CARY — Business software giant SAS says double-digit revenue growth is a possibility this year.
Jim Davis, senior vice president and chief marketing officer, said in an interview at the company’s Cary headquarters that he expects double-digit sales growth in the U.S. and Asia-Pacific markets this year. But overall sales are being hurt by Europe, where sales have been flat so far because of the continent’s economic woes. In 2011, Europe, the Middle East and Africa accounted for 42 percent of SAS’s revenue.
Davis said he is encouraged that the company has a “fat pipeline of new business” in Europe, but it’s hard to say how quickly that it can convert potential customers because the struggling European economy has lengthened the sales cycle.
“If I’m going to be optimistic, we’re going to see double-digit growth,” Davis said. “If I’m going to be pessimistic, I’m going to say we’re going to see lower, single-digit” growth.
Corporations, government agencies and others use SAS business intelligence and analytics software to analyze their operations and predict trends.
Analysts said that SAS’s revenue picture is in line with market trends.
“They are holding their own,” said analyst Bert Hochfeld of Hochfeld Independent Research Group. “Frankly, analytics is the best space in the enterprise software world these days.” Enterprise software refers to applications used by big companies and other large organizations.
Analyst Michael Schiff of MAS Strategies said SAS’s revenue picture also benefits from an extremely loyal customer base.
“They have a reputation of doing the right things for their customers,” he said. “I think that it’s a company people enjoy doing business with.”
Last year SAS was tops in advanced analytics with a 35.2 percent market share, up from 34.8 percent in 2010, according to research firm IDC. In the overall business analytics market, which also includes segments such as data warehousing and business intelligence, its market share was 7.1 percent last year.
If SAS’s revenue growth comes in at the low end of Davis’ projection, it would fall short of the 12 percent spurt that propelled the company to $2.72 billion in revenue in 2011. Last year’s growth far outstripped the 5.2 percent rise in sales the company saw in 2010.
The fourth quarter is crucial for SAS because that’s typically when the company logs more than 30 percent of what it calls “new sales” – sales to brand-new customers or sales to existing customers that expand their use of SAS software.
Davis said he is pleased with the company’s overall performance and “very pleased” with sales growth in the United States.
“I really didn’t think it would be up as much as it is right now,” he said of U.S. sales. “I thought people (would still be going) around wearing T-shirts saying, ‘I’m cautiously optimistic but I’m not buying anything.’ ”
SAS is privately held but discloses its annual revenue, which has increased every year since it was founded in 1976. The company doesn’t disclose its profit.
“What we sell in the marketplace has a very strong, quantifiable return on investment,” Davis said. “We’re selling fraud-detection software. We’re selling risk-calculation software. ... that’s why we grow even in a down economy.”
SAS relies on annual subscription fees from customers, which makes it harder to increase revenue compared to competitors that typically charge a large upfront fee plus much smaller maintenance fees in subsequent years.
SAS is one of the Triangle’s largest private employers and has steadily added to its local workforce. It broke ground in the summer on a 213,000-square-foot building at its sprawling Cary campus that will house about 650 workers when it is ready for occupancy in 2014.
SAS has 5,048 workers in Cary after adding 219 employees so far this year. Company-wide, SAS has 13,343 workers, up 6.2 percent from the beginning of the year, “which is ahead of what we had budgeted for this year,” Davis said.
New products
Looking beyond 2012, Davis is bullish on the market’s reception of the company’s High-Performance Analytics offering, unveiled at the end of last year, which he called “probably one of the most significant technology advancements in SAS’s 36-year history.” It enables dramatically faster data analysis.
“It’s a brand-new revenue stream,” he said. “We have a very large sales pipeline for next year. We are going to see this have a heavy impact on SAS’s revenue next year.”
High-Performance Analytics, which includes various components that customers can pick and choose from, enabled a Singapore bank to perform a risk analysis that previously took 20 hours in just 15 minutes, Davis said. A European telecommunications company with about 12 million customers that used to devote 10 hours to analyzing how best to optimize its marketing dollars can now do it in 90 seconds.
“As people are now relying on data to support their day-to-day decision making, it has become strategic to their operations,” Davis said. “As such, they’re demanding answers much quicker than they might have in the past.”
Davis said SAS also has embarked on overhauling the user interfaces of a number of its products. Earlier this year it revamped the interface for its Visual Analytics Explorer software, a data discovery tool used for analyzing large amounts of data and detecting patterns.
But the reaction to Visual Analytics Explorer’s interface has been so upbeat that that company is considering making its “look and feel” standard across all of SAS’s products, Davis said.
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