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At a Software Powerhouse, the Good Life Is Under Siege (Part 3)

by admin on Nov.23, 2009, under News

To be sure, the corporate cocoon in Cary can breed insularity. SAS, for example, was slow to recognize the brewing challenge from free, open-source alternatives to some of its products. A free programming language and set of software tools for statistical computing, called R, has become increasingly popular at universities and labs.

The company shifted course earlier this year and modified its software so programs written with R work seamlessly with SAS technology. “Shame on us for not engaging more with the open-source community,” says Keith Collins, senior vice president and chief technology officer. “But we’re committed to doing that now.”

THE architect of the SAS culture is Mr. Goodnight, a lanky, laconic billionaire. The benefits have built up gradually over the years as a series of pragmatic steps, he says. The day-care program began after a valued employee was about to leave to take care of her young child. The on-site medical checkups grow out of the belief that “good health is good business,” he says.

Today, SAS estimates that its health care center saves the company $5 million a year, by providing care more cheaply than an outside insurer and by not having employees leave the campus for doctor’s visits. Employee turnover at SAS averages 4 percent a year, versus about 20 percent for the overall party dresses for women industry.

The office atmosphere is sedate. There are no dogs roaming the halls, no Nerf-ball fights, no one jumping on trampolines — no whiff of Silicon Valley. The SAS culture is engineered for its own logic: to reduce distractions and stress, and thus foster creativity.

“The SAS model is sensible and durable; there’s nothing faddish or ephemeral,” says Richard Florida, a professor at the Rotman School of Management at the University of Toronto, who has studied SAS and is the author of “The Rise of the Creative Class.”

During the technology boom at the start of this decade, SAS considered a drastic change in its model: going public. Goldman Sachs bankers were brought in as advisers, and in 2000 SAS recruited a former Oracle executive, Andre Boisvert, as its president.

Under Mr. Boisvert, SAS installed a new financial reporting system and paid the sales force incentive commissions rather than salary only. But when technology stocks plummeted, the appeal of selling shares to the public also receded. Mr. Boisvert resigned from SAS in 2001 and is now an independent investor and consultant.

Mr. Goodnight recalls those days as a brief period of New Economy surrealism, and going public as a path wisely avoided. SAS, he says, is a culture averse to the short-term pressures of Wall Street, which he characterizes as “a bunch of 28-year-olds, hunched over spreadsheets, trying to tell you how to run your business.”

Unlike many other tech companies, SAS has had no recession-related layoffs this year. “I’ve got a two-year pipeline of projects in R & D,” Mr. Goodnight says. “Why would I lay anyone off?”

Mr. Goodnight, though 66, has no plans to retire himself. His fingerprints, colleagues say, remain all over the business, especially in meeting with customers and in overseeing research.

He is not only a statistician, but also a bit of gambler who enjoys calculating his chances. For example, he is co-author of a paper that simulated millions of possible outcomes in blackjack.

Mr. Goodnight regards his new rivals the way a confident card player might. He likes the odds, and he likes his hand.

“We’re pushing as fast as we can to stay ahead — on the cutting edge of everything,” he says. “We’ll do fine.”


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