Jim Goodnight, chief executive of SAS Institute, doesn’t mince words. During a Nov. 10 talk at the Churchill Club, a gathering of Silicon Valley business people, the head of the closely held software maker disparaged Wall Street analysts, questioned the value of marketing staff, and told a joke involving Bill Clinton and the Pope that some people of faith might have found offensive.
Goodnight is equally blunt about his competitors in the $9 billion market for data analysis software. In the past two years, IBM, SAP, and Oracle have bought companies that compete with SAS in providing software that can predict trends, identify profitable customers, reduce risk, or shave costs. Goodnight views the mergers as a chance to make hay. “We always look for any company that’s acquired to be messed up for a year,” Goodnight says in an interview.
Goodnight and the rest of SAS will need to keep backing up the bold talk with results. The company has held up well during a recession that crimped rivals’ growth. At SAS, sales this year will be unchanged from 2008, when they stood at $2.26 billion, according to Goodnight. Profit may decline by 4 percent. By contrast, revenue at German software giant SAP is expected to decline by 8 percent this year, and for Oracle, the large U.S. business-software company, sales slipped 1 percent for the 12 months ended Aug. 31.
SAS specializes in software that helps companies extract insights from growing volumes of data. That’s attractive because it is expanding even as demand for other kinds of software, such as applications that streamline business processes, has declined.
SAS Products Are Deeply Embedded
SAS’s growth comes partly because it can charge premium prices for its software, which lets statisticians predict future scenarios based on historical data. Versions of SAS products tailored for specific industries can…