SAS Turned Down 'Numerous' Acquisition Inquiries This Year, Says CEO
CEO Jim Goodnight criticizes Oracle's acquisition strategy as resulting in too many job losses for the sake of profitability.
SAS Institute still stands independent in the rapidly consolidating software industry, yet has had plenty of offers, CEO Jim Goodnight said in an interview.
SAS had "numerous opportunities in the last year [to be acquired] and a number of inquiries," Goodnight said. With healthy revenue growth numbers, SAS doesn't need the help of a larger company, he said, and he also fears that an acquisition would require him to fire employees on his 10,000-person payroll. Goodnight co-founded SAS with executive VP John Sall in 1976 and owns two-thirds of the company, which specializes in software for data integration and advanced analytics.
With more than $2 billion a year in sales, SAS is believed to be the world's largest privately held software company. Its success has made Goodnight one of the country's richest men, with an on-paper wealth of about $8.5 billion.
SAS is the world's largest provider of advanced analytics software, according to IDC, and, because of recent acquisition activity, is the only large pure-play vendor left in the broader area of business intelligence software. All of the other large BI companies have been (or are being) absorbed into larger tech companies. SAP is acquiring Business Objects, once the world's largest independent BI vendor, for $6.8 billion, and IBM is acquiring Cognos for $5 billion. Oracle acquired Hyperion for $3.3 billion earlier this year. After SAS, the next-largest pure-play BI vendor is MicroStrategy, with $313.8 million in sales last year.
After Oracle acquired ERP software company PeopleSoft for $10.3 billion in 2005, it laid off about 5,000 people; most of those who lost their jobs had been on PeopleSoft's 12,000-employee payroll. "I see what happens when companies merge and 30% to 40% of staff gets laid off," Goodnight said. When Oracle does an acquisition, he said, the primary goal is to dramatically improve profits of the company being acquired. "When they do that, they have to slash head count drastically. I certainly haven't been interested in selling SAS because I don't want someone to come in and slash and burn and get rid of happy employees," Goodnight said.
An acquisition, Goodnight said, would destroy SAS's corporate culture. "We spent many years building a culture here that's honed out of respect for our employees, and is one of innovation and creativity; one of exceeding customer expectations," he said. "I don't want to see that end by SAS being merged into another company."
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