Wednesday, December 2, 2009

Kicking SAS?

Not if James Goodnight, statistician and CEO of the SAS Institute, has any say in the matter. Recently, the New York Times reported that the venerable software giant that created the statistical tool of choice for countless business statisticians for over three decades is under seige. New competition is threatening SAS's longstanding, comfortable position as the undisputed leader in business intelligence software.

This summer, IBM took a serious step into the business intelligence realm with their purchase of SPSS and Cognos. In a direct threat to the SAS reign, it has been widely reported that IBM intends to build a 4,000-person-strong business analytics and optimization group to provide global business support.

As the industry leader, SAS has not, upto this point, had to be concerned. In fact, SAS resisted integrating with the open programming environments and information transparency that has now turned their legacy world upside down. Free, open source coding, such as R, has been quickly adopted by academic institutions and labs, and SAS was slow to recognize the importance of this shift. Within a few short years, many graduating statisticians will be using R in the workplace, potentially usurping SAS's domination.

But SAS founder Goodnight is on the move. According to senior VP and chief technology officer Keith Collins, SAS has seen the error of it's closed-minded ways and is committed to engaging with the open source community. SAS has other strong assets that could help it maintain its dominant position in the market, including a loyal workforce with a turnover rate of just four percent. The company has worked hard to earn its reputation as a low-stress, family friendly workplace. Even despite recently reducing software development time from 24 to 36 months to 12 to 18 months, you would still be hard pressed to find an employee who has worked a 60-hour week more than two weeks in a row.

It will be interesting to see how the new strategies at SAS and the aggressive actions of its competitors will affect the rapidly expanding world of business analytics. Like Thanksgiving feasts on tables across the country last week, data and information have become the bounty of the business world. Businesses need flexible, agile tools to help them digest it in all ways that will keep them healthy and growing. To complicate matters further, static information of old - such as sales and operations data - needs to be combined with new, dynamic sources of information, such as social networking buzz, Web behavior and now easily accessible public records. Nervous yet, Mr. Goodnight?

2 comments:

Mike said...

A previous user of R, Minitab, SPSS, Cognos, SQL Server, S Plus, and countless Web Analytics software - I LOVE SAS.

I hope their exec team adapts to the changing analytics market and continues to deliver cost effective enterprise level analytic software.

harveybirdman said...

SAS pricing basically lost me as a customer as soon as I went solo. Instead, I invested some time in learning R, and now, I think I'm better off in the long run as well to stick with it.