Category: SAS

How they stack up: IDC on Business Analytics

So here is intelligent enterprise on the latest IDC rankings on Business Intelligence and Business Analytics vendors. If you ever wondered how big the bog boys were- read it at

Citation:

http://www.intelligententerprise.com/info_centers/ent_dev/showArticle.jhtml;jsessionid=QL4IYMWB1MSIHQE1GHPSKHWATMY32JVN?articleID=219401120

In 2008, Oracle led the overall market, followed in order by SAP, IBM, SAS and Microsoft, the report said. Rounding out the top 10 were Teradata, Fair Isaac, Informatica, Infor and MicroStrategy, respectively

and

IDC divides the business analytics software market into four primary segments: analytic applications, business intelligence tools, data warehousing platform software and spatial information analytics tools.

and

Fourth-place SAS’ broad portfolio spans all business analytics market segments and is exclusively dedicated to this market. “The company leads in the advanced analytics tools segment and is within the top two vendors in two other market segments,”IDC said.

It’s a brilliant analysis and survey. IDC and Intelligent Enterprise- thanks a tonne for letting us know.

Making Government Transparent Using R

Here is a terrific interview on O’Reilley Radar at http://radar.oreilly.com/2009/07/making-government-transparent.html

It actually talks of using open source statistics like R to make Government more transparent- like analyzing waste.

Some interesting extracts- like I didnt know S is being maintained by SAS.( I thought Tibco had S Plus)

Citation-http://radar.oreilly.com/2009/07/making-government-transparent.html

James Turner: So switching gears, the other thing you’re talking about and a big part of your professional life is the R language. Now I will confess that like Erlang, R is something that is on my radar and I see and I look at it and I say, “Okay. When am I ever going to use it?” I mean Erlang is used some places, but R I guess has a very nichey type of audience, doesn’t it?

Danese Cooper: You know, interestingly enough that’s changing. I think that’s been true. R has been in production or in development, let’s say, for the last 20 years. It is patterned after the S language, which was developed in the ’60s at Bell Labs around the same time that UNIX and C were being developed. And it was S for statistics, right? R is sort of a, “If we had known then what we know now” version of S. They’ve been working on it for 20 years in an academic setting. So it has been very slow to grow. But just in the last couple of years, it’s really gotten to a place where it’s ready for enterprise use. And just this year, the people that maintain S, a company called SAS, S-a-s, in South America, south of this country, have announced that they’re going to have to support R, like it’s that widely used now, particularly in schools.

Danese Cooper works for Revolution COmputing that creates a wonderful and professional version of R called Revolution R – some of the work on parallelization and enabling 64 bit Windows R is great. Danese is also a solid open source credentials person having worked with the Board and also with Apache. O Reilley Media’s work in open source conferences is terrific as well.

That apart, the great stuff is in the rest of this must read interview which is available athttp://radar.oreilly.com/2009/07/making-government-transparent.html

Buying SAS Institute

At risk of annoying a lot of friendly people, I am going to ask an old question and try and answer it quantitatively.

Who can buy SAS institute?

Graph from-http://www.sas.com/news/preleases/2008Financials.html

SAS_revenue_lores

As you can see from the graph (note the post 2001-2004 period) – which is a nice smoothed curve, textbook normal distribution on the left side, SAS Institute grew during the tough economic year of 2008 to show slowed but firm revenue growth. However if you use the same price/revenue multiple as for the SPSS acquisition ( 1.2 billion/ 300 million (2008) revenues) – that would put a price of 9.2 USD billion on SAS Institute.

Who has that kind of money? Well it seems the usual suspects are-

1) HP- from http://h30261.www3.hp.com/phoenix.zhtml?c=71087&p=irol-IRHome

and

Click to access HewlettPackard_2008_AR.pdf

Cash and cash equivalents on 12.851 Billion USD as on April 30, 2009.

2) Oracle- Oracle would be hard pressed to integrate both Sun and SAS in the same year, but may have financial leverage to do both.

from http://www.oracle.com/corporate/investor_relations/earnings/4q09-pressrelease-june.pdf

Fiscal year 2009
GAAP revenues were up 4% to $23.3 billion, while annual GAAP net income was up 1% to $5.6
billion.  Total GAAP new software license revenues for the year were down 5% to $7.1 billion.
GAAP software license updates and product support revenues were up 14% to $11.8 billion.
GAAP operating income was up 6% to $8.3 billion, and GAAP operating margins were up 80
basis points to 36% in fiscal year 2009.

3) IBM -from ftp://ftp.software.ibm.com/annualreport/2008/2008_ibm_financials.pdf

Cash on hand was 12.7 Billion USD as on 31 Dec 2008, and the company repurchased it’s own stock in 2008

In the current economic environment growth can come through acquisitions of newer clients ( not much) or new companies. IBM has capabilities to acquire BOTH SPSS and SAS Institute and merge the strong R and D facilities.

IBM 2008

4) SAP – from http://www.sap.com/germany/about/investor/reports/gb2008/en/our-results/finances.html

various sources of loan capital:

profit after income taxes for 2008 was slightly lower than for the previous year, we increased cash flows from operating activities 12% to € 2,158 million (2007: € 1,932 million) through efficient management of working capital.

  • To finance the acquisition of Business Objects, we entered into an agreement for a credit facility that was originally for € 5 billion and is repayable by December 31, 2009 (amount outstanding on December 31, 2008: € 2.3 billion). We did not draw the full € 5 billion available under the facility because we paid part of the purchase price from available cash.
  • To increase financial flexibility, in November 2004 we obtained a € 1 billion syndicated credit facility through an international group of banks. We already had other lines of credit in place; the new line was arranged to provide additional financial flexibility. As in the previous year, we did not draw on this facility during the year.
  • At the end of 2008, the other, bilateral lines of credit available to SAP AG totaled approximately € 597 million (2007: € 599 million). We did not draw on these facilities during 2008 or 2007. Several subsidiaries in the SAP Group had credit lines in their local currency. These totaled € 52 million (2007: € 44 million), for which SAP AG was guarantor. At the end of the year, the subsidiaries had drawn € 21 million under these facilities (2007: € 27 million).

Given these cash positions it seems that almost everyone can buy SAS Institute if and this is a big IF- someone sells it. Microsoft which some years allegedly tried and lost at acquiring Yahoo ( only to realize huge savings!) and SAS, would be also another suitor for SAS- and Google also has the financial and operating synergies with the best text mining capabilities could also act as a white knight in merging it’s Google Applications and Enterprise solutions ( especially the cloud based OS and cloud based productivity suite) with SAS Institute. I personally would favor a Google- SAS Institute joint venture on enterprise software solely based on the common history and shared values ( Note Google has dual ownership stock including class A and class B shares)

Who is John Galt ?

Another option could be using the Google Way and for SAS Institute to go for dual ownership IPO, with class A shares for the common public and class B shares for the founders and executives. A substantial endowment to colleges and universities can also be expected in the future, given the philanthropic tradition of SAS Institute owners and executives. Also could SAS try and buy SPSS- it would lead to synergies in both software ( with the SPSS GUI) as well as new clients. At the very minimum it would boost the valuation of other stock in this sector as well make SPSS more realistic valued.

So who will buy SAS Institute?

I don’ know 🙂 and I am just brushing off my half a decade old financial valuation skills here

What is the true value of SPSS

A brief study of the charts at http://tr.im/vDA4 ( CourtesyGoogle Finance) would suggest IBM is getting a bargain  for SPSS Inc.

And Oracle, Microsoft and other companies ( even the privately held SAS Institute) can do well to step in and take it away or at the very minimum make the valuation even more steep for IBM to hold on to.

SPSS reported in 2007 Total Revenue of $291million with a Net Income of $33.73million and in 2008 Total Revenue of $302.91million with a Net Income of $36.05million. Shares of SPSS Inc. (Public, NASDAQ:SPSS) increased from about $35 per share before the announcement to $49.50 per share after the announcement.

Citation-

http://shareholdersfoundation.com/caseinvestigation/spss-inc-takeover-subject-investor-investigations

SPSS.

Chart at http://tr.im/vDA4

Hive Tutorial: Cloud Computing

Here is a nice video from Cloudera on a HIVE tutorial. I wonder what would happen if they put a real analytical system and not just basic analytics and reporting … like R or SPSS or JMP or SAS on big database system like Hadoop (including some text mined data from legacy company documents)

Unlike Oracle or other data base systems, Hadoop is free now and in reasonable future  (like MySQL used to be before acquired by big fish Sun acquired by bigger Oracle).

Citation-

http://wiki.apache.org/hadoop/Hive

Hive is a data warehouse infrastructure built on top of Hadoop that provides tools to enable easy data summarization, adhoc querying and analysis of large datasets data stored in Hadoop files

Hive is based on Hadoop which is a batch processing system. Accordingly, this system does not and cannot promise low latencies on queries. The paradigm here is strictly of submitting jobs and being notified when the jobs are completed as opposed to real time queries. As a result it should not be compared with systems like Oracle where analysis is done on a significantly smaller amount of data but the analysis proceeds much more iteratively with the response times between iterations being less than a few minutes. For Hive queries response times for even the smallest jobs can be of the order of 5-10 minutes and for larger jobs this may even run into hours.

If your input data is small you can execute a query in a short time. For example, if a table has 100 rows you can ‘set mapred.reduce.tasks=1’ and ‘set mapred.map.tasks=1’ and the query time will be ~15 seconds.


Reactions to IBM -SPSS takeover.

The business intelligence -business analytics- data mining industry ( or as James Taylor would say Decision Management Industry) have some reactions on IBM – SPSS ( which was NOT a surprise to many including me). Really.

From SAS Institute, Anne Milley

http://blogs.sas.com/sascom/index.php?/archives/557-Analytics-is-still-our-middle-name.html

Besides SAS, SPSS was one of the last independent analytic software companies. A colleague says, “It’s the end of the analytics cold war.”

I’ve been saying all along that analytics is required for success. Yes, data integration, data quality, and query & reporting are important too but, as W. Edwards Deming says, “The object of taking data is to provide a basis for action.”

The end of the analytics cold war- hmm. We all know what the end of real cold war brought us- Google, Cloud Computing, and other non technical issues.

From KXEN, Roger Hadaad

“The price paid for SPSS of four times revenues and 25 times earnings shows just how valuable this sector really is,” says Haddad. “But the deal has also created a tremendous opportunity for the sector’s remaining independent vendors that

KXEN is well placed to capitalize on. “There is no For Sale sign hanging in our window,” continues Haddad. “We launched KXEN in 1998 to democratize the benefits of data mining and predictive analytics, making them practical and affordable across the whole enterprise and not just the exclusive preserve of a few specialists. It’s going to take up to two years for the dust to settle following the IBM

“Former SPSS partners, systems integrators and distributors will face uncertainty.”

I think the PE multiple was still low- SPSS was worth more if you count the client base, active community, brand itself in the valuation. Tremendous cross sell opportunities and IBM with it’s nice research and development is a good supporter of pure science.  Yes, next two years would be facing increasing consolidation and more “surprising” news. At 4 times earnings, anyone can be bought in the present market if it is a public listed company. 😉

From the rather subdued voices on SPSS list, some subjective and non quantitative ‘strategic” forecasts.

http://www.listserv.uga.edu/cgi-bin/wa?A2=ind0907&L=spssx-l&F=&S=&P=36324

I think the Ancient Chinese said it best “May you live in interesting times”.

Having worked with some flavors of Cognos and SPSS, I think there could be areas for technical integration for querying and GUI based forecasting as well, apart from financial mergers and administrative re adjustments. I mean people pull data not just to report it, but to estimate what comes next as well.

This could also spell the end of uni platform skilled analysts. You now need to learn atleast two different platforms like SAS,SPSS or KXEN, R or Cognos, Business Objects to hedge your chances of getting offshored (Note- I worked in offshoring for almost 4 years in India in data analytics).

Answering what IBM will do with SPSS and it’s open source commitment to R and consequences for employees, customers, vendors,partners who have more choices now than ever.

…. well it depends. Who is John Galt?

Interview John Sall Founder JMP/SAS Institute

Here is an interview with John Sall, inventor of SAS and JMP and co-founder and co-owner of SAS Institute, the largest independent business intelligence and analytics software firm. In a free wheeling and exclusive interview, John talks of the long journey within SAS and his experiences in helping make JMP the data visualization software of choice.
JMP is perfect for anyone who wants to do exploratory data analysis and modeling in a visual and interactive way – John Sall

untitled2

Ajay- Describe your early science career. How would you encourage today’s generation to take up science and math careers?

John- I was a history major in college, but I graduated into a weak job market. So I went to graduate school and discovered statistics and computer science to be very captivating. Of course, I grew up in the moon-race science generation and was always a science enthusiast.

Ajay- Archimedes leapt out the bath shouting “Eureka” when he discovered his principle. Could you describe a “Eureka” moment while creating the SAS language when you and Jim Goodnight were working on it?

John- I think that the moments of discovery were more like “Oh, we were idiots” as we kept having to rewrite much of the product to handle emerging environments, like CMS, minicomputers, bitmap workstations, personal computers, Windows, client-server, and now the cloud. Several of the rewrites were even changing the language we implemented it in. But making the commitment to evolve led to an amazing sequence of growth that is still going on after 35 years.

Ajay- Describe the origins of JMP. What specific market segments does the latest release of JMP target?

John- JMP emerged from a recognition of two things: size and GUI. SAS’ enterprise footprint was too big a commitment for some potential users, and we needed a product to really take advantage of graphical interactivity. It was a little later that JMP started being dedicated more to the needs of engineering and science users, who are most of our current customers.

Ajay- What other non-SAS Institute software do you admire or have you worked with? Which areas is JMP best suited for? For which areas would you recommend software other than JMP to customers?

John- My favorite software was the Metrowerks CodeWarrior development environment. Sadly, it was abandoned among various Macintosh transitions, and now we are stuck with the open-source GCC and Xcode. It’s free, but it’s not as good.

JMP is perfect for anyone who wants to do exploratory data analysis and modeling in a visual and interactive way. This is something organizations of all kinds want to do. For analytics beyond what JMP can do, I recommend SAS, which has unparalleled breadth, depth and power in its analytic methods.

Ajay- I have yet to hear of a big academic push for JMP distribution in Asia. Are there any plans to distribute JMP for free or at very discounted prices in academic institutions in countries like India, China or even the rest of the USA?

John- We are increasing our investment in supporting academic institutions, but it has not been an area of strength for us. Professors seem to want the package they learned long ago, the language that is free or the spreadsheet program their business students already have. JMP’s customers do tell us that they wish the universities would train their prospective future employees in JMP, but the universities haven’t been hearing them. Fortunately, JMP is easy enough to pick up after you enter the work world. JMP does substantially discount prices for academic users.

Ajay- What are your views on tech offshoring, given the recession in the United States?

John- As you know, our products are mostly made in the USA, but we do have growing R&D operations in Pune and Beijing that have been performing very well. Even when the software is authored in the US, considerable work happens in each country to localize, customize and support our local users, and this will only increase as we become more service-oriented. In this recession, JMP has still been growing steadily.

Ajay-  What advice would you give to young graduates in this recession? How does learning JMP enhance their prospect of getting a job?

John- Quantitative fields have been fairly resistant to the recession. North Carolina State University, near the SAS campus, even has a Master of Science in Analytics < http://analytics.ncsu.edu/ > to get people job-ready. JMP experience certainly helps get jobs at our major customers.

Ajay- What does John Sall do in his free time, when not creating world-class companies or groovy statistical discovery software?

John- I lead the JMP division, which has been a fairly small part of a large software company (SAS), but JMP is becoming bigger than the whole company was when JMP was started. In my spare time, I go to meetings and travel with the Nature Conservancy <http://www.nature.org/ >, North Carolina State University <http:// http://ncsu.edu/ >, WWF <http://wwf.org/ >, CARE <http://www.care.org/ > and several other nonprofit organizations that my wife or I work with.

Official Biography

John Sall is a co-founder and Executive Vice President of SAS, the world’s largest privately held software company. He also leads the JMP business division, which creates interactive and highly visual data analysis software for the desktop.

Sall joined Jim Goodnight and two others in 1976 to establish SAS. He designed, developed and documented many of the earliest analytical procedures for Base SAS® software and was the initial author of SAS/ETS® software and SAS/IML®. He also led the R&D effort that produced SAS/OR®, SAS/QC® and Version 6 of Base SAS.

Sall was elected a Fellow of the American Statistical Association in 1998 and has held several positions in the association’s Statistical Computing section. He serves on the board of The Nature Conservancy, reflecting his strong interest in international conservation and environmental issues. He also is a member of the North Carolina State University (NCSU) Board of Trustees. In 1997, Sall and his wife, Ginger, contributed to the founding of Cary Academy, an independent college preparatory day school for students in grades 6 through 12.

Sall received a bachelor’s degree in history from Beloit College in Beloit, WI, and a master’s degree in economics from Northern Illinois University in DeKalb, IL. He studied graduate-level statistics at NCSU, which awarded him an honorary doctorate in 2003.

About JMP-

Originally nicknamed as John’s Macintosh Program, JMP is a leading software program in data visualization for statistical software. Researchers and engineers – whose jobs didn’t revolve solely around statistical analysis – needed an easy-to-use and affordable stats program. A new software product, today known as JMP®, was launched in 1989 to dynamically link statistical analysis with the graphical capabilities of Macintosh computers. Now running on all platforms, JMP continues to play an important role in modeling processes across industries as a desktop data visualization tool. It also provides a visual interface to SAS in an expanding line of solutions that includes SAS Visual BI and SAS Visual Data Discovery. Sall remains the lead architect for JMP.

Citation- http://www.sas.com/presscenter/bios/jsall.html

Ajay- I am thankful to John and his marketing communication specialist Arati for this interview.With an increasing focus on data to drive more rational decision making, SAS remains an interesting company to watch for in the era of mega- vendors and any SAS Institute deal and alliance will be  making potential investment bankers as well as newer customers drool. For previous interviews and coverage of SAS please use www.decisionstats.com/tag/sas