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- Analytical CRM drives new business-

SAS announced today financial results for fiscal year 2000. Total revenue grew by 10.1 percent (16 percent before currency loss adjustment) to $1.12 billion, marking the company's twenty-fourth consecutive year of double-digit percentage growth. The growth in revenue was fuelled by a rapidly expanding market for analytical solutions that allow an organisation to gain intelligence from their data - especially from e-business and customer relationship management (CRM).

Nearly 75 percent of SAS' new business was tied to solutions for customer and supplier relationship management and enterprise performance management. These solutions are supported by SAS' world-class data mining and analytics, and data warehousing software optimised for decision support.

The next wave of CRM

As businesses began to implement new transactional CRM systems, they anticipated the ability to better understand their customers. Limitations in these systems led companies to move forward with SAS(r) solutions to bring together information from the transactional systems with data from other parts of the organisation, including new e-channels and data from outside sources, to create a platform for deriving intelligence from the data. Organisations are implementing SAS solutions, for example, to predict what types of products and services a new or returning customer will want, how likely these customers are to be enticed by offers from competing vendors, and how valuable they are to the company.

SAS is strengthening its end-to-end multi-channel CRM offering. To bring products to market more quickly, SAS is acquiring businesses that offer complementary technology and industry knowledge. In the last year, SAS acquired DataFlux for its data quality software, and Intrinsic for its marketing automation solution. These acquisitions immediately broadened SAS' offering for CRM, making it the most comprehensive enterprise marketing automation (EMA) solution on the market.

Global revenue contribution

Global revenue growth was 16 percent in local currency, which translated to 10 percent in U.S. dollars. Revenue growth in local currency was 21 percent for European countries, 22 percent for the Asia/Pacific region and 10 percent in the U.S. Revenue growth in the United Kingdom, the largest contributor to revenue in Europe, was 21 percent. Revenue contribution from global geographic regions is 52 percent from the Americas, 37 percent from Europe/Middle East/Africa, and 11 percent from Asia/Pacific countries. SAS plans to significantly increase investment in emerging markets such as Russia and China, and continue to expand its presence in larger international markets such as Japan and Germany.

Changing market dynamics

The competitive pressure in the overcrowded Internet marketplace drove both dot-com and click-and-mortar businesses to work smarter. "The old rules now apply to the new economy," said SAS CEO Jim Goodnight. "Eventually, a company must be profitable or it will cease to exist. We've seen tremendous interest in our solutions from companies that realise they need to understand their customers' purchase behaviour and measure their e-business performance so they can create a business plan that will put them in the black."

Demand is spiralling upward for analytical CRM software that provides intelligence from customer and Web traffic data. Many business intelligence and analytical software vendors benefited from this demand, but soon the sheer volume of data that came as a by-product of e-business drove customers to SAS' scalable enterprise software. With over two decades of experience managing massive amounts of data for Fortune 1000 companies, SAS was well positioned to deliver enterprise-class software for a 360-degree view of customers. Following this trend, SAS' percentage of income from retail, direct marketing and services increased from 10 percent to 13 percent. Percentage of income from telecommunications also grew significantly in 2000. Twenty-five percent of SAS revenue came from the financial industry, a leader in applying CRM methodologies and technology.

Directions for 2001 and beyond

Demand for software solutions that allow a company to make intelligent decisions in near-real time will accelerate over the next several years. SAS is the only CRM vendor that comes from a heritage of analytical software, making it the most capable of delivering intelligence from massive amounts of data from multiple channels and external sources.

Analysts predict that companies will feel greater pressure in a slumping economy to measure, predict and optimise business performance. Henry Morris, vice president for Applications and Information Access at industry market research firm IDC, said, "Companies seeking an edge over their competition are acquiring analytic applications to improve financial performance, customer relationships, and the production and delivery of products and services. As a major force in analytical software, SAS is well positioned to benefit from this direction in the marketplace."

SAS is already delivering solutions for customer and supplier relationship management and enterprise performance management. With established solutions in all of these areas, SAS is the only vendor capable of providing integrated enterprise intelligence. While sales in the CRM space have gained momentum, analysts view markets for performance measurement and SRM as nascent, and see potential for tremendous growth over the next few years. IDC projects that financial and BPM (Business Performance Management) analytic applications (including SAS EPM) will comprise a $2 billion market within three years. Analyst firm AMR predicts that SRM will be a $3 billion market in the same time frame. Further, Gartner estimates that less than 5 percent of Global 2000 enterprises have exploited SRM to achieve improved market competitiveness.

SAS is expanding on development of industry-specific solutions for CRM and performance management. New industry solutions will be developed for SAS' Enterprise Marketing Automation solution in the card services, insurance and telecommunications industries.

These new applications require a high degree of performance to process massive volumes of data with near-real-time results. A major new release of SAS - code-named Project Mercury - is currently under development. This release is built on a redesigned architecture optimised for exponential increases in performance for analytical applications.

On the business side, SAS is ramping up for accelerated growth by rapidly expanding its direct sales force worldwide. In 2001, SAS plans to increase the size of the sales force in the Americas by 150 percent and add more than 1,000 employees worldwide. The company is also restructuring sales compensation to create greater incentive for higher sales targets. Goodnight personally took charge of SAS America's sales to ensure that these new plans were implemented immediately.

In 2000 SAS recruited a senior executive - Graeme Woodley - to direct the creation of a new division focused on building new indirect sales channels. Progress in the partnering program is already evident as revenue associated with IT consultants and systems integrators increased 20 percent over 1999 revenue, accounting for about 10 percent of total revenue in 2000. Goodnight said, "We intend to be very aggressive in growing our partner program where it can complement our direct sales. I expect third-party channels to generate 20 percent of total SAS revenue by the end of 2002."

In the past year, SAS has aggressively stepped up efforts to increase its visibility in the marketplace. SAS launched a multimillion-dollar branding campaign, introducing a new logo and the slogan, The Power to Know(tm). The company began running a television and radio ad campaign, a first for the company. Throughout 2001 SAS will expand efforts to promote the new brand globally.

About SAS

SAS is the world leader in e-intelligence software and services, enabling its customers to turn raw data -- including the vast quantity generated by e-business -- into usable knowledge. Software from SAS, the world's largest privately held software company, is used at more than 35,000 business, government and university sites in 110 countries. SAS' 2000 revenues totalled $1.12 billion.

For further information, please contact the team at the SAS press office on:
tel:+44 (0)20 7544 3202, fax:+44 (0)20 7240 1910 or e-mail
saspressoffice@webergroup.co.uk


For more information on SAS, please visit http://www.sas.com/uk

SAS and all other SAS Institute Inc. product or service names are registered trademarks or trademarks of SAS Institute Inc. in the USA and other countries. (r) indicates USA registration. Other brand and product names are trademarks of their respective companies. Copyright (c) 2001 SAS Institute



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