SAS Institute: Great for a Reason

By Kim S. Nash Print this article Print

Dossier: Its tools may be complex, the world's biggest privately held software company has extended its corporate culture to include its customers. Is citizenship a privilege or a restriction?

The world's biggest privately held software company, SAS Institute is almost a way of life. That's true for SAS employees, who get free health care, recreation facilities, subsidized daycare and time off for their kids' soccer games. But the sense of community also extends to SAS customers.

PDF DownloadIt can take years to master SAS tools because the software is complicated and does sophisticated statistical analysis. People who can do it are proud. Local and regional user groups are strong, members are opinionated. "It's a network. We're tied together," says Alice Pressman, a health research analyst at Kaiser Permanente in Oakland, Calif.

SAS Institute's core products, such as SAS/STAT and Base SAS, are for heavy duty statistics work. Pharmaceutical and financial services firms are mainstay customers—companies where the slicing, dicing and crunching of numbers is core to the business.

SAS brags about a 98% customer retention rate, but look closely. SAS doesn't sell product licenses like most software companies. It sells software by annual subscription. Fail to renew and a time bomb paralyzes the tools—and any applications built atop them.

Fingerhut Companies, a large SAS user, has gotten bombed. "We've designated one of our SAS programmers to be the contact with our SAS rep to stay on top of that, but we get caught," says Randy Erdahl, director of business intelligence. A phone call to SAS with a promise of payment gets it resolved, he says.

Another side effect: When you own a product license, you can choose when to upgrade to new versions. With subscriptions, users are on SAS's timetable.

Customers have long griped about the subscription system, but SAS hasn't budged. The $1 billion vendor says it hasn't needed to, claiming 25 straight years of sales growth. Its nearest competitors are half its size.

Plus, customers say, few tools can match SAS capabilities.

"They bring technical expertise and help you install the product. They help you from A to Z," says Bill Lepler, vice president of enterprise CRM at The Limited. The Limited's headquarters office spends $200,000 per year with SAS. Several other divisions also use SAS tools. "It's become the gold standard for analytical work," Lepler says.

SAS Institute
100 SAS Campus Drive, Cary, NC 27513 / (919) 677-8000

Employees: 8,025

Jim Goodnight
CEO, Chairman
Started the company in 1976 after writing a statistical analysis program while a graduate student at North Carolina State University. Runs the company like a community, with on-site health care, day care, education, even a farmer's market. Hosted President Bush's economic team in January.

John Sall
Executive Vice President, Cofounder
Oversees SAS's Macintosh products and educational software. Also went to N.C. State.

Keith Collins
Chief Technology Officer
Joined in 1984 in R&D, now directs the 1,100-member group. He's another N.C. State alum.

Jim Davis
Chief Marketing Officer
Before overseeing marketing, was product strategy director.

Key Products
Fifty products, including Base SAS for analysis and presentation, SAS/STAT for eight kinds of statistical analysis, SAS Information Delivery Portal, SAS Warehouse Administrator and many data cleansing, management and reporting packages.

Reference Checks

Fingerhut Cos.
Randy Erdahl
Director, Business Intelligence
(952) 932-3100
Project: The catalog giant has used SAS tools for more than 15 years. Current work involves using SAS macros to help refine direct-mail catalog campaigns.

Fireman's Fund Insurance Co.
Dave Freese
Business Systems Manager
Project: The $4 billion insurer has built several analytical applications with SAS programming tools, including loss-monitoring and sales-performance systems.

Hartford-Area SAS User Group
Janet Stuelpner
Steering Committee Member
(718) 248-5814
Project: A SAS user for 21 years at financial and pharmaceutical companies; now at Citigroup, training credit analysts in SAS.

The Limited
Bill Lepler
(614) 415-7000
Project: The clothing retailer's Victoria's Secret division uses SAS to analyze sales data from catalogs, stores and the Web site.

Rene Laurencot
Senior SAS Programmer
rene_e_laurencot@ groton.pfizer.com
Project: The $32 billion drug company uses SAS for statistical analysis of clinical trials data, and to create reports for the U.S. Food and Drug Administration approval process.

U.S. Bancorp
Mike Tangedal
Credit Analyst
(651) 205-0743
Project: The $16 billion Minneapolis bank uses SAS tools to scrub data and analyze customers' credit and financial histories.

The executives listed here are all users of SAS's business intelligence software. Their willingness to talk has been confirmed by Baseline.

This article was originally published on 2002-04-15
Senior Writer
Kim has covered the business of technology for 14 years, doing investigative work and writing about legal issues in the industry, including Microsoft Corp.'s antitrust trial. She has won numerous awards and has a B.S. degree in journalism from Boston University.
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