July 19, 2013
A number of my colleagues and I attended the recent global SAS analyst event to understand the future of SAS’s business and technology strategy. It was clear to me from this event that SAS is attempting to bridge the increasing divide between “traditional” analytics and the big data and cloud-based analytics worlds.
Here’s a few of our key observations and takeaways from the event:
- A greater emphasis on visual analytics. The range of tools available and the integration capabilities to enable visual analytics will be significantly improved in future releases.
- Better support for governance and audit. One of the benefits that any decision support system should provide is better business governance – the transparency and auditability of how and why decisions were made and what data was used to make them. SAS continues to make good progress here.
- A more encompassing view of big data. Most analytic vendors believe either nothing – or everything – has changed in the emerging world of big data. SAS’s view is generally an inclusive one, which will be more beneficial to clients long-term if successfully implemented. The SAS architecture is evolving towards supporting big data economies of scale, in theory at least.
- Better integration with all forms of cloud technologies. Still operating largely at the OS virtualisation layer, SAS is nonetheless extending its portfolio to include a range of cloud-enabled architectures. We expect that client demand will drive further development here.
- The mobility story is still evolving. While there are some significant improvements, mobile analytics currently remains rudimentary – at least without considerable integration and development effort.
- Growing services capabilities will lead SAS to compete more directly with partners. Much of growth of SAS revenue still comes from software. But, as with all complex software solutions, consulting and services eventually grow at a faster rate. As an example, consulting revenue for Asia Pacific grew nearly 30% in 2012. As customers move towards a preference for more managed service-based solutions, SAS will be forced to change what it sells and who it ultimately sells to.
SAS has clearly mastered the art of productising its portfolio of broad capabilities. It still has 250+ products on its price list – and as my colleague Mark Bartrick points out in his report “A Quick Guide To Help You Prepare For A SAS Software Negotiation” this makes it incredibly difficult to determine comparative pricing for similar products. Particularly since SAS still sells analytic capabilities – not completely pre-packaged analytic applications. Nonetheless, SAS has built a reputation and loyal client base focusing on addressing business-driven analytics, not technology-led report management. This is a good thing.
SAS’s main challenge now is broadening its penetration into existing clients accounts. It's still common for SAS implementations and operational teams to be “outliers” that exist outside traditional IT and not quite within the business. In selling a more technology led vision for big data and cloud based analytics, SAS risks diluting its business focused analytic messaging. In serving only business needs, it risks missing out on the growing market around key emerging technology trends. We expect SAS to continue winning new clients but the company will struggle to manage the lengthening sales cycles as it tries to expand the portfolio within existing clients. Version upgrading will therefore be a major focus in the initial stages.
The bottom line – SAS remains well positioned for growth. Improving business analytics has always been somewhere in the top quartile of most CIO’s strategic agendas. However,actually improving business analytics is becoming more of an opportunity for SAS’s key business partners, rather than a project driven by internal enterprise IT. So, as long as SAS maintains a balance between its own services and those provided by partners, the company will continue to grow.