New York, Dusseldorf At SAS, one thinks more of aviation than artificial intelligence. But the US company with this abbreviation has nothing to do with the Swedish airline. In this case, SAS stands for the formerly full company name “Statistical Analysis System”. Again, that doesn’t sound particularly modern, but the company is a pioneer in an IT area that could hardly be more important today.
Machine learning and artificial intelligence (AI) have made tremendous strides in the past decade. Whether cars learn to drive, machines maintain themselves or banks uncover fraud: in times of information overload and disruption, AI becomes indispensable. “She’s the eye and ear for businesses,” said Bryan Harris, chief technology officer at SAS.
As important as AI is, SAS is unknown. The North Carolina-based company is only a common name among experts. His “intelligent software” has been used for more than four decades by currently 1700 companies, most of which come from the financial sector. Banks and insurance companies account for 43 percent of the total sales of $3.2 billion in 2021. Germany is one of the three most important foreign markets for the company.
Top jobs of the day
Find the best jobs now and
be notified by email.
But compared to new competitors like Databricks, SAS looks like a wallflower: “SAS has let the train pass by a bit, is stuck in tradition and old ways of thinking and structures,” says Alex Seeliger, analyst at IT service provider Barc.
SAS has long been too closed and reserved. This can be seen from the growth in sales. In 2012, SAS already achieved almost 2.9 billion dollars. In a boom decade for AI and technology, the company increased revenue by just over 10 percent. The young competitor Databricks increases sales by around two thirds – annually. Just a few weeks ago, the start-up exceeded the one billion dollar sales mark for the year.
“SAS is under a lot of pressure from newcomers, and there are many new providers in the field of AI in particular,” says Boris Evelson, an analyst at market researcher Forrester. In addition to Databricks, the new competitors also included C3AI, Datarobot and Palantir.
dr Goodnight thanks
Now in its fifth decade, SAS aims to accelerate growth and modernization. The company plans to go public in about two years. SAS can hardly do otherwise. The company is voted one of the most popular employers in the USA again and again. But in order to attract young employees and compete with startups, developers need financial incentives. Stock options issued today could be valuable in 2024: experts expect a stock market valuation of 20 billion dollars for SAS.
The 79-year-old founded SAS with partners in 1976 – and still runs the business today.
This is accompanied by a culture break for the more than 12,000 employees. It marks the departure of founder Jim Goodnight, who still runs the business today. While it’s not uncommon in the US to address CEOs by their first names, internally the 79-year-old is reverently referred to as Dr. called Goodnight. The statistician worked on the Apollo program for the moon landing, then went to NC State University as a researcher. In 1976 he founded SAS to optimize agricultural yields.
Goodnight has lived on the company premises for decades, driving an old Buick Estate with wood panels on the side for a long time. To date, every SAS employee has an individual office, even interns. “How are you supposed to concentrate in the large area?” Goodnight justifies. As early as the 1970s, SAS set up a company kindergarten, long before it became fashionable at Microsoft and Co. Goodnight said, “Because it was the best thing for the employees.” A 35-hour week, which is unheard of in the United States, has long been taken for granted.
Cloud migration is late
However, the pace and daring were somewhat lost. Example clouds. Just a few days ago, SAS announced that it would offer its flagship software Viya in the cloud in cooperation with Microsoft’s provider Azure. Customers need so less hardware, the software is more easily accessible and always up to date. SAS chief technologist Harris estimates that annual sales can be increased by 100 million dollars.
The term “migration” in technical jargon comes far too late, for Silicon Valley competitors the cloud has been a matter of course for many years. Analyst Seeliger describes them as “overdue” at SAS.
The head of technology at SAS wants to make 100 million dollars more in sales every year with the cloud.
(Photo: obs)
The great strength of SAS: What the company starts is not an ill-considered hasty shot. Although the cloud migration is coming late, the offer is so good that the cloud provider named Azure SAS 2022 as a premium partner. “That’s quite an award,” says analyst Seeliger. This was previously granted to competitor Databricks, among others.
Flagship customer Georgia-Pacific
The example of Georgia-Pacific shows how SAS software is used. The paper manufacturer got into trouble in the spring of 2020. During the corona pandemic, people bought toilet paper, and the world’s largest paper manufacturer had to drastically increase production overnight. At the same time, demand for paper products from hotels and other large customers fell.
With the help of SAS software, the US company was able to increase the productivity of its 150 factories by ten percent, reports Steven Bakalar, responsible for digital transformation at Georgia-Pacific. “It helped us get more products into stores. The reward for the effort: not only higher productivity, but more flexibility and 30 percent less “unplanned maintenance times”.
A success story that SAS is happy to tell. But the competitors don’t sleep. “When SAS was founded, only large corporations could afford the necessary computer power for complex data analysis,” warns Forrester analyst Evelson. “Today, any garage start-up with cloud access can compete with SAS for individual solutions.”
More: 38 billion start-up Databricks wants to go public – and open new offices in Germany.