SAS Questions and Answers

A reader writes:

With Oliver Schabenberger now leaving SAS, imagine if…you were catapulted into his position. 

It would have to be by catapult. Nobody wants that job.

What would you advise SAS to do in order to regain its lost market share and industry lead? 

I would advise Goodnight to sell the company and retire.

After that, I would advise SAS to hire new leadership from outside of the company. New leadership can rationalize the product portfolio and take costs out of the business.

SAS market share is gone forever, forget about turning the clock back to 1995.

When people talk about (SAS) reducing their pricing to be more competitive, RStudio Server Pro for Enterprise isn’t as cheap as people think it is. 

RStudio Server Pro is $11,950 (annual subscription) for ten users. SAS’s entry product is SAS Analytics Pro. Deployed on a four-core server, licensing costs for AP are about $60K in first-year fees and about $15K in annual renewals. So, over a three-year period, you pay $90K for SAS and $36K for RStudio. 

Moreover, R on RStudio offers broader functionality. To match those capabilities, you will need to spend more to add SAS modules. Need native access to Oracle? Oops, that’s another $15K FYF. Need to do time series analysis? Oops, that will be $15K more.

Customers have complained about SAS pricing for years. Fifteen years ago it didn’t matter; there were few enterprise-grade alternatives to SAS. Now there are many.

But simply cutting the subscription costs isn’t the answer. Businesses reduce prices if they think they can make up for lower unit margins with higher volume. SAS has saturated the market for its brand; few customers say they will buy more licenses if SAS cuts the price.

For SAS, price reductions mean revenue reductions. Streamlining the company to reduce the cost structure must come first.

(SAS is) integrating more and more Python/R usage into SAS VIYA and SAS Modeler (sic).

That’s nice. You can run your Python jobs in a Viya container or you can run your Python jobs elsewhere and save a bundle.

What do you think of (SAS’s) recent partnership with Microsoft? 

Goodnight tired of losing money running a data center. He shopped the cloud business to AWS and Microsoft; Microsoft offered a better deal. That’s all. It’s a business move.

The integrations mentioned in the announcement lack credibility. SAS said Viya was “cloud-ready” when the product launched in 2016. Was it “cloud-ready” then? Is it “cloud-ready” now? 

In any case, “cloud-ready” is a bullshit term. All software is “ready” for the cloud. Enterprises today want cloud-native and platform-agnostic software. They want automated provisioning, auto-scaling, a serverless user experience, and consumption-based pricing.

Whatever you get by partnering with Microsoft, it’s not platform-agnostic.

18 comments

  • Thanks for taking the time to reply in a blog post and thanks for the links! I guess it’s time for Dr. G. to wake up and smell the coffee.

  • On another note, I’d love to hear your views on this almost 10 years ongoing case, perhaps in another blog post. WPS Analytics vs SAS.

    https://www.wraltechwire.com/2020/11/10/sas-no-surrender-in-79m-lawusit-against-world-programming-ltd/

    https://www.newsobserver.com/news/business/article247011887.html

  • Schabenberger was the COO, this guy’s the CTO — typically one down from the COO.

  • If you have the time, listen to the audiobook “The Power Broker: Robert Moses and the Fall of New York” by Robert Caro. If you understand what you are listening for, it reveals a lot about JG, SAS and it’s future (in my opinion). Here’s my interpretation:

    Robert Moses was fond of building highways. That worked for a bit, but people needed mass transit. Moses kept building highways though, and destroyed those who advocated otherwise. Society evolved, but Moses didn’t. He remained until he was forcibly removed by Rockefeller. New York became stuck in traffic gridlock.

    JG caught lightning once and rode it for awhile. But what got him here will get him no further. Only a great fall could bring the humility necessary for change. Time has run out.

    • Thanks for reading and commenting. I’m so old I read the book when it was first published. A very good read.

      Respectfully, I think the comparison to Robert Moses is a bit of a stretch, but I think I see your point

      • The comparison dimension is personality type. Highly narcissistic, in my opinion. No amount of outside information or reason will change their minds. Only painful, public mortification will. But that’s not going to happen with an old billionaire.

        The slope of descent for that company will increase (as you’ve written), and there’s no pulling out of that dive. I suspect that over a 10 year timeline any intellectual property will be worth “$0”. Maybe Sall can salvage his operation.

    • Why listen to an audiobook when you can read it 🙂 actually this book is definitely on my to-read list! I saw the movie “Motherless Brookly” recently which references the character Robert Moses heavily although indirectly https://www.youtube.com/watch?v=Fru8IkuDp_k
      anyway, Dr. G is going to retire soon since father time’s clock is ticking…I wonder what they have in mind regarding succession. I read in a previous comment that you (Thomas) recommended giving SAS a charity status i.e. donate the company to open-source, kinda like what Rstudio is now if I’m not mistaken?
      cheers!

      • The uncertainty about ownership succession is why SAS struggles with management succession. Talented outside execs are unlikely to consider a role at SAS until Goodnight makes clear his intent.

        Possible options are (1) sale to a public company; (2) sale to private equity; (3) family ownership; (4) charitable trust. Sale to private equity is more likely than sale to a public company. I don’t think Goodnight’s heirs want to run the business. A charitable trust preserves the SAS culture. But sale to private equity maximizes the wealth Goodnight leaves to his beneficiaries.

      • Or getting bought by a SPAC. It’s SPAC fever these days…spacmania!

  • Motherless Brooklyn was a fun movie. Any secret love children may work in Marketing, however, rather than Activism.
    Come to think of it, that Rec Center pool was fairly cold for my liking…

    • It makes sense for a company outside of the analytics industry to acquire SAS. Acquirers from inside the industry — IBM, Oracle — will create channel conflicts for SAS. If IBM acquires the company, all of their SI partnerships go bye-bye because they compete with IBM. SAS is worth more to a buyer from outside of the industry.

      • Schabenbuggered

        SAS seems to thrive on PR. The “revenue growth”, “best place to work” and “we’ve never had a layoff” tales were always manure and are now played out. There haven’t been any “sales” of free software to the latest cause-du-jour lately; they need some new PR material to get the SAS name into the headlines. A company sale gets everyone speculating, and dopes like me commenting. It’s manufactured drama for free advertising. Don’t believe any of this “sell the company” nonsense; it will only happen in JG’s estate.

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