Relentless growth in data – from the current challenges in the mortgage industry to helping telecommunication firms offer more services – means continuing growth for SAS, executives said Tuesday.
Chief Executive Officer Jim Goodnight told media gathered for the software giant’s annual media day that SAS is on track to top $2 billion in revenue for the first time.
“We expect in excess of $2.1 billion for 2007,” Goodnight said. That’s approximately $200 million more than what the company reported in 2006. SAS is privately held, and Goodnight didn’t disclose specifics about profitability. Executives reiterated , however, that the company has been profitable every year.
The continuing woes in the mortgage industry could, in fact, mean more business for SAS as companies seek ways to better mine data for potential problems.
“I think the worst is behind us,” Goodnight said of the home finance challenge. But Jim Davis, SAS’ chief marketing officer, added about more challenges: “Bring it on.”
The swelling amount of data has companies wrestling for ways to “harness” IT “for decision-making,” Davis added. But companies can be overwhelmed by information. Davis noted that by 2010, the amount of data will be “doubling every few days” rather than at its current pace of about every 11 months or so.
As data grows, so does opportunity for SAS. In a later interview, Davis said that Goodnight’s $2.1 billion estimate is likely to be low.
“That’s being conservative,” he told WRAL Local Tech Wire. “I’m hoping it will be more than that. If I had to guess, I would say between 12 [and] 14 percent.”
To help boost sales, SAS has been more proactive in partnering with information technology service providers. The company has also expanded its product offerings to increase their appeal to smaller businesses. SAS also continues to roll out new products based on interviews with customers and prospects about specific problems they need to have addressed.
Among the latest offerings is a package to help telecom service providers better price and package service offerings.
Increasing demand for SAS software in the retail sector to greater market penetration overseas have boosted revenues as has the value of the dollar, which has plunged, Davis said.
“If you look at the value of the dollar, the fact that it is as low as it is today, we’re actually going to see very, very healthy profitability since 55 percent of our business is outside of the United States,” he explained. “Many of our contracts were locked in when the euro, for example, was 1.25 to a dollar. Now it’s 1.40. On a 10,000-euro contract, that adds up to more dollars.”
Davis also pointed out that in past years, SAS has made most of its sales in the fourth quarter, which is just beginning. “We are exceeding our targets. Invoicing on sales through the first half of the year were up 16 percent. That’s unusual for us. We’re lucky if it’s 10 percent.”
SAS also relies on renewals of its software licenses for 70 percent of its revenue, Davis added, but he then noted that new sales are on the increase.
“We’ve got a lot of activity that is guaranteed through renewals and a lot of new business,” he said.
In his overview, Goodnight noted that SAS business breaks down to 45 percent in the Americas, 45 percent in Europe-Middle East-Asia, and 10 percent in Asia Pacific.
While financial services still dominates in revenues (40.8 percent) followed by government at 14 .4 percent, Goodnight pointed out that sales in retail jumped to 3.9 percent from 3 percent.
“It’s a small segment, but really fast growing,” Goodnight said. “We’re seeing a lot of interest in developing specific solutions.”
Asked about retail later, Davis echoed Goodnight’s remarks.
“Retail is our fastest-growing sector,” Davis said. SAS is offering a suite of products designed to help retailers improve merchandise ordering and stocking as companies search for ways to deliver products consumers want and to dispose of unwanted inventory.
While 55 percent of SAS revenue comes from data integration, 27 percent now comes from higher-end analytics as SAS continues to build on its reputation as a global leader in business intelligence.
While the bottom line continues to strengthen, Goodnight seemed to take special pride in awards given to SAS for its workplace environment.
“We’re not only a fast-growing company, but we also are known as a great place to work,” he said. Goodnight pointed to a chart that listed a variety of awards from Computerworld, Fortune and even the Great Place to Work Institute in Europe.
In an increasingly competitive global marketplace where SAS has to recruit employees worldwide to augment its 10,000-plus work force, Goodnight said the awards help the company.
“It’s an incredibly good benefit for us,” he explained. “We get 50,000 applications a year in the United States for 500 or 600 jobs. We get the choice of talent that is available. The workplace helps us because the best and brightest want to work for us.”
