SAS's Goodnight won't say goodbye yet
Published: 23 May 2006 16:05 BST
You spend a big percentage of your revenue on research and development. What kind of challenges do you see there?
We tackle some of the hardest problems in the world, like the credit card fraud thing which is incredibly complex. Look at Home Depot. They want us to help them price every single item in a store. If a competitor is across the street they have got to make sure for all those items that they carry, they have similar prices. That is a huge, enormous operations research and computing problem. Now we are talking about 72 hours of computing on some of the fastest computers. It can take them 72 hours to compute the price on 200,000 SKUs (items) across 1,000 different stores and have a different price in every store to optimise profit.We love those challenges.
What do you see as the biggest differences between Europe and America when it comes to software?
In the software market I don't see any difference at all. There are a few different products, such as Basel II, that we have sold a lot more of here than in the US but we have seen a lot more money laundering products sold in the US because of the US Patriot Act.
But now the Norwegian government has imposed money laundering restrictions there and all of a sudden we now process 80 percent of all cheques in Norway. And we turn it over to their police when we find exceptions. But then they don't know what to do with it, unfortunately. Because the police are so far behind there.
Do you think you will move the company more into consulting?
I never wanted SAS to be a consulting company, I just wanted to be a software company. About 10 percent of our revenues are consulting.
If you look at Siebel in their last year, we sold about four times more software than they did. They were a services company. Two thirds of Siebel's revenue was consulting. It's so damn hard to install that people had to spend twice that to make it work.
The sales force automation tools were really hard to install and once they were up and running the sales people don't want to use them. Why? They want to keep it all in that little notebook. It's the mentality of the sales people that defeated Siebel. Cognos is the same way. Last year two thirds of their revenue was consulting. A lot of software companies bring a lot of their revenue in from consulting. We don't. I have never really had a very profitable consulting business because the sales people talk 'em into doing stuff for nothing.
Who are your competitors?
Oh, we have about 200. Number one competitor is Oracle. We run into Oracle in about 10 percent of our sales situations. SAP is about 8 percent. Cognos about the same. Business Objects is about 5 percent. We have so many different products and every market we are in has different competitors. We like different competition.
Some times we get so bored with competing with the same companies that we go out and write some new software so we can compete against somebody new.
You have just been celebrating 30 years of SAS. Do you ever think about what's next?
Death. (Laughs.) Well, I have a golf course and I can say that as many times as I have played it I have never parred it and I don't think I ever will.
I enjoy golf about 25 times a year. I skied 10 days this winter.
I have a condominium out in Steamboat Springs, Colorado, with fantastic skiing. I am just so active and so enjoying life right now. I'm a member of the International Business Council, which is a group of 100 global CEOs who are sort of advisers to the World Economic Forum and I am on the Business Round Table in the US which is 200 CEOs from all over the country. We get into very stimulating and interesting discussions.
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3 comments
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Having several years experience in SAS, been invol... Pascal Guignard -
I fully share your opinion Pascal, we are exa... Etienne Baert -
Forget to add this in my post:
It becom... Etienne Baert
