After more than forty years at the helm of SAS, the company’s co-founder Jim Goodnight appears to be making succession plans. Trusted confidant Oliver Schabenberger joined the software giant back in 2002 and has been moving upwards and onwards through the ranks since his start.
Schabenberger is currently COO and CTO of the Cary, North Carolina-based company. The statistics-professor-turned-SAS-company-man never aspired towardS data analytics domination, he said. “I didn’t join SAS to be a manager, to be in the C-suite,” Schabenberger stated. “I joined to write code. I love programming and I was looking for a challenge.”
The quick-smiling Schabenberger has had a somewhat unconventional beginning to his software developer career. After receiving a PhD in a somewhat esoteric branch of study called forest biometry, the German-born professor realized his academic-heart belonged to statistics and took a tenure-track position at Virginia Tech.
He thought he was destined for a long, illustrious career in academia but that all changed when he took a developer position with SAS and realized that this represented the culmination of all his pursuits and passions up to that point. Schabenberger was Initially hired to research, develop and support the analytics tools for the SAS/STAT statistics program.
Goodnight and Schabenberger first met in 2009 after one of SAS’ financial institution clients asked the CEO about improving performance of one of their products. After a few inquiries, Goodnight learned of a SAS employee working on something called multi-thread computing. He asked Schabenberger to his office to learn more about his research. That began a close collaboration that has taken them through a decade.
Regardless of his close working relationship with his COO, Goodnight is clear that a change in the C-suite guard is not imminent. At 76 years old, the CEO is still reluctant to put a timeline on any exit plans and states grooming his replacement is part of a longer-term strategy. A spokesperson said Goonight still comes into the office every day and is a very active chief executive officer.
“I can’t retire yet,” Goodnight admitted ruefully. “My golf game is terrible.”
But things seem to be shifting for the software billionaire. When asked recently if he’d ever consider selling, Goodnight said he would consider it given the right conditions. A second thought later, he amended his original statement: “We are not considering a sale of the company for the foreseeable future.”
This message is very different than a decade ago when the company line on entertaining purchase offers was a very clear hard pass.
SAS provides a suite of analytics and business intelligence software aimed at helping companies optimize their operations. Despite its long run in the industry, it’s managed to remain both private and profitable with revenue estimated at $3.27 billion in 2018.
The company’s services and solutions are used by over 83,000 businesses, governments and universities world-wide but they are no longer the only game in town. Data analytics has attracted the attention of big players like Alphabet, Amazon, and IBM to the market and competition is fierce.
Goodnight continues to bring his A-game, however, and committed $1 billion dollars in putting artificial intelligence into SAS products. Over the last two years, the software giant has been incorporating AI functionality into their anti-money laundering offerings used by several big banks.
“I have always thought in terms of two years down the road,” Goodnight said of his company’s strategic direction. “Two years out, I think we will have brought AI to a lot more of our solutions.”
Even with Goodnight’s business acumen, some are concerned that SAS’ model is too large and unwieldy for today’s nimble tech market. “SAS might be past its sell-by-date,” said Rita Sallam, an analyst with Gartner. “They were really the only game in town maybe 10 years ago before the rise of open source, before the rise of cloud. There is a much broader set of options for people looking to deploy data science and machine learning.”
“They have a very large installed base of legacy software, but new growth is relatively flat,” Sallam added. She points to all the usual suspects for why the SAS model is passé – it’s too big, too expensive and too complicated.
Goodnight’s eventual departure may be an end to an era but Schaebenberger only sees possibilities for SAS where others see pitfalls. Despite its popularity, the cloud computing movement tends to favor standardized tools with pretty gui’s and edgy ‘disruption’ ad campaigns. The user no longer controls their data and security is only as good as the weakest link in the third-party cloud provider chain.
Legacy software may not be the dominant school of thought in today’s tech industry but there may always be a niche market for client’s that require more control over certain kinds of software configuration and onsite data-storage.
“Devices we’re using today, they’re somewhat smart, but they’re still kind of dumb,” Schabenberger said. “What if we could have those devices learn. What if the car actually learns how you drive and the phone learns your voice and what if they communicate with each other and form an informal network.”
Goodnight, on the other hand, has taken a much dimmer view when it comes to his long game. As the co-owner of Prestonwood Country Club, he has access to three separate golf courses but he believes the outcome is still likely to be just shy of tragic.
“I just don’t know if it will get any better,” he admitted.