure of CEO and co-founder James Goodnight and SAS Institute's steady sales -- even during the recession -- Goodnight doesn't like to run the company on autopilot.

"We try to keep our horizon at about two years," Goodnight says. "We like to stay flexible so if something new like an iPad comes out, we can turn very quickly. Right now we have the next two years pretty well mapped out."

The sheer breadth of SAS' catalog of business intelligence (BI) products is a competitive advantage, forcing rivals "to show that they have enough pieces in the toolkit to meet the needs" of a given customer or project, says analyst Curt Monash of Monash Research.

In addition, SAS has recently embraced hot technologies such as in-memory processing and the Hadoop open-source programming framework for crunching large data sets.

The Catch

SAS is facing some competition in the statistical analysis field from R, an open-source language with roots in academia but a growing commercial product ecosystem as well.

There is a new generation of statisticians who have been raised on R, and they may go to work in companies that have no legacy SAS systems, says Forrester Research analyst James Kobielus. "SAS will have an uphill battle appealing to those kind of greenfield opportunities with their current pricing structure."

Goodnight is unfazed. "We do support R. Anyone who wants to launch an R application from within SAS, we do support that," he says. However, "one of the keys to our success is we're not just a tools provider. The majority of our revenue is [from vertical] industry solutions."

While SAS' broad product line is a strength, it may behoove SAS to rationalize its vast portfolio and to make licensing it simpler, says Kobielus. "Some customers say it's too complex."

It's difficult to get rid of a product "once you have a few hundred customers using it," Goodnight says. "I don't think it's going to get any simpler." SAS may look to do more cataloguing by industry, though, he adds.

The Score

1-800-Flowers has been using SAS Enterprise BI Server, the software vendor's flagship product, for about 10 years, says CIO Steve Bozzo. The flower delivery broker already used SAS to run sales and services reports, and it recently finished a project creating analytic reports for the merchandising department, Bozzo says.

It was a fairly easy job, since the data marts had already been built, and within a few months 1-800-Flowers created 10 new reports that the merchandising staff found very helpful in managing their business, he says. Now the department can see how quickly sales are completed in real-time, instead of the next day, he says.

SAS has been a hands-on partner for the flower distributor, helping to develop power users who can handle the system without IT involvement, Bozzo says.

Overall, SAS provides 1-800-Flowers with a "huge competitive advantage," he says, noting that speedy data analysis is especially important for a business that is prone to tenfold spikes on certain holidays. "Making sure you're reacting to everything in real-time is absolutely critical."

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