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By Rick Smith, Local Tech Wire editor
CARY, N.C. – has ‘weathered the storm” is preparing for growth in 2010, including an increase in headcount, the software giant’s executive vice president tells Local Tech Wire and WRAL.com.
In an interview Thursday morning on the same day SAS was named the best place to work by Fortune magazine, Jim Davis said SAS will be adding people as it gears for new product launches. Earlier Thursday, SAS disclosed that it grew revenues by more than 2 percent in 2009 despite the global recession to $2.31 billion. That’s the 34th straight year SAS has increased sales – every year since its founding.
“It’s a big day,” Davis said proudly “How often do you get a one-two punch like this?”
Buoyed by the revenue news and the fact that SAS was again profitable (he wouldn’t say by how much – standard operating procedure at the privately held firm), Davis spelled on an aggressive agenda for this year.
“We are adding people in high priority research and development areas,” Davis said. “We are adding new product lines and we need people with the right expertise to develop and represent those.”
SAS increased U.S. headcount by more than 1 percent in 2009. “I think we’ll continue to do that this year,” Davis said. “We’ll continue growth. In years past we have grown at 5 to 6 percent a year, but that’s not happening.”
However, SAS also has to be prepared to add people where needed, he added.
“We have to be where the action is,” Davis said. “Places such as China and emerging markets. Fortunately, we are in a good cash position and can invest.”
Analytics Now a “Boardroom Decision”
The hottest products for SAS utilize business analytics – analysis tools that help companies and governments better understand their own data, project sales, identify costs, fraud and other abuses.
“If the economy has a silver lining – and every cloud has a silver lining – the silver lining for us is growing awareness in the marketplace of what analytics can bring to bear,” Davis said. “That momentum we have built and the education a lot of people got the hard way from the economy will carry forward strongly in 2010.
“What business analytics brings to bear is fact-based decision making. It brings guidance that is a bit more focused and is trustworthy rather than gut-level decision making.
“This trend has really moved up into the boardroom. It’s no longer an option. The question is not ‘Are you using analytics?’ It’s ‘How are you using analytics?’
“Even if the economy becomes just wonderful in years to come, we’ve seen a permanent shift.”
Davis pointed out that 93 of the Fortune 100 companies are SAS customers.
Sales, Not Cheaper Dollar, Drive Growth
SAS also increased its revenues the old fashioned way – by sales, not by currency exchange rates. Davis found that fact to be especially encouraging.
“The dollar did not drop as far as we thought it would, especially against the Euro,” Davis said. “Since most of our sales are in Europe-Middle East-Africa, we worried we would make our numbers through exchange rates. I don’t like an external factor having an impact on our sales.”
Focus and a Growing Pipeline
As the economy collapsed in 2008, Davis said SAS Chief Executive Officer Jim Goodnight and the management team analyzed the company’s own operations as a means of dealing with a global malady in 2009. That analysis paid off, Davis said.
“In all candor, we have a general feeling that we have weathered the storm,” he said. “2009 was the year we really had to dig down and find out what our core strengths were. Let’s be really focused on what we are really good at and apply that to the current situation.
“What we did was, we consciously changed the way we were educating people about our products and how we were positioning them. We highlighted how our capabilities would help people survive that economy.
“Our pipeline grew as a result,” he added. “We built up; we didn’t nurture. In the fourth quarter, we were generating new business and we found ourselves moving forward into 2010 with a good pipeline as well.”
SAS, which is privately held, doesn’t disclose specific financial information other than its overall revenues and how revenues break down by segment. Davis did say that 2009 was “a very profitable year for us” thus enabling the company to capitalize on growth opportunities.
The company avoided layoffs and also funneled more than 20 percent of revenues into research and development – a Goodnight-enforced standard.
No Sales Declines
By focusing on the strengths its analytics offered to all its clients and with a stable staff to support software and customers, SAS avoid sales declines in all segments of its business, Davis said.
While overall revenues grew 2 percent, sales in the retail sector where SAS stressed real-time inventory and sales benefits of analytics jumped 12 percent. The retail sector is growing at 4 percent of overall revenue.
Despite the financial crisis, spending by banks increased “just over 1 percent,” he added. The financial sector makes up most of SAS sales – 42 percent.
Government spending, which makes up 15 percent of revenue, increased 2 percent.
Sales by geography changed little with the Americas at 44 percent (U.S., 37 percent), Europe-Middle East-Africa at 45 percent and Asia at 11 percent.
Software sales also grew in 83 percent of the 120 countries where SAS does business.
SAS did add nearly 1,400 new customers last year, but 70 percent of its revenue continues to come from contract renewals.
With more than 11,000 employees, SAS currently has some 50 job openings. Its U.S. work force numbers 5,487 with most of those being located at its headquarters campus in Cary.
SAS also is preparing to announce several new initiatives in the near future, Davis said.
“We’re going to have major partner announcements in the next month or so, but I can’t say anything else right now,” he explained.
SAS is putting increasing importance on its channel and alliance sales efforts “from top to bottom,” Davis said. Major partners already include Accenture, Wipro Technologies and Deloitte. However, SAS is also adding smaller partners. “We realize that business analytics are important to most companies and there is a SME (small, medium enterprise) play,” he said.
According to SAS, 80 percent of new commercial accounts last year were businesses with revenues of less than $500 million.
Of SAS sales last year, alliance and channel partner deals generated 25 percent of revenues.
Partner also produced 50 percent of SAS’ largest 50 deals.