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Date: Nov 29, 2009
New York Times, By STEVE LOHR, November 21, 2009
A tour of its carefully tended, 300-acre corporate campus here leaves little doubt why surveys, year after year, rate the SAS Institute, the world's largest private software company, among the best places to work.
SAS CEO James Goodnight
But that good life is under threat today as never before. SAS's specialty, a lucrative niche called business intelligence software, is becoming mainstream. Free, open-source alternatives to some of the company's products are increasingly popular. On the other end of the spectrum, the heavyweights of the software industry - Oracle, SAP, Microsoft and, especially, I.B.M. - are plunging in and investing billions of dollars.
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Indeed, no one underestimates SAS's technical prowess. The big question is whether the company's seemingly pampered culture can embrace the higher-octane institutional metabolism that it will need to succeed.
SAS invested heavily in research and development, and even today allocates 22 percent of the company's revenue to research. The formula has paid off in steady growth, year after year. Revenue reached $2.26 billion in 2008, up from $1.34 billion five years earlier.
Yet the company also faces the classic challenge of being the innovative pioneer - enjoying rich profit margins but facing new competition from rivals seeking to gain market share with lower prices and substitute technology.
In the last two years, the major software companies have scooped up companies in the business intelligence market. Among the larger moves, SAP bought Business Objects for $6.8 billion, I.B.M. bought Cognos for $4.9 billion and Oracle picked up Hyperion for $3.3 billion.
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