CEO, SAS Institute
A lot of people are watching to see what Jim Goodnight will do as the software industry consolidates around him. The beauty of owning your own $2 billion-a-year company is that the only decision that really matters is your own. For Goodnight, CEO of SAS Institute, the answer has been a resounding "no" to numerous inquiries from interested suitors in the past year.
"I don't want someone to come in and slash and burn and get rid of happy employees," he says in his Southern drawl. Acquisitions, he says, "have nothing to do with innovation and creativity. It's adding numbers to the bottom line so the CEO looks better."
And really, what would be the point? Goodnight owns two-thirds of the private company, which dominates a market no competitor has tapped with any significance. SAS sells software and services for data integration and advanced analytics--the most complex, yet most important, piece of business intelligence--to the world's largest financial, insurance, retail, and telecom companies. All this grew from software Goodnight developed for studying agricultural data as a doctoral student in statistics in the early 1970s.
To meet Goodnight's ornery and opinionated side, just mention a competitor. "IBM and SAP acquire because they're so stagnant they're unable to grow themselves," he growls. Goodnight turns soft, though, when talk shifts to his 10,000 employees. Google before its public stock offering even sent HR execs to SAS's wooded Cary, N.C., campus to learn about perks such as on-site hair stylists and physicians, a health club, and free snacks and subsidized meals.
Unlike Google, Goodnight has shunned the move to open workspaces. Employees have their own offices, since he believes people need quiet places to think and create. That's not surprising for a man who consistently chooses independent thinking over pack mentality.
Q&A With Jim Goodnight
SAS Institute is considered an acquisition target, yet you've insisted on keeping the company independent. What would it take for you to change your mind about merging with another company?
We've had numerous opportunities in the last year and a number of inquiries. We're involved with two different acquisitions ourselves right now. There's just so much going on right now and were growing very healthfully. We'll pass the $2 billion revenue mark this year. So I'm just very pleased to continue on as an independent.
Advanced analytics is an important technology, but how can companies get beyond the costly barrier to entry?
The biggest problem with smaller businesses is you've got to have someone who can properly interpret what's going on with models. In terms of talent, those with a master's degree in statistics would be useful. A master or Ph.D. in operations research would be good.
We're seeing a lot more interest and partnerships around the areas of advanced analytics from traditional business software vendors. What's happening here?
Almost every major company in world has implemented an ERP system, and what they found is they're not getting more information from them. They're looking backwards. They're not doing a good job of forecasting or predicting behavior. With SAP, their whole data warehouse strategy has been a failure. SAP really has to move upstream and into analytics market. That's where everyone has to be going. There's no future in ERP. It's just a plummeting business.
What impact do you think BI consolidation will have on the industry, and on SAS in the coming year?
Typically, when one of our competitors gets acquired, it leads to totally befuddled management. That's always been good for SAS. It just gives us an open field to run when a competitor gets sucked into a black hole. It's great.
Your company regularly appears on "best places to work" lists, and your employee perks were a role model for Google. How important is corporate culture to business?
It's certainly needed if we're going to continue to be successful and innovate in the U.S. You can't have innovative employees if they're disgruntled. Software is a business almost entirely about innovation. It's creating new things and solutions. The main point is you have to have an environment that fosters that type of creativity.
If you weren't CEO of SAS, what would you do?
That's the problem. I don't know what I would if I wasn't CEO of SAS. That's why I have no inclinations to stop being that for a while. SAS is just too exciting. It's too much fun to work here. That's why we have such good retention; even I don't want to leave.
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