The SAS-Teragram Deal's Back Story

SAS has announced their take-over of text-analytics vendor Teragram. The companies' joint press release states that "the acquisition will enhance SAS's own robust text mining and analytical BI offerings and extend them to enterprise and mobile search." The release cites Teragram's natural language processing (NLP), categorization, and enterprise search technologies, but it leaves much of back-story untold. Here's my take on positioning, technology, and solution considerations that likely motivated what seems like a smart move for both companies.

The essence of the announcement is captured in SAS CEO Jim Goodnight's statement, "Teragram's technologies augment, strengthen, and extend SAS's ability to combine structured and unstructured data – not only in our text mining solution but embedded across the entire SAS Enterprise Intelligence Platform – to drive better answers faster." SAS chief text mining strategist Manya Mayes added in e-mail to me, "Teragram has a broad solution that includes enterprise search and mobile BI" that "complements SAS Text Miner."Implicit is that SAS has not kept up with the competition in integrating text technologies into industry vertical solutions or business-function horizontals. The Teragram acquisition bridges gaps.

Start with Manya Mayes's statement above: So far as I know, prior to the acquisition, SAS had no enterprise search or mobile BI capabilities.

Then there's Dr. Goodnight's "augment, strengthen, and extend": perhaps an admission that SAS has been slow to build text analytics into their solution lines for functions such as CRM, compliance, and financial analysis where text analytics is delivering significant value. Further, SAS appears to lack generalized text-analytics tools that can be sold outside the company's installed base, in competition with pure-plays and text-BI competitors. The Teragram acquisition should allow SAS to generalize their text-related capabilities beyond the text data mining workbench that has been their home to date.

Regarding those text-BI competitors, SAS's PR leaves unsaid that by acquiring Teragram, SAS brings in-house linguistic capabilities that the company has long licensed from Inxight, a company bought last year by SAS's BI rival Business Objects. Business Objects was of course subsequently taken over by enterprise applications powerhouse SAP. While Business Objects has promised to continue supporting Inxight OEM customers, continued reliance on a direct rival's technology had surely become undesirable for SAS.

SAS CEO Goodnight stated that SAS is "always on the lookout for great technology that complements our own." This statement certainly describes Teragram, a company that has been technology focused to an extreme. For example, Teragram Direct Answers, if packaged in a customer-support solution, could find a ready market that has perhaps eluded Teragram as a technology vendor. I would surmise that Teragram's lack of solutions (that is, of domain or functionally focused applications) had limited their growth potential as a free-standing company.

Lastly, the deal could also eventually draw Teragram OEM customers to the SAS analytical-technology platform.

In sum, the technology, solutions, and positioning back-story indicates a smart move for both SAS and Teragram.SAS has announced their take-over of text-analytics vendor Teragram. The companies' joint press release states that "the acquisition will enhance SAS's own robust text mining and analytical BI offerings and extend them to enterprise and mobile search." Here's my take on positioning, technology, and solution considerations that likely motivated what seems like a smart move for both companies.