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SAS, the worlds largest privately held Software Company in the world with profits over 1.7 billion US $ per year produces data mining and analytic software that allows companies to gain essential intelligence from their transactional systems. They are quite a big old established player in the growing Business Intelligence space.
For years Jim Goodnight has mocked the banes of the “public companies” basking in the benefits of being a privately held company. I will hold my tongue on the current private vs. public debate -there are issues on both sides and what with Sarbanes- Oxley and all the recent hiccups with public technology companies (Dell ‘s accounting mishaps, Apples options mess, and HP’s recent woes) the system is broke, but is going private going to fix it? I am not intelligent enough to address that in this article so I will stick with what I know.

Now Jim Goodnight has gone on record chastising anyone taking over the company, but let’s just look at the prime suspects and see what is possible.

Oracle, SAP and IBM.

Oracle- Oracle seems focused on their applications market, plus their public “tango” with SAP. Also Goodnight has never been a public supporter of Oracle and privately has voiced disdain after the much publicized Andre Boisvert entrance and exit from SAS 5 years before.

SAP- SAP is a different animal and does not share the same development theory that Dr Goodnight does. Goodnight has stated “Customers of SAP are used to waiting four or five years for something but we listen to our customers and deliver what they want”. SAS has a priority in R&D with over 24 % of their total revenue devoted to that initiative. A SAS and SAP cultural fit is not in the works and one thing we do know- Goodnight does care for his “family” on that Cary campus, and make no beans about it, since this is no “fire sale”, I couldn’t see him making that kind of move to jeopardize his “family”.

So, who’s’ left? IBM. While not being obvious, IBM has a strong presence in the research triangle, where SAS is located. SAS has always modeled certain aspects of their business off the big blue footprint, everything from partnering to sales training, VARS etc. Goodnight seems to hold IBM in some esteem and acknowledged their leadership in the information management space some years ago stating that he doesn’t see that changing in the future. He also likes the IBM pedigree on resumes that come into SAS, where you’ll find alumni from the big blue in Cary.

However SAS is quite the “odd bird” in the technology space. Having spent over 4 years in this interesting company, I can speak firsthand to the idiosyncrasies. Goodnight has gone on record for his lack of knowledge around the sales aspect of his company- he has stated recently “I've never paid much attention to sales and marketing until maybe the last four or five years”. If you have ever worked for SAS in the sales capacity you will know that he views sales as a “necessary evil” having convinced himself that his applications sell themselves. Heck SAS has only been a direct sales organization for the past 6 years, before that sales efforts were all handled via phone from Cary.

So where are the clues to these rumors?
Seems like SAS is getting their finances in order, spending some time and money making it look like a public company- if it walks like a duck and sounds like a duck…..
Leaders are leaving but not being replaced. Early this year Kelly Ross, the long time SAS sales VP was terminated, but Goodnight reported that she would not be replaced.
SAS has always had a hard time handling its sales organization, and rightly so- it is NOT a sales organization. Goodnight is a PHD statistician and incredible developer. However, if you have ever taken him out on a sales call you would know the extent to his salesmanship. This lack of sales savvy has cost him, as he has made sure his sales staff stays mediocre; despite many opportunities otherwise. Guess he has seen how “large” sales leaders can penetrate a company, and make no beans about it, SAS is his company.

Talent drain. While all companies have it and attrition tends to run 12-20% in the technology sector, SAS has always been much less. Having worked there I would question their 4-5% turnover rate- at least I knew it was double that in their sales division and for the “orphans” of SAS (those who do not work at the Disney land corporate headquarters in Cary). The “orphans” that were not privy to those incredible benefits you read about in every Fortune magazine “Best Company” to work for edition, do not benefit from the mucho benefits of their Cary counterparts- child care, onsite medical or mega fitness center etc etc etc.
But I digress, the Talent drain such as good people like Gary Young, their Manager of Sales Readiness for Performance Business Solutions, are slowly sneaking out the back door. Not only that other sales and support people are being laid off, or simply leaving. Not in any formal “contact the presses” direct way, but divisions are being eliminated and people are getting severance packages. Heck that is how I and others I knew broke free from SAS……

Succession. Jim Goodnight is the last of the Goodnight’s to run SAS. Or so it seems. He has children, but none that are interested in running the billion dollar company. Inside succession is not defined, as the players are not savvy enough or proven to even take on the challenge, and for good reason. It is Jim Goodnights company- period.
The R&D team. Long a big stable of talented individuals in Cary, Good night is following the IBM example of off-shoring; adding more developers in China and India. SAS has never really had a global R&D team as a privately held company, but as a public contender that is a big plus to an organization such as IBM that has such a strong global presence.

So what is the verdict? Guess we’ll have to wait until next year, as the rumor mill has it that it will be announced in early 2007. And then again Dr Goodnight took some heavy steps towards organizing for an IPO a few years back and essentially changed his mind as the market took a dive. So the intelligence is there, but in SAS’s case, the odds are in the doctor’s favor……

Hope Blaythorne
Techslog Editor
hope@techslog.com