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I recently attended the annual SAS analyst summit to hear the latest vr_bti_br_technology_innovation_prioritiescompany, product and customer growth news from the multi-billion-dollar analytics software provider. This global giant continues to grow its business and solutions to help with fraud prevention, marketing and risk. It lets users apply its analytic and statistical technology in practical applications for business. SAS can meet midsized businesses’ demand with packaging and pricing to ensure it is not seen as only affordable to Global 2000 companies. SAS’ growth in analytics should be no surprise, as our research finds analytics to be the first-ranked priority among technologies for innovating business.

SAS’ largest area of growth is in its business analytics and business intelligence tools. Its new SAS Visual Analytics product appeals to a vr_ngbi_br_importance_of_bi_technology_considerationsbroad range of business and analyst needs. The latest upcoming version blends data and visual discovery with powerful analytics. SAS is also addressing usability, the most important technology consideration according to 63 percent of organizations in our research. SAS uses in-memory computing against big data to help meet the advanced needs of organizations. Its eventual intent is to have Visual Analytics be the focal point of its business intelligence product direction. SAS Visual Analytics 6.2 is expected to be generally available in second quarter of this year; a trial of the product is already available. At the event the company demonstrated its capabilities on tablets such as the Apple iPad. After seeing the demo my only recommendation is that SAS provide more collaborative aspects and ensure that analysts can make observations and notations, which is a challenge with most of the business intelligence and analytics offerings in the market today.

SAS’ view of big data echoes our view that it is part of a larger portfolio of vr_bigdata_big_data_technologies_plannedbusiness technology for storing and loading data. SAS has invested significantly into its high performance analytics (HPA) architecture, which enables it to operate in parallel or embedded within database technology. SAS has focused on efficient processing for applying mathematics, and has devised multiple architectural approaches to adapt to existing technology, including Hadoop, and to ensure it can operate in the most efficient manner. Our big data research finds that a third of organizations plan to evaluate and adopt a range of appliances, in-memory and specialized databases and Hadoop in 2013. SAS’ approach is to embrace and integrate with a range of big data approaches.

For information management, SAS has consolidated the previous Dataflux brand into the SAS organization and unified its product vr_infomgt_information_management_initiativeofferings. This is an important move, as joint offerings can confuse potential customers, though everything was available from SAS. Beneath the marketing is a solid product line that provides not just data integration, though we assessed SAS as a Hot Vendor in our 2012 Value Index for Data Integration based on a methodical assessment. Unlike other analyst approaches that scratch the surface of review in 2×2 assessments, we look at range of manageability, usability, reliability and other categories that span a range of data related areas. Not as well-known yet for its integration with Hadoop and even SAP HANA, SAS is addressing challenges in big data integration that we are researching in more depth for 2013. But SAS’ overall approach to data management aligns well to our information management research. I was impressed with SAS’ support for process and data orchestration and the overall ease of use of the product; it can be easily used by analysts and IT, with some great job monitoring capabilities.

For the chief marketing officer (CMO), SAS has expanded its Customer Intelligence Suite since my colleague Richard Snow assessed it last year. Expanded capabilities address a broad set of management and operational needs for marketing. SAS provides not just the analytics but campaign management, real-time decision management and personalization that helps ensure the best possible interaction and experience. Though it is not always seen as a key provider of applications for marketing, SAS has been steadily expanding its offerings organically and through acquisitions, and now, with a unified approach and user experience, is ready to strut its depth and sophistication, especially for B2C organizations.

SAS demonstrated a portfolio that engages everyone from the CMO to the analysts, managers and teams responsible for marketing activities that span from strategy and planning to interactions and ensuring great customer experience. An upcoming release expected in Q2 provides a new generation of user experience and integration that I have not seen in other offerings in the market. This sophisticated advancement in customer analytics aligns with my colleague Richard Snow’s view on the next generation of customer analytics that can leverage big data to meet forward-looking needs of organizations.

SAS sees the value in cloud computing, and now has its own global hosted technology infrastructure. It can help its customers set up a private cloud for its technology. SAS has had rapid global expansion to supportvr_bti_br_access_preferences_for_innovative_technologies the cloud since our last assessment. I especially like its management of users, applications and technology and the ease of working across deployments and upgrades. SAS will soon also provide a platform for assembling applications for a range of needs for business. This new step forward, expected later in the year, is significant, as SAS is not known for its ability to foster the development of applications, but it has had this capability in its portfolio, and now is making it simpler and accessible in the cloud. Our research finds that the on-demand model and even software hosted by the supplier plays a growing role not just for analytics but for a range of big data and mobile technology needs in over a third of organizations. For SAS, this capability goes well beyond just providing analytics in the cloud, and places it in the market of companies such as Salesforce, which provides Force.com as its cloud-based application development environment but also provides information and analytics applications. SAS continues to expand its OnDemand offerings that provide easier access to many of the sophisticated solutions in its portfolio.

SAS is also applying analytics to decision-making through a series of advancements with its Decision Management technology. As many organizations realize, the value of analytics is in using them to enable action to be taken. This is no easy task, as most analytics and their presentation are not designed for assessing, taking and monitoring actions. SAS has developed a suite of capabilities and tools to help in the preparation of data, modeling, optimization, workflow and rules, monitoring and reporting, along with supporting case management. After a close look at the product I found it to be well-designed with an easy-to-use interface, especially the decision flow builder, which can be used by business analysts to design processes and analytics. I especially like the SAS Scenario Manager, which allows for side-by-side examination of decisions to determine how to optimize activities. SAS’ full suite of integrated decision management capabilities is expected to be available in the second quarter of this year, and SAS has an aggressive roadmap for continuous improvement. Only IBM in this market has a comparable area of focus and integrated approach with a portfolio of tools for decision management across any industry. SAS is making a smart step forward and will need to elevate the visibility of this offering in its portfolio to ensure it gets the proper level of consideration.

SAS also provides software for risk managementGRC and fraud technology to handle the most sophisticated challenges facing organizations and lower risk in organizations. Our research into GRC finds that 79 percent of organizations are looking to identify and manage risks faster, and more than half (59%) need to improve their control environment. I will let my colleague do further analysis of SAS portfolio in this area in the future.

SAS continues to build out its partner ecosystem. It has made strides to expand into other companies’ technology ecosystems, including Teradata and EMC, and works with system integrators such as Accenture, Capgemini and Deloitte. SAS had a great customer panel at the analyst event, and while I’m under NDA and cannot tell you the customer names, they represented some of the largest brands in the world, and they operate and use SAS to meet a variety of analytics and real-time operation needs.

The company has been steadily advancing, as we found in our Value Index for Business Intelligence last year. However, as SAS is adopted by more analysts, it will face the same issues I cited for business intelligence, which has not adapted well to business needs.

SAS has great potential with its approach to do more than just analyze the past but also predict and optimize future business activities using applications and tools that utilize its analytics backbone. SAS believes that its ability to handle proactive and forward-looking analysis on the largest of big data distinguishes it from other software providers along with using in-memory technology and makes it easy to try its software. SAS’ ability to use mathematics and embed predictive analytics into its offerings makes it a unique application provider. I could not cover all the key advancements in its portfolio but anyone that spends a little time examining their portfolio will realize there is a lot more to SAS than most realize. It’s broadening and deepening of its portfolio puts it on the short list of companies to consider for bringing more sophistication and science to business analytics.

Regards,

Mark Smith

CEO & Chief Research Officer

The just-concluded SAS Institute analyst summit (Twitter: #SASSB) provided the annual update on the company’s performance, strategy, products and customers. My analysis of last year’s event talked about its continuation of its product roadmap to new customer acquisition and the broadening of its underlying platform, applications and vertical solutions. SAS is no small-time mover and shaker when it comes to the analytics industry; it extends from technology to tools and applications across industries, which adds up to $2.4 billion in revenue. SAS’s growth was worldwide, with Canada and Asia-Pacific delivering the largest percentage revenue growth and Europe, Middle East and Africa representing the largest revenue for the company at more than $1 billion in revenue; U.S. revenue came in slightly lower.

Just as important for this software giant is its success in advancing new sales, which were up 20 percent, a sign that it has been able to reach beyond its core customers that have been leasing SAS for decades. The largest part of SAS’s revenue (42%) comes from the financial services industry, followed by government with 15% and services industries representing 11%. But many do not realize that SAS has been expanding its offerings by making them easier to access via the cloud, an area in which it grew by 34 percent in 2010, contributing significantly to the growth in its core of analytics and fraud. SAS has prided itself for many years on its focus on employees, earning an industry #1 rating as a place to work. But its focus on customers and products has earned it high ratings as well as SAS has invested in improving the usability of its broad portfolio.

In defining its core business strategy for 2011, SAS has set five global priorities: analytics, customer intelligence, data management, risk and fraud. These priorities reflect the areas where SAS found the largest growth in 2010: in the Americas, customer intelligence grew by 229 percent, risk management by 111 percent, fraud by 241 percent, and its focus on DataFlux for Data Management grew globally by 29 percent. All of these are areas of comfort for SAS, areas where it has market growth and deep competencies. Speaking to the analyst summit about his company’s technology strategy, CTO Keith Collins outlined focuses on high performance computing, process automation, business visualization, data management and software as a service. All of these are unquestionably important; I hope that SAS also investigates the value of introducing new collaborative methods for person-to-person and person-to-group interactions of the kind we have seen from the likes of Salesforce.com with Chatter and SuccessFactors with CubeTree. All systems used for business should be able to support collaborative interactions that can draw on its workforce’s knowledge and experience to maximize value.

SAS is continuing to develop the framework of its core of business analytics on which it has been working for 30 years. It stretches across data mining, forecasting, modeling, scoring and simulations all the way to advancements in supporting text and sentiment analysis. SAS also has gotten a lot better in discussing the business use of its algorithms and how they can be operationalized into activities and process. This analytics core is the foundation of its business; on it rests the layers of integration with information and data architectures across an enterprise.

SAS has invested significant time in making its analytics more accessible to stand as an alternative to other data-centric computing technologies like Teradata and new players like Aster Data which was just acquired by Teradata, Netezza which was acquired by IBM and Greenplum, acquired by EMC. SAS is betting these investments in high performance computing will make its analytics part of a larger future grid computing strategy in IT; it believes it will address inefficiencies in the new Hadoop and large scale data technologies as well as take advantage of massively parallel processing data technologies.  SAS can abandon one partnership, which aimed to integrate its technology into the now-shut-down HP Neoview; now, however, HP has acquired Vertica to increase its columnar capabilities as my colleague has noted. SAS is not about to allow itself to be excluded from capitalizing on the broader demand for information management; in this regard it has continued its efforts with DataFlux, which it wholly owns. Last year I did a review of its direction. In a surprise move DataFlux also acquired Baseline Consulting to get more management and technology consulting depth to help it scale its ability to help organizations transform their data and information strategies across business and IT. It also now brings deeper value to its data integration, data quality and master data management portfolio with new technologies for federated data access and complex event processing (CEP) that compete against IBM, Informatica, Oracle and SAP. I highlighted the importance of CEP and what we call Operational Intelligence, which is  well-defined in Wikipedia; it’s good to see SAS understanding this as a competitive necessity and so addressing it as part of its portfolio. But I’m not sure SAS understands yet the importance of interconnecting to existing and newly implemented event streams in the enterprise.

SAS readily admits it should be a larger player in the business of business intelligence (BI), but its BI portfolio is still a good part of its overall revenue, estimated at about 10 percent. In response to some pointed questions about its commitment to BI, SAS provided more detail on its efforts. SAS is busy rewriting much of its BI portfolio, using its 350 developers to more thoroughly embrace the mobile technology revolution being driven by smartphones and tablets. As part of its overall strategy, SAS has announced a strategic partnership with MeLLmo and the Roambi technology. Demonstrating the integration of SAS Enterprise BI Server and Roambi ES3 technology already is helping existing customers get mobile-ready for Apple iPad and iPhone devices. Our benchmark research into business intelligence and information applications found a high level of demand by business, but also found IT not yet as optimistic or engaged in enabling the use of mobile technologies. Even our pending benchmark research in business analytics across thousands of organizations finds new demand across specific line-of-business areas. SAS does get overlooked for business intelligence projects quite often and for a number of reasons that are more related to marketing and sales to the target audience of BI and line-of-business analysts than to their product not having sufficient capabilities. It appears that SAS in 2011 will have a series of new releases to broaden the scope of BI with advancements in discovery and visualization, search, mobility and integration with Microsoft Office. This will be essential to compete against the usual suspects like IBM, MicroStrategy, Oracle, QlikView, SAP and even open sourced-based Actuate, Jaspersoft and Pentaho, all of which in the last year have released major new versions of their platforms and tools.

Where SAS has made its presence known is in the office of marketing and related areas, helping them succeed in management and specific operational activities including campaign management and a range of customer analytics from gaining predictive insights on future outcomes to understanding customer behavior at a granular level. SAS has emphasized its focus on resource management, bolstered when it purchased Veridiem many years back and now augmented by the recently announced the acquisition of Assetlink to further deepen its presence in marketing. My colleague recently assessed SAS Customer Intelligence and the portfolio that is gaining traction with new deployments across industries. SAS has also expanded its social media analytics offering to support monitoring deeper sentiment and relationship analysis . SAS has for many years focused on improving the role of technology in marketing, an area that has also been seen as important by the likes of IBM, which acquired Unica and Coremetrics, and recently Teradata, which acquired Aprimo. Our benchmark research into customer analytics and marketing analytics show significant room for improvement, potential that will continue to provide SAS room for great customer and revenue growth. SAS is working hard to unify its suite of applications, seeking to ensure consistency of user interfaces and then deliver support for the mobile needs of marketing organizations. All of these activities are heating up what looks like to be a battle for the CMO’s attention and spend – a battle that will require fluency in talking marketing-speak to be successful.

SAS has invested more deeply into four key industries: banking, insurance, retail and government. I will not get into the details of the significant growth of the offerings that address risk and fraud for these industries and healthcare, as they require more in-depth analysis, but this clearly is where the business analytics foundation plays to its strength in providing suites of applications. One of the interesting aspects of the analyst summit was what was missing as part of SAS’s communications about strategic directions. SAS has invested into many areas including finance, human resources, supply chain, sustainability, IT and into areas of performance management. All of these areas have potential and were highlighted last year, but SAS’s efforts in these areas remain mostly unknown by the specific line-of-business buyers; unless and until SAS invests further into the marketing and sales it probably will not find much new growth compared to previous years. This should be something that concerns it, as have a growing base of customers focused on solving their enterprise problems helps drive improvement and refinements to its business focus. I also have not seen SAS invest yet into area sales and customer service or contact centers. SAS has alluded to adding support for contact center operations but we’ll have to see how that plays out in regards to my colleague’s research areas of agent performance management and customer experience management. Also, I pointed out last year and still believe that SAS will need to invest into speech analytics to gain insight to the true voice of the customer that can be found in customer interactions in contact centers.

From a market perspective SAS has business analytics competencies in industries where I do not see that IBM and SAP have deepened their efforts. On the other hand, SAS is not as strong in healthcare, retail, life sciences, energy and manufacturing. I am sure this will continue to change as the market heats up. I also am not clear where Oracle is at since it has not articulated a portfolio approach to business analytics across industries and lines of business beyond IT and its own application efforts. Also, I need to make sure not to miss the dozens of dedicated line-of-business analytic and performance management application providers that are growing rapidly in areas like sales, contact center and talent management.

SAS has come a long way since IBM donated a mainframe to a university in North Carolina to help advance the statistical programming movement in 1966, back when Tony Barr was part of the origins of the statistical analysis software. Tony and Jim Goodknight, John Sall and Jane Helwig started SAS Institute in 1976. In now reaching its 35th anniversary, SAS Institute has helped advance the science of analytics in so many ways that will never be measured. Now SAS Institute will need to examine if it can expand beyond its comfort level and areas of growth it has outlined to areas where it has new growth potential. If you have not considered SAS for technology and applications in a range of business analytics, look again; there are many great business-friendly offerings that can provide great value. SAS is transforming and simplifying its efforts, bringing its offerings into the cloud, which is part of the reason it has been able to grow without having to increase its consulting services organization. SAS has also opened up and worked very closely with consulting services firms that can help use its technology to transform management and business processes. The only caution in considering SAS is to be aware of the areas where it has not yet upped its investment. But it is worth watching it attempt to deliver on a mission of business analytics for every line of business and industry.

SAS appears to be in revenue and product portfolio the largest supplier of business analytics technology and products, and will continue to grow as businesses invest into the information and analytics that help them not just optimize but perform at the expected level.

Regards,

Mark Smith – CEO & EVP Research

Mark Smith – Twitter

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