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.
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.
Cranbury, NJ-based Infragistics, a company that builds both user experience (UX) and user interface (UI) tools, and whose mission it is to help its software-developer customers create simple and beautiful applications, celebrated a 31-year relationship with Microsoft recently.
The relationship is significant because it has helped the company’s UX and UI tools get into the hands of Microsoft’s many, many customers.
In a recent interview with Dean Guida, Infragistics founder and CEO, he told us, “One of our key goals is to be number one in the web UI developer tool space. We were number one in the world in the desktop UI developer space. Right now, we are in the top tier, but we want to be clearly the market leader. There are probably four or five ways we can achieve that, considering the way web developers build applications.”
New Tools for Microsoft Blazor
“With ‘Ignite UI’ for Blazor, we support developers working in Blazor by providing components to create data grids, charts and visualizations which are easy to use, offer enterprise-grade performance, and make it easy to manage data,” Guida said. “There is a big, active global community of .NET developers out there. And with our tools, those developers will be able to use their existing skills in C# and .NET to build web applications.”.”
Supporting the Angular Framework
In September, the company introduced Ignite UI for Angular v 10.1.0, which includes new features and enhancements for its Angular data grid, new theming capabilities and a set of new Material-inspired industry icons to improve productivity for developers creating applications in the Angular framework.
Ignite UI for Angular v 11.0.0 was released in November, just hours after Google released Angular 11, making it one of the first solutions available to support it, the company said. Ignite UI for Angular v 10.2.0 was released just one month after Google had released Angular v 10.0.0, continuing the rapid pace of the Angular team at Infragistics.
Guida said that Infragistics tools are low-code options that allow professional developers in businesses to build professional applications. “By delivering prebuilt components, it reduces the amount of code you have to write to create a beautiful and simple application experience. Our customers are independent software vendors like Intuit, who built TurboTax and Quicken; financial service companies like Morgan Stanley and Bank of America; and most of the big global banks, which build their own high-speed equity trading systems. And millions of developers worldwide use us to build their applications.”
Weathering the Pandemic
We asked Guida about how Infragistics has weathered the COVID-19 storm. “As a technology company, we easily transitioned to working from home,” he answered. “We had a lot of people who were already working remotely and had the infrastructure already in place to support it. As a result, our productivity has remained really high, so we didn’t take a hit that way.”
However, the leadership did worry about its corporate culture being affected by the pandemic. The company offers unlimited paid time off, but was having trouble getting people to take vacation time during COVID-19, when they weren’t able to go anywhere.
“We spend a lot of time telling people to take vacations. … In order to be productive in any role, whether you’re a technology company or not, you have to recover, you have to take time, you have to get good sleep, you have to have vacation. You have to do things that re-energize and refresh.” Guida explained that he wanted his people to take care of themselves, do fun things, spend time with family, pursue their hobbies, so that “when you come back to work, you’re refreshed and productive. It’s a win–win for both business and for people’s personal health.”
The company recently sent out care packages to its employees at home that included branded socks to keep them comfy as they work at their desks. The package also included subscriptions to some online games that people could play with their friends.
Sales Solves All Problems
Guida writes a weekly email to the company’s employees keeping them informed of what’s going on from a business point of view, and once a month holds a video conference with everyone around the globe. Besides talking about business topics, they talk about COVID-19 challenges, and he continuously reminds his employees to take care of themselves.
He added that, while Infragistics is doing fine, the pandemic-related global recession has impacted its sales. “We’re fortunate to have a lot of big enterprise customers, but a lot of the small and medium-sized customers of ours are being very reserved about doing new projects and spending money. So, we’re managing through a recession. Fortunately, or unfortunately, we’re 31 years old and we’ve been through downturns previously, so we have experienced this before, but doing it is never fun.”
The company hasn’t had to lay off any employees, he added, in response to our question. “We’re working super hard not to do that. I mean, talent is of the utmost importance. Talent is at a premium. And, then, sales solves all problems. Now, the one thing I’ve learned in 31 years is that whatever your problem is, sales can solve it. And so, we’re really focused on retaining our talent and using our cash when we need to. Luckily, at the end of 2020, we have a good cash position in our balance sheet, and we’re now able to use cash as an asset to keep our whole team together.”
While many people were taking advantage of the limited freedoms allowed by the State, a few notable things in the tech world were happening:
Rather than letting Covid-19 slow it down, Microsoft appears to be speeding up, or perhaps its just doing a better job at publicity. The biggest news of the week from Microsoft was the introduction of Microsoft Industry Clouds, beginning with Healthcare.
The standard for industry clouds is Veeva Systems for life sciences .Everything in Veeva’s cloud is highly integrated to work together. I’m not sure that Microsoft has achieved that yet, but its put alot of tools out there, mostly focused on communications and scheduling. But that’s a good start, and the company should be patient with a slow build.
Veeva is worth just under $30 billion today. Pharma has unique regulatory conditions that has probably made that possible. Its not clear that it can be replicated.
Other industry clouds are expected to be forthcoming from Microsoft.
In another telecom situation, Microsoft is reported to be close to making a $2 billion investment for a ~2% stake in Jio Platform, India’s largest wireless network.
Alibaba’s Cloud business saw revenue grow 62% to a $5.6B run rate in Q1 2020, but its still only a sixth the size of AWS. Given that the breakdown in economic and technological ties between China and the US is expected to worsen, China is likely to increasingly see Alibaba Cloud as a vital national. strategic asset. It doesn’t want Chinese business to depend on the US clouds.
Also, today another Chinese internet power, Tencent, announced plans to invest US$70 billion in new digital infrastructure. The five-year plan will have Tencent focus on fields that include cloud computing, artificial intelligence, blockchain technology and the Internet of Things. Other investments will go to infrastructure such as advanced servers, supercomputers, data centers and 5G mobile networks.
CNBC weighs in with a piece about how “Digital health stocks are surging because ‘suddenly now we’re in the future’ “, thanks to Covid -19. There’s a whole bunch of digital health startups in Philly that aren’t IPO-ready yet. One that was ready is Moorestown-based Tabula Rasa, which went public in 2016 and is now worth $1.35 billion.
Other items worthy of mention:
As this Twitter ad makes clear, GSK is teaming up with a sometime-competitor for a Covud-19 vaccine effort: