Inside Extreme Scale Tech|Thursday, August 28, 2014
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From Farms to Fraud, SAS CEO Reflects on Analytics Market 

Photo © Eric Miller/World Economic Forum 2006emiller@iafrica.comJim Goodnight

There aren’t many tech companies one can rattle off that have a 40-year history of solid revenue growth, but according to Dr. Jim Goodnight, CEO of SAS during a recent sit-down with us, the road ahead still appears to be paved in gold.

During his long tenure at the helm, Goodnight has seen a number of industry trends and buzzwords come and go (including the two terms he uses with tempered disdain big data and cloud). The interesting story, however, isn’t in these larger technology paradigms, it revolves around how users are looking to the time-tested, sturdy SAS platforms to optimize, manage and understand their own growth. And it turns out that the markets that are hottest for SAS right now reveal some striking news about the future of fraud—or rather, the eventual lack thereof if all goes as planned.

The roots of SAS are in software developed at North Carolina State University, which at the beginning, was used primarily by agricultural and pharmaceutical companies to run controlled experiments with defined models. As Goodnight reminisced, “it was really only in the 1980s or early 1990s where banks started to take all the data they’d been collecting and doing something with it—creating models to better forecast what people might be interested in.”

That trend has taken SAS to this moment where banking is at the top of their hot markets list. For SAS, this has been a boon as banking customers look to SAS for everything from complex fraud detection (specifically credit card related) to customer intelligence and of course the expected optimization efforts.

“Fraud detection is the biggest segment we have,” said Goodnight, pointing to use cases across the board—from healthcare and insurance companies to those in banking noted above. He says that while government is one of their larger customer areas, the federal space has all but come to a standstill. He notes that between $30 to $40 million in procurements are sitting still in federal waters.

Even still, Goodnight says that they are seeing rapid uptick in their state and local government business. Again, this is fueled by fraud detection.  The CEO noted that it’s especially robust with state governments “because they have to pay 1/3 of the Medicaid expenses, with the federal government picking up the rest, so states are very interested in stopping fraud. There are more states turning to us to help with this because the ROI is strong –they might spend $2 or $3 million with us but we’ll return $30 or $40 million within first 6 months.”

On that note, Goodnight said, “fraud detection is very labor intensive, there is still a lot of time spent trying to build those models, it’s not something we can just throw in the hopper and say ‘go detect fraud’ for instance.” For those models to be developed and deployed, however, means that there is an ever-driving need for more analytics professionals.

To his point about watering a new crop of analytics pros, Goodnight pointed to the new Masters of Advanced Analytics program at his alma mater (and birthplace of SAS) North Carolina State, which SAS is supporting. They are churning out 80 data scientists per year and are also working with other universities, including Texas A&M, to increase the number of model builders for the next generation of SAS implementations.

Outside of their push to train a new generation of data scientists, SAS expects to continue developing its new relationship with SAP, which was announced last week, as well as to build out capabilities in its High Performance Analytics and Visual Analytics products. We talked to some of the end users of both of these last week during the SAS-led Premier Business Leadership Series event in Orlando. More from those on-site conversation to be found this week here and on our sister publication, Datanami.

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