SAS Institute shares plans to IPO – in a few years time

Tom Paine

SAS Institute’s co-founder & CEO James Goodnight announced today that SAS was planning on a IPO. But no need to rush – the plan is to go public in 2024.

In early July, stories, rather concrete, circulated that SAS Institute was in talks to sell to chip giant Broadcom, for a price range of $15 to $20 billion. But it was reported that SAS had turned down Broadcom.

Cary, NC-based SAS trumpeted a possible return to growth, after years of being virtually flat, by posting 8.4% growth over the fist six months of 2021.

The announcement in part read:”To become IPO-ready, SAS will begin to take steps such as refining its financial reporting structure, streamlining certain operational processes, and enhancing its focus on the segments of its platform where the company can continue to succeed and grow to the benefit of its stakeholders. With this announcement, SAS will continue to invest significant sums in – and further develop – its AI capabilities and advanced analytics software and solutions, to continue to meet customer needs and extend its leadership in a growing, highly competitive and increasingly dynamic market.”

As for anything that looks ahead to 2024, don’t hold your breath.

SAS is fairly popular in the Philly area, mainly in life sciences, healthcare and other data intensive industries.

BEST OF THE BEST OF NJ UNIVERSITY STARTUPS PITCHED AT SPRING UPITCHNJ

ReLeaf was the winner of UPitchNJ |Screenshot by Esther Surden

 June 30, 2021  Esther Surden

If you want to find out about entrepreneurship at New Jersey’s colleges and universities, the best thing to do is to ask the students who compete at UPitchNJ.

UPitchNJ is the collegiate competition for aspiring entrepreneurs in New Jersey. These are students who have been through their own school’s entrepreneurship training programs and have created, and in many cases executed on, business plans they’ve developed.

This year the event was sponsored by Nokia Bell Labs (Murray Hill) and NGP Capital (Palo Alto, Calif.). After an inspiring 7-minute talk about innovation by Paul Asel, cofounder and managing partner at NGP Capital, a global venture firm with $1.2 billion in assets managed and backed by Nokia, student entrepreneurs did their best to impress the judges during the virtual event.

Asel told the group, “Innovation is a noble profession, and entrepreneurship is one of the highest callings. It’s made a significant difference in America and around the world. Seventy five percent of new jobs are created by startups.”

“Innovation is really the application of creating a new thing,” he said. For companies that are creating disruptive innovations, things that are totally new, the average industry experience of the founders is three or four years, he told the group. “Youth brings a novel and different experience.”

The judges for the event included Sean Kennedy, data and AI lab leader at Nokia Bell Labs; Divya Raghavan, who is on the investment team at NGP Capital; Thierry Klein, head of enterprise and industrial automation research at Nokia Bell Labs; Paige Brown, a portfolio analyst at NGP Capital; and Theodore Sizer, who leads the wireless-systems, technology and software research at Nokia Bell Labs.

The Winners

The first-place winner was ReLeaf, an NJIT company that is developing a tool for doctors and patients to track symptoms after a traumatic brain injury. The team also took the Audience Choice award, winning a total of $2,500. Pitching ReLeaf, Yashwee Kothari, founder, told the group that every year 2.8 million Americans suffer a traumatic brain injury, and that 41 percent of those patients have no follow-up visit with a physician within three months. Physicians also use only 2 percent of their time communicating with patients, she said. The tool — which consists of a mobile app for patients and a web-based dashboard for doctors — uses at-home check-ins to create more doctor-patient interaction and improve treatment outcomes.

Winning second place was Junction GMS, a Princeton University startup developing a platform that eliminates the need for professors to use many different programs in the digital grading process. This startup took home $1,500. The presenter, cofounder and CEO Cindy Han, noted that when professors use digital programs for grading/feedback, they typically waste five to eight hours on non-feedback tasks for each assignment while navigating multiple platforms. In addition, students can’t be sure which platform their feedback will appear on. Junction’s product changes all that by offering a suite of tools in a centralized platform.

The third-place winner of $1,000 was Solace, a Rutgers-based company in the mental health space. Pitching Solace, cofounder and CEO Laurent Shiels noted that the company was born out of his own experience of being diagnosed with depression and anxiety. He found that “securing mental health services was frustrating and disappointing,” and he had numbers to back up his claim that others felt the same way. Solace is an anonymous peer-to-peer personalized mental health platform designed to destigmatize mental disease, increase access to help and reduce the cost of mental health care, he told the judges.

The winner for best early-stage startup was ObSkill, of Stevens Institute of Technology. ObSkill was awarded $1,500. The company aims to disrupt internships by creating a new digital platform where students and startups come together to complete project-based initiatives.

The universities participating in this year’s event were: Drew University, Fairleigh Dickinson University, Montclair State University, New Jersey Institute of Technology, Princeton University, Ramapo College of New Jersey, Rider University, Rowan University, Rutgers University, Saint Peter’s University, Seton Hall University and Stevens Institute of Technology.

The video of the UPitchNJ contest can be found on this Facebook page.

This article originally appeared in NJTechWeekly. It is reposted here with the permission of Edith Surden, NJTechWeekly founder & Publisher

Biden, as usual, calls on Zandi as economics analyst; Penn Wharton Budget Model study sees little gain from Infrastructure Plan

Mark Zandi (Wikipedia)

Tom Paine

Mark Zandi, founder of West Chester-based Moody’s Analytics (originally Economy.com) , a Wharton Grad and Penn Economics Ph.d, has long been a backstop for Democrats on economic policy. I’m sure there are more nuances to his stances in private, but publicly he’s President Biden’s go-to guy for comments backing up administrative policy. On Wednesday night’s CNN Town Hall, Biden commented referring to Zandi:

“No, look, here’s the deal, Moody’s today … a Wall Street firm, not some liberal think tank, said, if we pass the other two things I’m trying to get done, we will, in fact, reduce inflation, reduce inflation, reduce inflation,” Biden said, “because we’re going to be providing good opportunities and jobs for people who, in fact, are going to be reinvesting that money back in all the things we’re talking about, driving down prices, not raising prices.”

Zandi’s report, released Wedesday, states:

“The nation has long underinvested in both physical and human infrastructure and has been slow to respond to the threat posed by climate change, with mounting economic consequences. The bipartisan infrastructure deal and reconciliation package help address this.”

“Worries that the plan will ignite undesirably high inflation and an overheating economy are overdone. The fiscal support it provides is only sufficient to push the economy back to full employment from the recession caused by the COVID-19 pandemic,” Zandi wrote.

Most economists I read (even Democrat regular Larry Summers) are skeptical about the latter argument, that pouring trillions more of borrowed money into an already gorged ecnonomy will help to reduce inflamed inflationary pressures.

While Zandi did say in the report that Biden’s investment plan would “lift productivity and labor force growth”, I haven’t seen where he precisely says that it will reduce inflation, though he expects inflation to stabilize in the near term anyway.

Update 8/9:

In a study released at the end of June authored by Jon Huntley, senior economist, The Penn Wharton Budget Model took a longer view and predicted an almost net zero macro impact on the economy from the Infrastructure bill looking out to 2040 and 2050.

“The headline numbers look small—0.1 percent of GDP does not appear to be a large number—however, these benefits continue to accumulate year after year for as long as the infrastructure is in use,” Huntley says.

If you’re hiring an onboarding specialist, there’s an even chance you will be hiring

Tom Paine

Something to pay attention to: If a company is hiring an onboarding specialist, there’s a fair chance that it might be planning to hire a few people.

One company in this situation is LearnUpon, a Dublin, Ireland-based company that has its US HQ in Philly. LearnUpon is a SaaS LMS (Learning Management System) used mostly in corporate or emerging SMB settings,. In late 2020, it raised $56 million from Boston-based Summit Partners.

Last October, LearnUpon’s CEO and co-founder Brendan Noud told TechCrunch the capital will be used in two areas:  to add more people to the startup’s engineering and product teams, and to bring on more people to help sell the product particularly in countries like the U.S., which already accounted for 70% of LearnUpon’s sales according to TechCrunch.

LearnUpon has over 200 employees overall. According to LinkedIn, it has 16 US employees all based in Philly.

Reports: Gopuff raises another billion (since confirmed)

Tom Paine

News outlets (TechCrunch and Boston Globe reporting) say GoPuff has raised another $1 billion. The Globe says BlackStone and Fidelity are participating. Fidelity would be a return investor.

A site named  Prime Unicorn Index discovered the information in a Delaware filing, TechCrunch reported.

TechCrunch says this round (H). will be at a $15 billion post-money valuation.

Some observations:

This bring’s Gopuff’s total funding to close to $4 billion.

My guess is this will be the last round before an IPO. (Although you never quite know.)

Gopuff must be performing well enough to justify continued investor confidence. Its goal for this year is to triple revenue over last year to about $1 billion.

More acquisitions are likely. Bandit, announced this week but acquired late last year, was likely a small one. Talks with UK-based Dija are progressing, TechCrunch reports. There will likely be another big one.

Although its too early to tell, the company and its investors must be looking towards some kind of end-game. A closer relationship with Uber Eats is a possibility.

The introduction of prepared food delivered from dark kitchens is both an opportunity and a risk factor. Keeping enough drivers onboard and fairly happy will be a challenge.

The biggest risk is keeping all the pieces in the air together in a hyper-growth environment.

Gopuff launches “Gopuff Kitchen”, says it acquired Bandit last year

Tom Paine

Gopuff announced today in a press release that it had acquired Austin-based Bandit, the “first app-only coffee shop in the U.S.”, late last year.

It also announced that it has expanded into a new category with “Gopuff Kitchen, a new offering that brings made-to-order hot and fresh food to customers alongside everyday essentials”.

Gopuff says “Gopuff’s mobile kitchen facilities are within or adjacent to its micro-fulfillment centers, enabling customers to order breakfast, lunch, dinner, and late-night food and drink alongside any other essentials all in a single order, delivered in minutes, for a flat fee of $1.95.”

Max Crowley, co-founder of Bandit, is now leading Gopuff’s business expansion efforts, including the Gopuff Kitchen vertical, the company says.

Philadelphia will be included in the pilot program for Gopuff Kitchen, along with more than 20 other markets.

Going from packaged goods to food prep is a different order of magnitude in terms of complexity. Many companies have tripped up making this transition.

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AFTER DEFLECTING TWO MAJOR CYBER ATTACKS, TRENTON’S CTO JOSEPH RIVERA SPEAKS OUT

Joseph Rivera, CTO, City of Trenton | Zoom screenshot by Esther Surden

Esther Surden,  Founder and Editor in Chief, NJTechWeekly

Like many cities in the U.S., Trenton is frequently under assault from phishing schemes and other cyberattacks. Most are routinely prevented through good practices by employees and effective security software.

However, during 2020 and 2021, two serious attacks tested the resilience of the city government’s IT department.

The attacks also led Mayor W. Reed Gusciora to launch an updated cybersecurity employee training course to ensure that “those attacks continue to be unsuccessful in the future.”

The First Attack

In the first case, a cyberattack in the spring of 2020, a criminal diverted about $982,000 from the City of Trenton, CTO Joseph Rivera told us. This occurred during the resolution of a civil suit, with an impostor posing as a representative of both the Trenton municipal government and Brit Global Insurance. Brit Insurance, a division of Lloyd’s of London, and Trenton’s IT department worked together to conduct an extensive forensic audit that proved that the city was not at fault for the breach.  The money had been diverted to a third-party account, which ended up closing.

Rivera, who has been Trenton’s CTO since March 2020, recalled that he went through all of the emails that had been sent and received pertaining to the incident, and was able to show the attorneys that Trenton wasn’t the source of the problem. As a result, Brit Insurance refunded the stolen funds to the city. In the final analysis, the impact on the city was zero, Rivera stated.

The Second Incident

In a second incident, cyber criminals, posing as Trenton Business Administrator Adam Cruz, sent out phony requests for quotes (RFQs) for millions of dollars in goods. This incident, according to Rivera, “could have cost the city tons of money in lawsuits for nonpayment, which we would have had no control over.” The criminals went to a lot of trouble to create this scam. They got a domain from Namecheap.com and created a website called “tren0nNJ.org.” They also had an email account for Cruz, acruz@trent0nnj.org. The “O” in the real domain name — TrentonNJ.org — was just changed to a zero.

The criminals also acquired an internet number, and when someone called that number, they got a person on the other end impersonating the real Trenton business administrator.

“When I realized what was going on, I went upstairs to the business administrator’s office and called the number in front of him,” Rivera said. “When the number was called, the scammer answered the phone saying, ‘Hello, this is Adam Cruz with the City of Trenton.’”

Using an outside account, Rivera contacted the criminals to make a purchase, and he received a complete purchase order that had the City of Trenton’s seal on it and a letterhead featuring the president of the City Council and other dignitaries. It even had a watermark.

Rivera noted that during his work in Trenton and elsewhere, he had built a rapport with his vendors, and was able to make sure they were on the alert. This time was no exception: he notified the vendors each and every time this scam was attempted, he said.

The city government also contacted Michael Geraghty, the State of New Jersey’s chief information security officer and director of the New Jersey Cybersecurity and Communications Integration Cell, who had only one suggestion: change the name of the Trenton domain to a .gov appendage.

Rivera reached out to the Trenton office of the U.S. Secret Service, which worked with the city’s IT and law departments to convince Namecheap.com that fraud had happened. After a cease-and-desist letter was sent from the city, NameCheap.com shut down the website and affiliated emails. No losses were incurred by the city. The whole incident, from discovery to the termination of the domain name, occurred within about a month’s time.

Unwavering Support

Rivera noted that through both events, the IT department enjoyed the unwavering support of Mayor Gusciora, who is very technology savvy and supportive of the projects Rivera is undertaking. The city government’s IT department is a small one, with Rivera as the only full-time employee. Technical support for the city’s cyber initiatives comes from Trenton-based Maestro Technologies, Rivera stated.

According to Rivera, the city has undertaken a number of other initiatives during his tenure as CTO, which started in the midst of the pandemic.

For example, the city offered its first online auction for vacant city-owned properties during COVID-19. “It was also the best one, as the city received the most income of any auction of these properties it had held,” he said.

“We also made a portal for vaccines. The state was doing a faith-based vaccination clinic and we were able to get 3,000 people in the span of a week and a half to sign up and be vaccinated.” Rivera has also developed a portal for the homebound, to help them receive vaccinations.

“We have an all-star health director, Dr. Adela Ames-Lopez, who is a fan of technology. She comes to me and she comes to the public information officer, and we get things done,” Rivera concluded.

This post first appeared in NJTechWeekly, Esther Surden,  Founder and Editor in Chief. It is reposted here with her permission.

SAS Institute backs off from Broadcom aquisition pitch

Tom Paine

Starting with a disclosure: After graduating from college as a liberal arts major with just one course in Basic under my belt, I found a position writing and editing reports for an academic research organization, which I wasn’t terribly excited about. I soon found after starting that they had troves of data to be analyzed, and I had access to an IBM mainframe and SAS. I quickly became fluent in SAS, and that lead to my interest in software, data analysis, and ultimately business. After two years, I left for graduate school.

I loved working with SAS. At the time, you could do things with it that were practically impossible to do with any other means.

On Monday, the story broke that Broadcom, the huge chip manufacturer that had essentially run out of room to grow in the semiconductor business and begun to acquire software companIes, was very close to an agreement to acquire Cary, NC-based SAS Institute, the company behind SAS. The price was reported to be $15 to $20 billion.

On Tuesday, though, word came that the deal was off. SAS co-founders Jim Goodnight and John Sall, the sole owners, had decided not to sell to Broadcom.

WRAL TechWire, a local Raliegh-Durham website, published data on SAS Institute’s revenue over the past five years:

  • 2016, $3.2 billion
  • 2017, $3.24 billion
  • 2018, $3.27 billion
  • 2019, $3.1 billion (context: SAS revenue in 2019 was relatively flat, growing 0.5% in constant currency. In USD, SAS revenue was $3.1 billion, reflecting accounting and pricing changes, and the impact of exchange rate changes.)
  • 2020, $3 billion

In fact, my memory told me that growth hadn’t been great in the previous five years either. For instance, in 2012 “SAS Achieves Record Revenue of $2.87 Billion in 2012, up 5.4 Percent over 2011.”, according to a press release. So there was virtually no growth between 2012 and 2020.

(SAS Institute reportedly saw 7% revenue growth in Q1 2021, though its to soon to assume a longer-term upward trend.)

If that was the performance of a publicly traded company, it would be slammed. But SAS institute is private.

In the age of Big Data, SAS Institute failed to grow; in fact revenue declined in real terms

Why? I don’t know, but would begin by dividing it into two diffeent businesses.:

1/ The Stats Packege

2/General business analytics

In Stats, SAS lost business to open source “R”; Also Python, with its own stats package may have had an impact.

In business analytics, SAS had value in the way you could manage and manipulate data and data sets. Some of that value remains, but there are so many other options now.

SAS Institute has a somewhat insular culture. Goodnigth built a modern day company town in Cary, and working there has been so enticing that the company likely has less turnover and cross-fetilization than its compettitors.

Broadcom is run by Hock Tan, who coincidentally has a residence on the Main Line though the business is located mostly in California and Asia. Tan is a very bright operator, and is known for his. sharp. cost-cutting in businesses he acquires. Which may have been something Goodnight didn’t want to see happen.

Also, SAS did not appear to be a good fit strategically with Broadcom’s business, either with the chip part or the software part (consisting mostly of its acquisitions of CA Technologies and Symantic.) A common observation is that Microsoft, with whom SAS already partners with, would be a better fit.

The Phiadelphia market is a strong one for SAS, given its heavy use in healthcare, life science and pharma.

See TechTarget’s take on SAS’ possible next steps, including the Microsoft scenario.