SAS weathers financial storm

CARY -- Even though software company SAS gets 42 percent of its revenue from the hard-hit financial services industry, it's not seeing slackening demand for its products.

"As a matter of fact, because of problems in the financial industry, they are turning to us even more now to help implement better risk solutions," said CEO Jim Goodnight. "One of the things that got our banks in trouble was not doing a very good job of managing risk."

The bottom line: SAS's revenue is up 12.4 percent so far this year, and Goodnight projects that percentage growth for the year also will hit double-digits. Last year, the privately held Cary company generated $2.15 billion in revenue, up 15 percent from 2006.

SAS's business intelligence and analytics software is used by companies to analyze their business and predict trends. In the financial arena, that includes detecting credit card fraud, ascertaining who is -- and isn't -- a good credit risk for loans and determining how fluctuations in interest rates will affect profitability.

Such functions generate strong returns on investment, said Jim Davis, senior vice president and chief marketing officer. "As a matter of fact, that is money that people cannot afford not to spend during these economic times. ... That is what is going to make margins healthier."

The executives' comments were made Tuesday during SAS's annual media day, which this year attracted about 20 journalists from as far away as Japan and Poland to the company's sprawling campus.

This year's event focused on the impact of the changing economic environment. One of the slides during Goodnight's presentation even included the cover of a recent issue of The Economist magazine featuring the headline: "World on the Edge."

Other items discussed:

* SAS'S PERENNIAL RANKING AMONG THE BEST PLACES TO WORK: "First of all, it's the right thing to do," Goodnight said. "And we have found that if you do that, you work hard at making SAS a great place to work, then our employees are much happier. Happy employees make happy customers."

In addition to the United States, SAS also has been ranked among the best places to work in Europe, Japan and China.

* INDUSTRY CONSOLIDATION. Over the past 18 months, SAS has seen a wave of consolidation among its competitors in business intelligence software -- including IBM's acquisition of Cognos, Oracle's purchase of Hyperion and SAP's acquisition of Business Objects.

"If anything, we have seen less activities with these companies than we have seen in the past," Davis said.

SAS has identified 400 competitors around the globe. It competes most often against Oracle. "We only run into them 7 percent to 9 percent of the time," said Davis.

* USE OF SAS SOFTWARE TO TARGET DONORS. A panel discussion on how organizations are dealing with the economic downturn featured marketing executives from the World Wildlife Fund and Carnival Cruise Lines.

WWF, a global conservation group, uses SAS software to determine which potential donors to contact, and how frequently. One recent campaign boosted WWF's return on investment by 25 percent, said Terry Macko, chief marketing officer. Its database also helps the organization predict whether a donor will respond best to an image of a polar bear, a panda or a blue whale.