SAS's 2002 Revenue Rises 4.4 Percent
Business intelligence software provider SAS this week reported its fiscal year-end 2002 financials, and for the 26th consecutive year the company showed revenue growth.
The privately held Cary, NC, company posted overall revenue of $1.18 billion, up 4.4 percent from 2001 revenue.
SAS President and CEO Jim Goodnight cites a 4 percent increase in software licensing revenue over last year as a key factor for the company's strong showing.
"In this climate the demand for business intelligence solutions that help organizations cut costs, retain customers, and predict behaviors and outcomes is greater than ever," he says.
Analysts agree that analytics is on the rise. Despite the downward trend in technology spending, an AMR study states that many organizations are starting to use analytics--specifically, customer fulfillment--and supply chain management and enterprise performance management (EPM) applications. In a recent report polling technology-buying decision-makers at 100 U.S. companies with 2,500 employees or more, at least 40 percent of all participants will invest in all three applications in 2003.
SAS also saw continued growth in sales of its SAS Customer Relationship Management Solutions. More than $200 million of its 2002 revenue was associated with companies using SAS to provide customer intelligence. SAS officials claim that sales of its analytics offering were strong, as businesses with operational CRM systems from other vendors failed to show ROI in the past several years and looked to augment those systems with analytical solutions to better understand and predict customer behavior.
"SAS has a legacy as a leader in statistical analysis and the very-heavy-lifting side of the business intelligence market," says Josh Greenbaum, a research analyst and consultant at Enterprise Applications Consulting. "But I'm not sure their numbers reflect the state of the market, which is focused on the high-end, C level."
During the year SAS signed 1,100 new customers. SAS officials say these results are the outcome of efforts over the past two years to package the application of predictive analytics to specific business needs. The company's biggest growth market was financial services/banking, which grew by 25 percent. Insurance was also a high growth area, increasing by 7 percent over 2001. Overall revenue for packaged analytical applications in 2002 was $293 million.
In September the company launched a new business unit devoted to developing and selling marketing-analysis software. The company, which specializes in business analysis applications, said more than 40 companies already use SAS Marketing Automation, a software program designed to help companies plan marketing campaigns based on data about customers. With the formation of the new unit, SAS hopes to capitalize on what it expects to be a $2 billion software market in 2006.
SAS also upped its research and development investment by increasing R&D staff by 6 percent and investing 25 percent of revenue into R&D. Officials expect that investment to pay off by 2003.
SAS made two acquisitions as well: ABC Technologies (for its activity-based financial management and score carding expertise), and Verbind, a leader in real-time behavioral tracking and event-triggering technology.