What Would You Do?

SAS World Headquarters, Cary, North Carolina

SAS (pronounced “sass”), which is short constraint when you’re working with a
for Statistical Analysis System, began tool this sophisticated is the user. If you
when it set out to create statistical don’t have a rocket scientist sitting
software to help agricultural researchers behind the desk, it doesn’t matter what
who were studying the effects of soil, you have running on the desktop.”
seeds, and the weather on crop yields. In Second, SAS products are expensive,
1970, researchers had to write new starting at $1 million for industry specific
computer programs every time they products (i.e., banking or retail),
analyzed data. SAS standardized that followed by subscription renewals that
process and made it faster. Because the are 20 percent to 30 percent of the
statistics faculty who wrote SAS needed purchase price. Although SAS spends 22
to generate funds to cover the expiring percent of its revenue on research and
grant money that paid their salaries, development each year, larger firms are
they started leasing SAS to universities buying business intelligence companies
and pharmaceutical companies. By 1976, to compete directly with SAS. SAP paid
they had 100 customers. However, it $6.8 billion for Business Objects, and
wasn’t until the first SAS Users Oracle paid $3.3 billion for Hyperion. The
Conference later that year, when 300 largest threat may come, however, from
people showed up, that they realized IBM, which paid $4.9 billion for Cognos
their business opportunity. As and $1.2 billion for SPSS. IBM combined
you tell people now, that was pretty those firms into its business analytics
much the ‘aha” moment.” group, which will employ 200 scientists
From website traffic, to credit cards and 4,000 consultants and analysts.
replacing cash, to genome sequencing, Industry analyst Bill Hostmann says, “It
to sentiment analysis (analyzing every will be a dogfight. SAS has never faced a
tweet, blog, and discussion group competitor like IBM.
comment about your company and its And I do think IBM sees SAS as a big,
products), the amount of digital data fatted cow.”
that a company has to go through is With competition intensifying, SAS is
increasing at exponential rates. As a shortening its product development
result, 79 percent of Fortune 500 cycle from 24 to 36 months to 12 to 18
companies use SAS. Shell Oil uses it to months. Change like that can’t be
analyze data to predict how long the achieved without attracting and
pumps will run on its North Sea oil- retaining a highly motivated workforce.
drilling platforms. Kohl’s department That’s increasingly difficult with tech job
store maximizes profits by using SAS to openings up 62 percent and a 22 percent
analyze which products to mark down average turnover rate in the software
for sale. Credit card companies use SAS industry. That’s why Google gave all of
to reduce fraud by identifying unusual its employees a 10 percent raise and a
credit card purchases in real time. $1,000 bonus.
Finally, telecomm companies offer great Questions:
deals to customers who, via SAS, they’ve
So, the first step in maintaining your
determined are more likely to switch to
competitiveness is figuring out what
competitors.
motivates people to join a SAS. Second,
Although SAS has been profitable
getting people to join SAS is one thing:
every year since inception, there are
but how do you get them to work hard
threats to its highly successful business
and maximize their efforts? Should you
model. First, says Gareth Doherty, an
be egalitarian and pay everyone the
industry analyst, “Most organizations
same, or should you closely link pay and
aren’t in a position to be able to leverage
performance? Finally, how do you get
some of the sophisticated applications
your most talented managers and
that SAS offers because the No. 1
software engineers to stay? Does SAS
 May 2011); D. Chow, “For SAS, Asia Presents Risks and Potential,”
need to “go public” like its competitors Wall Street Journal, 21 November
and issue stock and stock options to its 2010,
http://online.wsj.com/article/SB10001424052748704170404575623
employees? Or are there other ways for 952475539676.html
SAS to reward people and remain (accessed 4 June, 2011); M. Hartley, “Business Software’s ‘Cadillac’;
‘Tough Times are Good Times for
competitive in the talent market? Analytics,’ SAS CEO Jim Goodnight Says,” Financial Post, 17 July 2010,
3; D. Kaplan, “THE Best Company TO Work For,” Fortune, 8 February
If you were in charge at SAS, what 2010, 56–64; R. Lane, “Pampering the Customers, Pampering the
would you do? Employees,” Forbes, 14 October 1996, 74–80; S. Lohr, “SAS Tests Its
Business Intelligence; Top Software
Sources: Jessica Guynn “War heats up for top Silicon Valley talent” Company Confronts New Threat from Heavyweight Rivals,” The
Los Angeles Times, 10 November International Herald Tribune, 23
2010, http://articles.latimes.com/2010/nov/10/business/la-fi-silicon- November 2009, 16; A. Ricadeloa, “IBM vs. SAS: The Battle over Data
pay-war-20101111 (accessed 23 Analysis Software,” BusinessWeek Online, 30 November 2009,
http://www.businessweek.com/technology/content/nov2009/
tc20091129_192266.htm (accessed 4 June, 2011).
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