Former SAS President Has Few Kind Words for Goodnight, Sees No IPO
Editor's note: Each Friday, Local Tech Wire goes in search of executives and other people who have played prominent roles in the region's IT industry. Today, Andre Boisvert recalls his brief tenure at SAS and his conflicts with Jim Goodnight. For 14 months, Andre Boisvert was CEO Jim Goodnight's right hand man at SAS Institute; ostensibly there to prepare the world's largest privately held software company for a public offering. A former Oracle executive, Boisvert had the kind of public company experience Goodnight said he was looking for. But as the length of his tenure in the executive suite suggests, it didn't work out.
Boisvert left the company a year ago believing Goodnight was not committed to going public (For the record, SAS says it will not go public this year -- and that a survey shows 87 percent of employees don't want the company to go public. But company officials say the firm is still committed to exploring the idea.) Boisvert is not shy about discussing his time at the Cary-based developer of data warehousing and data-mining tools.
What are you doing now?
I'm chairman of Sagent Technologies (SGNT), a software company, and I've joined the board of a holding company in Denmark, Corporate Applications Service, that owns professional services companies and just launched a major product with Microsoft. I'm also on the advisory board of venture capital fund iBelay in Boulder, Colo., that Bill Glynn (former partner at Morrisville's Southeast Interactive Technology funds) is involved in. I really don't want to join another fund. It keeps you too busy. I'm also chairman of Slickedit, which develops an application editing too. Five of us started it 14 years ago. My wife is the CFO.
How would you describe the months you spent at SAS?
It was very interesting. There were two philosophical differences Goodnight and I couldn't bridge. One is equity. I'm a strong believer in equity driven companies. Look at at Microsoft, SAS and Oracle; Bill Gates became richest man in world, by creating 24,000 internal millionaires. He does over $2 billion a month. The second richest man is Larry Ellison (Oracle CEO). He created 10,000 internal millionaires. My issue with Jim is that he's created two billionaires and you don't see the same fire in their (the employees) bellies that I did in the other organizations. And the proof is in the pudding. He does less than $100 million a month (in revenues.) Larry does in month what Jim does in a year.
What was the second difference?
If you are bringing a company public, the fact that it's rated one of greatest places to work is not relevant if you can't tie it into growth rates. There are two ways of changing that. One is too have a more aggressive sales force, which you get with equity driven employees and the other is partnerships. Siebel Systems is less than half the age of SAS and is 2 ½ times the size. That's because of partnerships. Goodnight squashed every single partnership offer. He said, "We can do everything.''
Could he still be planning to go public?
Underwriters want employees and executives to have stock options in the company since they clearly recognize that a motivated internal workforce will do everything to keep expenses down and the top line growing which are the primary ingredients in determining a stock's value. Goodnight didn't want to sign the ESOP papers. In addition, stock options lock up the company's talent from simply walking away and working for someone else. And besides, SAS is still an S Corp. (a type of incorporation status). You can't take that public. They still have to install SEC compliant software accounting, although they have started that. They need a board of directors. Shouldn't you have an underwriter? There is no official underwriter. Frankly, I don't think there is any plan to go public.
While you were at SAS you helped spinout iBiomatics, a company that developed software to help the pharmaceutical industry track drug development. Were you disappointed to see the company spun back into SAS late last year?
Yes, because the poor employee who had put in 17, 18, 20 years of service hoping to capitalize (on a stock offering) to subsidize retirement and now it's gone. We decided to have the employees officially resign from SAS. We put it to a vote. Only one person said no. Everyone else came over. These employees were willing to leave SAS and risk everything for equity.
You were involved in Southeast Interactive Technology Funds as an investor. What's going on with them?
Southeast is trying to save its portfolio. They're in maintenance mode. I can't complain because we made lots of money on Opensite and Accipiter (two local technology companies sold for $542 million and $55 million respectively.)
How do you feel this area will do as the economy improves?
I think the (tech centers) that are weathering the storm the best are Austin and ourselves. Some will disagree, but when you compare the cost of living in Austin or Raleigh it is less than the D.C. area, Boston or California. A severance package goes a lot farther here. More and more talented people here are grouping together, starting or helping smaller companies who couldn't afford talent a half a year ago. In some cases people are doing work for equity or a small salary or a deferred salary. You can do it because of the cost of living. The talent can survive on severance and small companies starving for venture capital don't have to raise as much or can bootstrap because they've get some of these talented individuals.
Some of your work takes you outside this area, will you stay in Raleigh?
I'm your typical Canadian. I'm mortgage free. I've got long-term investments and I love the area. I love the potential it's got. In 1995 (after leaving Seer Technologies, the company that brought him to Raleigh) I could have cashed out and left. I fell in love with the area. I invested in community via Southeast.
Have a suggested person for "In Search of?" Send it to Managing Editor Rick Smith (rsmith8@nc.rr.com.)
Copyright 2012 by Capitol Broadcasting Company. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.
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