CARY, N.C., Jan. 31, 2018 /PRNewswire/ -- Increased customer demand for artificial intelligence, machine learning, fraud and risk management and cloud solutions strongly influenced continued revenue growth and profitability for SAS in 2017. The analytics leader posted US$3.24 billion in total operating revenue, up 1.25 percent over 2016.
"The analytics landscape is rapidly changing as organizations find new value in how they use data to gain insights," said SAS CEO Jim Goodnight. "We are helping our customers be more competitive with disruptive technologies such as analytics for the Internet of Things and artificial intelligence. Successfully innovating new technology and ways to help our customers is why we continue to be the company people turn to for unrivaled analytics expertise and business solutions."
Strategic growth areas
Last year, Asia Pacific and Latin America saw the highest growth as customers in those regions adopted more strategic uses of analytics. Government, manufacturing, retail and sectors of financial services saw strong momentum. Globally, customers such as American Honda Motor Company, international food conglomerate Cargill, Germany's Deutsche Telekom, global communications technology company Ericsson and the Chicago Bears rely on SAS® to gain more insights from their data.
As SAS customers sought to better engage with their own clients, the move to real-time customer engagement became more prominent last year. Targeted solutions like SAS Customer Intelligence 360, SAS Marketing Automation and SAS Marketing Optimization continued helping brands take the next best action with analytics, as highlighted by SAS' leadership ranking in real-time interaction management in 2017.
Revenue associated with the cloud rose 15 percent as customers sought cost-effective and rapid access to SAS software in a convenient cloud environment. Customers also recognized the value of adding SAS' expertise without the cost of building their own internal teams.
SAS' investment in risk management is paying off, as new sales in this area grew by 35 percent – an indicator that more companies see value in creating a risk-aware culture to meet regulatory demands and anticipate the impact of their investments. SAS expected credit loss and stress testing solutions go beyond compliance to help companies orchestrate and manage models and analytics for business benefit.
An uptick in SAS capital management risk solutions was driven by continued banking regulatory stress testing regimes and new financial reporting requirements like IFRS 9 and CECL. An increased need to make real-time credit decisions boosted revenue for SAS credit scoring solutions.
The advanced data governance and data quality capabilities offered by SAS Data Integration, which grew at 11 percent, became increasingly important for customers to contend with data protection regulations like GDPR. Hybrid data landscapes, which combine on-premises and cloud data, also required more sophisticated data integration technologies last year.
Shifts in fraud patterns that require more sophisticated detection methods, like machine learning, led to an 11 percent increase in SAS fraud and security solutions. Modernization of anti-money laundering programs and a need for proactive policing also contributed to this growth.
SAS enhanced the artificial intelligence portfolio with new product releases in machine learning, deep learning and natural language processing, enabling faster insights and simplifying the end-to-end solution for businesses. This focus to make machine learning easy to use and provide quick time to value was well received by SAS customers, and contributed to double-digit growth in machine learning last year.
SAS global partnering efforts again influenced more than one-third of new sales. This includes a growing demand for cloud solutions by midmarket customers with a desire to purchase through trusted local partners.
To strengthen alignment between product and revenue generating operations and carry out plans for growth and strategic investments, SAS appointed Oliver Schabenberger as Chief Operating Officer effective January 1, 2018. He also retains his role as Chief Technology Officer.
"I'm eager to focus on our strategic global direction and investment areas supporting our continued growth in critical and emerging areas," said Schabenberger. "This includes targeted investments to accelerate growth in core strengths, including artificial intelligence and machine learning, analytics, fraud, risk management, data management and customer intelligence. In addition, we see incredible growth opportunity in IoT and expansions into the midmarket."
Last year alone, SAS revenue associated with IoT grew by 60 percent. Industry analyst firm IDC estimates the size of the analytics market in IoT will grow to over $23 billion by 2020. An estimated 20.4 billion connected things are projected to be generating massive data volumes by 2020. Capitalizing on this opportunity will require innovation, like SAS Event Stream Processing, which gained tremendous traction in 2017. And SAS has created an IoT division combining R&D and marketing expertise that will continue SAS' focus on providing edge analytics that add great value to customers' IoT investments. SAS plans to build out a similar business unit around fraud management.
Looking further ahead in 2018, SAS will continue heavy investment in embedding artificial intelligence across the SAS portfolio. Plans are also underway for a center of excellence to help SAS customers understand and apply artificial intelligence in ways that can transform their businesses and the world around us. For example, in financial services, artificial-intelligence-enabled natural language processing can help unlock new services for customers and revenue streams for businesses. In the energy sector, deep learning tools enabled by artificial intelligence can help maximize investments in renewable energy by optimizing placement of wind farms.
New offerings to enhance the cloud experience with SAS applications will include managed container services for customer infrastructure in public or private clouds.
Continuous innovation sustains market leadership
Analysts continue to laud the company's innovation and market dominance, naming SAS a leader in predictive and advanced analytics. According to IDC, SAS holds a 30.5 percent share of the advanced and predictive analytics market, well over twice the market share of the next-closest competitor. SAS has led – and grown – in this category since IDC started tracking the market in 1997. In 2017, analysts also named SAS a leader in streaming analytics, machine learning, big data, data science platforms, real-time marketing, data integration, data quality, fraud detection, risk management and retail analytics.
"When it comes to driving the business on data and analytics, everyone has high expectations," said SAS Chief Marketing Officer Randy Guard. "SAS delivers a platform that addresses the full analytics life cycle – data, discovery and deployment of decisions. Along with the openness that the SAS Platform offers, we enable our customers to bring their data and analytics together across their entire data science community."
Maintaining market leadership is heavily dependent upon innovation. Year after year, SAS reinvests about twice the average of major technology firms into R&D – 26 percent in 2017. This investment supported the addition of artificial intelligence capabilities to the SAS Platform. And enhancements to SAS® Viya® extend the SAS Platform to deliver additional capabilities for analytics-driven organizations, including Cisco, the American Red Cross, Munich Re and Lockheed Martin. This modernization appeals to a growing number of SAS Viya adopters seeking to bring together all their analytics assets, and unite SAS with open source interfaces and languages.
Champion for education, sustainability and inclusivity
In addition to business success, SAS has always put a heavy emphasis on making a difference in the world. Last year, efforts around education, sustainability and data for good landed SAS on Fortune's 2017 list of companies that "Change the World."
SAS is deeply committed to developing the next generation of innovators through education, and makes it easy to build coveted analytics skills by targeting worldwide education initiatives in STEM. SAS University Edition provides free access to SAS software so anyone can learn how to analyze data. Thousands of professors, students and researchers take advantage of free, cloud-based SAS OnDemand for Academics. Downloads and registrations of these two products have reached nearly 1.5 million.
From helping tackle opioid addiction and safeguarding vulnerable children to protecting fragile species through conservation efforts, SAS' deep bench of analytics solutions change the world by analyzing data to solve critical humanitarian issues. Expanding on our social innovation efforts, SAS introduced GatherIQ™ – a crowdsourcing initiative bringing together volunteers to solve social challenges. The GatherIQ app has been downloaded by people from 69 countries who want to use data for good.
SAS fosters an award-winning, sustainable workplace that has a positive impact on our future. The company reduces its environmental footprint with programs focused on energy conservation and solar projects, emission management, pollution mitigation, water conservation, waste reduction and recycling, procurement and green building.
Such passion for doing good ignites employees' creativity and gives them the opportunity to effect change. Continually recognized for providing an enriching work environment, SAS remains a staple on best workplaces lists around the world. SAS is also considered a best workplace for diversity and inclusivity, women and gender equity, as well as a top company for millennials, recent grads and IT professionals.
SAS is the leader in analytics. Through innovative software and services, SAS empowers and inspires customers around the world to transform data into intelligence. SAS gives you THE POWER TO KNOW®.
SAS and all other SAS Institute Inc. product or service names are registered trademarks or trademarks of SAS Institute Inc. in the USA and other countries. ® indicates USA registration. Other brand and product names are trademarks of their respective companies. Copyright © 2018 SAS Institute Inc. All rights reserved.
IDC, Worldwide Business Intelligence and Analytics Tools Software Market Shares, 2016: Here Comes the Cloud (Doc # US42072417, June 2017)