And to all a Goodnight

Jim Goodnight is expanding his empire one product at a time, one building at a time.

On Thursday, that building happened to be in Toronto. The CEO of SAS Institute Inc., still the world’s largest privately-held software company, was in town to officially open the building, which is drawing accolades for its energy-efficient design. Dubbed LEEDS (Leadership in Energy and Environmental Design), the 110,000 sq.-ft, $30-million facility is the first of its kind in the city, reportedly constructed from 55 per cent recycled material and operating at half the power of most other buildings its size.

But long-time SAS leader Goodnight isn’t running out of steam. He spoke to ITBusiness.ca after the official opening about the new office, SAS’s latest data storage strategy and what he’s trying to do to fight database dogma.

ITBusiness.ca: What does the opening of the new Toronto office mean for SAS Canada?

Jim Goodnight: We thought it would be grand if we could come up and take part in the opening. This is our Canadian headquarters. We run all of Canada out of here. It’s predominantly sales and marketing and tech support. Most of the R&D that we do is in North Carolina.

We were downtown in BCE Place. We had a couple of floors there, but we were running out of space because the Canadian office continues to grow. We projected ahead for about two years and decided we’d be better off with our own building rather than continue to pay rent downtown. That’s what got the idea of the building going. Then our manager pitched the idea of being a more environmentally-friendly building. I think 60 per cent of the materials in the building are recycled material. We were able to just cut down on a lot of things. The glass in the building, the roof . . . they’re all designed to use less energy.

ITB: A lot of your new product releases seem to be focused on specific verticals like retail, telecommunications and financial services. Do you develop all your products with a certain audience in mind?

JG: We started back in 1995 with what we call horizontal solutions – things like financial management that can be used across all the industries, human capital management, supplier relationship management and things like marketing automation. These things have been around for about 10 years now. Back around 2000 we decided that we needed to do more verticalization. We looked at the financial sector, for example: 35 per cent of our worldwide revenue – last year it was almost US$1.75 billion – comes from just the financial sector. (We thought) we really ought to be providing more software just for that sector. Why shouldn’t we, instead of just letting the niche players do it? The fact is, we have an incredibly powerful platform. Why not use it to build some of these specialized applications?

ITB: Are you planning on addressing any new verticals in the near future?

JG: I can’t think of any right now. There’s still plenty to do in the financial space. And we’re still working with (stores like) Coles and Home Depot on pricing optimization. We’re also doing optimization on package sizes. Rather than sending the same size packages of sweaters or blouses to every store, we help determine the different size of packages that should be sent.

ITB: Are you trying to persuade customers to change the way they store data? Your latest data integration strategy suggests that they may want to look elsewhere for their database needs.

JG: With data warehousing, you really want to store your data so it can be very rapidly read and understood. The purpose of a data warehouse is to make sure the data is available to all the people in the organization that have been authorized to get at it and work with it. What often happens, unfortunately, is people use databases, like Oracle, IBM DB2, Teradata, that are designed to do a lot of very small transactions very rapidly. They’re really not designed for reading the entire data into memory for computational purposes. With SAS, we find with most applications we can store 10 times more data in the same amount of disk space as, say, Oracle can. In fact, we can process it and read it much faster for the type of applications we provide. There’s a lot of confusion, I believe, in IT that people think everything has to be put into a database. This is just not correct. The amount of wasted space that you have for indexes and rapid query capability is just in the way.

ITB: A lot of people use those types of databases. Do you foresee any resistance in trying to get them to switch over to SAS architecture?

JG: We’ve had some customers ask about why their database costs keep going up as they need more processors to handle more and more data. They’re having to pay more and more money for relational databases that they don’t really need when it comes to storing data for data warehouse purposes. You don’t need back-up and recovery. A data warehouse is created fresh on a daily or weekly basis. The data is coming out of operational systems.

There are some IT people that understand this and some that say, “I’m sorry, but we’ve standardized everything on DB2.” There are some IT shops that are just absolutely dogmatic when it comes to storage. Unfortunately, they don’t realize how much they’re really they’re costing their company.

ITB: If it’s about dogma, then isn’t that a mindset that’s going to be tough to break with some customers?

JG: There’s some banks that we deal with that are very dogmatic about it. And banks are concerned about security. They don’t want to have any extra copies of anything made, even though they tend to leave things like tapes in bus stations and other things like that.

ITB: A few years ago, the business intelligence market went thorough a period of heavy corporate consolidation. Is it safe to say that era is over?

JG: I don’t know if Oracle can borrow any more money. They’ve got to go through an integration process. They still buy a few small companies every once in a while. I think SAP picks up small companies. It’s hard to say. These things come in spurts. Oracle were never big purchasers of other companies and all of a sudden they decided that’s what they wanted to do to grow the company.

There are three main players in (pure) business intelligence now: SAS, Business Objects and Cognos.

ITB: With all the operating system announcements recently – Microsoft and Linux; Microsoft and Apple – does that change your perspective on software development?

JG: We’ve had a lot of discussions with (Sun Microsystems CEO) Scott McNealy, for example, on porting our software to run on Solaris under Operton. Those discussions are ongoing. That’s the only platform right now we’re looking to send SAS to. IBM wants us to port to Linux on the mainframe and we say, “Well, how much are you going to pay us?” It costs a lot of money to port software to a different machine. It’s not so much the porting. We can handle that fairly easily. It’s the testing. All this stuff has to be tested in a new environment. We don’t ship our software before we test it.

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