SAS: Striving to Sustain Leadership

SAS' Profile

SAS Institute is a privately-owned Cary, North Carolina-based (US) provider of business analytics, which operates through 200 offices across 100 countries in North America, Europe, Asia Pacific, Latin America, and Africa. It employs nearly 10,000 people and has recorded revenues of over $1.5 billion (USD) in 2004, which was an increase of about 14 percent over 2003.

SAS believes it is uniquely positioned to provide companies with a suite of software products that, when integrated, provide more complete business insight from both a historical and a forecasting view. Specifically, SAS can provide companies with easy access to any data source, enabling it to more efficiently process the data and generate reports—both historical and predictive—in the format that the user wants.

SAS is the market leader in providing a new generation of business intelligence (BI) software and services that create enterprise intelligence. Its data warehousing (DW), extract, transform and load (ETL), and data mining software gather, manage, and analyze enormous amounts of corporate information to find patterns in customer data, manage resources, or target new business. SAS solutions are used at more than 40,000 sites—including 96 of the top 100 companies on the Fortune Global 500, and is used in almost every major US government agency . It has enabled companies to develop more profitable relationships with customers and suppliers and to execute better, more accurate, and informed decisions.

Having been a leader in deep-dive analytics since the mainframe era, SAS has lately focused on sustaining its technology leadership, in part through a number of well thought-out acquisitions and by expanding its entrenched presence in some vertical markets. To that end, the vendor offers a range of products, solutions, and services for a number of different industries, including automotive, banking, energy, utility, financial services, government, education, healthcare, insurance, life sciences, manufacturing, media, entertainment, retail, and telecommunication.

SAS has made notable in roads into the enterprise realm and can no longer be described as a mere BI vendor. Its product portfolio now spans more than one hundred products (some grouped and integrated, while others remain as standalones), and extends far beyond data mining tools, embracing a gamut of applications, from geographical and statistical visualization to fraud detection and DW administration tools. Products include CRM, financial intelligence, human capital management (HCM), IT management, patent intelligence, performance management, process intelligence, risk management, scorecarding, supplier relationship management (SRM), supply chain intelligence, value chain analysis, warranty analysis, and Web analytics. SAS also provides services like consulting, technical support, and training and it has a number of subsidiaries, including DataFlux, which provides software for data management, and Marketmax, which offers products for advanced retail planning and analytics.

In addition to the Fortune 500 and many other large, multibillion US enterprises, which have historically been its stronghold, SAS has also been focusing on selling its products into midsize enterprises. The vendor has already saturated the mainframe-based portion of the global 2000 marketplace, where the sales of upgrade products is limited by the tendency of very large organizations to customize their data analysis programs. To enrich its coffers, SAS is departing from its traditional scientific and analytical applications, and the high-end of the market, to become more attentive to low-end analytics through a simplified Web-based query-and-reporting tool.

This is Part one of a multi-part note.

Part Two will discuss alliances, partnerships, and acquisitions.

Part Three will present a marketing analysis and make user recommendations.

SAS 9—The First-Time Unified Enterprise Intelligence Platform

In fact, SAS might still be the only vendor that completely integrates data warehousing, analytics, and traditional BI applications to create intelligence from massive amounts of data. For nearly three decades, since its founding in 1976 , SAS has been giving customers around the world its trademark "The Power to Know" mantra. Similar to Amdocs' delivery of a unified platform, SAS delivered the united SAS 9 platform much earlier, in 2004. The SAS 9 platform has enhanced analytics and refined user interfaces (UI) that provide fresh insights for solving business problems and driving competitive advantage. SAS touts this software as the most significant release in its long history, reportedly being faster, more efficient, and easier to use than its predecessors. More importantly, SAS9 marks the company's move from point technology solutions to enterprise-wide technology solutions. The new platform connects all SAS applications so that they work together transparently. It also communicates with other data sources and programs.

The platform also boasts enhancement of what may possibly be the most tightly integrated optimization and predictive analytics capabilities available, making it even easier to answer complex questions that cannot be addressed by traditional BI tools. Enhanced analytics in SAS 9 include a comprehensive set of capabilities like predictive and descriptive modeling, forecasting, simulation, optimization, and design of experiments. The platform takes advantage of analytical advances, equipping users with additional and enhanced predictive modeling capabilities, predictive modeling markup language (PMML) scoring code to ease deployment on analytics. It also provides a Web-based model repository to enable reusability. Now with new Java interfaces, SAS Enterprise Miner, and SAS Text Miner, these analytics tools should enable forward-thinking organizations to analyze both structured data and unstructured text more easily.

To refresh our memory, data mining is a class of database applications that look for hidden patterns in a group of data that can be used to predict future behavior. For example, it can help retail companies find customers with common interests. True data mining software does not just change the data presentation, but actually discovers previously unknown relationships among the data. This knowledge is then applied to achieving specific business goals.

These tools are used to replace or enhance human intelligence by scanning through massive storehouses of data to discover meaningful new correlations, patterns, and trends by using pattern recognition technologies and statistics. Hence, it is popular in the science and mathematical fields but it is also increasingly being used by marketers trying to glean useful consumer data from their Web sites. Going one step further, predictive analytics is data mining that uses pattern recognition, statistical, and mathematical techniques on large amounts of data to support decision-making by forecasting the outcomes of different scenarios. SAS has been the leader in this area, with its software's ability to learn from the past, manage the present, and predict the future. It then makes that intelligence available to all constituencies within the organization.

Its rich suite of integrated data mining algorithms is now enhanced with a rather easy-to-use Java interface, allowing business analysts, IT specialists, and quantitative experts to extract business knowledge from vast data stores and then create results that can be integrated within operational systems. SAS Enterprise Miner is ideal for analytical CRM and financial decision-support initiatives, monitoring compliance, detecting fraud and money laundering, and for quality improvement in manufacturing environments. On the other hand, SAS Text Miner discovers and extracts knowledge from text documents, and is used to analyze a myriad of data, including information from call centers, customer or employee surveys, competitive intelligence, and patents. SAS Text Miner can also help detect emerging product issues. SAS 9 also supports several additional languages, expanding its usefulness globally.

SAS Enterprise Intelligence Platform

These impressive analytics also include a diverse set of predictive, descriptive, and statistical analytics software to help decision makers anticipate how their actions will impact the future, and it turns almost every employee into a knowledge worker. SAS 9 also includes the SAS Enterprise Intelligence Platform as a foundation for future SAS horizontal and vertical BI solutions. Other main strands include a broad set of integrated software for data integration through the SAS Enterprise ETL Server; data warehousing through the SAS Intelligence Storage; and portal capabilities, and query, and reporting through the SAS Enterprise BI Server. These offer several UIs the opportunity to improve usability throughout all levels of the enterprise. SAS 9 data integration includes data quality and a common metadata repository for ensuring reliability of information across computing systems. SAS Enterprise ETL Server cleanses and integrates data into a common, usable data store that offers an available, consistent, and verifiable set of answers across the enterprise. In other words, the power behind the SAS 9 platform is tight integration, data quality, common metadata, and centralized management.

At the same time, SAS also announced plans to deliver seven software solutions that will take advantage of the SAS 9 Enterprise Intelligence Platform, to provide organizations with an integrated suite of solutions that addresses many key business challenges. Each of these solutions aims at helping user organizations go beyond BI as they know it, and ensure that more and more people within those companies—from the factory floor to the boardroom—can use the predictive analytics and data management capabilities of SAS. With SAS 9 and its new UIs and capabilities, SAS believes the group of potential users will expand so much that even more than 80 percent of the people in an organization will have access to BI solutions. The seven SAS solutions on the SAS 9 Enterprise Intelligence Platform are

• SAS Customer Intelligence address key areas such as marketing automation, marketing optimization, and customer retention. Designed to give organizations the insights they need to develop and implement smarter customer strategies and maximize customer profitability.
  
  
• SAS Risk Dimensions helps financial services firms and energy companies measure and analyze their risks, meet regulatory reporting requirements, and improve capital allocation. Risk Dimensions provide an open, flexible, and extensible environment for data management, risk analysis, and risk reporting. Additionally, SAS has aggressively pursued the opportunity to assist the banking and insurance industries in the pivotal area of risk management. In 2003, it acquired OpRisk Analytics, a provider of operational risk measurement and management solutions, to extend SAS' offerings for both corporate and consumer risk measurement and reporting. SAS also acquired RiskAdvisory, a provider of risk management and consulting software to energy companies. This acquisition has significantly enhanced SAS' ability to offer high-value energy risk management solutions to customers in industries such as oil, gas, and utilities. It also caters to financial services, as banks begin to sell energy into wholesale markets.
  
  
• SAS Strategic Performance Management translates company strategy into actions that can be measured and monitored throughout the entire organization. Results are then distributed via the Web to provide employees with the necessary information to analyze, collaborate, and implement strategy. SAS SPM helps executives improve performance while executing their strategic goals by focusing their entire organization on the initiatives and key performance indicators (KPI). KPIs are delivered via a Web browser and built-in filtering and alerts send out a call to action when performance is not meeting targets. Once notified, users can use SAS advanced analytics to discover why performance is not meeting targets, allowing users to take corrective action accordingly.
  
  
• SAS Supplier Relationship Management (SAS SRM) addresses procurement and purchasing as a vital link in the supply chain. Through data management and analytics, SAS SRM provides organizations with worldwide insight into suppliers, commodities, and procurement activities. With it, they can better understand their overall supplier landscape, minimize risks associated with suppliers, improve negotiation, and achieve substantial cost savings.
  
  
• SAS Activity-Based Management (ABM) integrates existing financial and operational systems to generate cost and profitability business models that support better overall decision-making. SAS ABM delivers advanced business modeling capabilities, a Web-enabled analysis and reporting interface, and data integration tools to retrieve and transform data from virtually any system. It enables strategic and operational decisions that maximize profit, reduce costs, and streamline processes by determining the cost of processes and the profitability of products, customers, and business segments. Built on a Web-based, multi-user, client-server architecture, the product goes beyond typical ABM tools by combining visual business modeling with advanced reporting and analysis, and data management, providing a more complete ABM solution.
  
  
• SAS IT Management Solutions helps companies better manage their IT organization and infrastructure and evaluate and control IT usage and costs. Combined with SAS' professional services organization and implementation partners network, these are the solutions that address the entire spectrum of IT services—systems, network, Web services, call centers and phone systems—from the data center to the desktop, across the enterprise and the Internet.

The seventh offering, SAS Financial Intelligence Portfolio, is particularly notable. It targets specific business processes such as consolidations, reporting, budgeting, planning, strategy, forecasting, risk, and the audit process. It provides predictive, accurate, and relevant information to help user organizations transform raw financial data from across operations into the financial intelligence needed to demonstrate financial integrity and transparency. Financial services continues to be the leading source of industry-specific revenue for SAS, and SAS has lately recognized expanded opportunities to support this sector. Intelligence Portfolio also includes new compliance requirements such as Basel II, a revised international capital framework of measures and standards; anti-money laundering regulations; and the Sarbanes-Oxley Act (SOX), a US legislation designed to improve the financial transparency and financial reporting accuracy. (SOX, see Attributes of Sarbanes-Oxley Tool Sets) require sophisticated data management and reporting capabilities.

The need for executives to understand and manage corporate performance has also increased, as a result of the massive demise of dot.coms, moderately optimistic economic times, stringent SOX regulations, and many other mandatory reporting regulatory requirements, from the US Food and Drug Administration (FDA), US Environmental Protection Agency (EPA), etc. The need for accuracy is further highlighted following a series of high-profile corporate fraud scandals, such as Enron and WorldCom. The threat of bioterrorism also demands that management be more knowledgeable in their business operations.

Consequently, SAS has responded by launching a business practice to develop solutions designed specifically to address the challenges created by these and other new corporate compliance demands. It also had to further improve its financial analysis capabilities, which have, for some time, trailed with market penetration due to weaker positioning against best-of-breed financial business performance management suite offerings, such as Geac MPC (from former Comshare), Hyperion, or Longview Solutions.

Also, long known as a maker of tools for the statistics-savvy analysts, the company has recently made forays into analytics and reporting tools that are more friendly for non-technical business users needing occasional, simple query, and reporting capabilities. It has recently released version 2.1 of SAS Web Report Studio. Further, the SAS Financial Management product enables the effective and efficient execution of the planning process by combining the power of SAS Intelligence Platform, best practices planning, on-demand consolidation, and dynamic, secure integration with Microsoft Excel. As a result flexible budgets, and plans are integrated with financial results and strategic performance metrics to ensure that strategy and operations are in alignment.

This concludes Part One of a multi-part note.

Part Two will discuss alliances, partnerships and acquisitions.

Part Three will present a marketing analysis and make user recommendations.