4 min read.Updated: 03 May 2020, 01:21 PM ISTBloomberg
Financially we are in good shape: Jim Goodnight
We’re not going to have any furloughs or layoffs in response to the pandemic, he said
SAS Institute has recorded a profit every year since it was founded in 1976. The coronavirus will probably end that streak, but the software company’s billionaire owner said he isn’t too concerned.
“Financially we’re in good shape," Jim Goodnight said. “We’re not going to have any furloughs or layoffs in response to the pandemic. We may not make any money this year, but we made plenty in the past to get us by."
SAS’s growth into one of the world’s largest software firms underscores this stance. The closely held company had revenue of $3.3 billion in 2018, thanks to analytic platforms that are used by more than 83,000 businesses, governments and universities. Some are being hit especially hard by the pandemic.
“We have a lot of customers in the hospitality business: hotels, airlines, cruise ships," Goodnight said. “A lot of them are hurting big time. I mean, when are you going to feel comfortable getting on a crowded airplane again?"
The upheaval has prompted some to defer payments, and Goodnight expects the worst is yet to come. “Some of them will drop our software altogether," he said. “You don’t need revenue management if you don’t have any revenue."
But he said it’s largely business as usual at the company he co-founded while a statistics professor at North Carolina State University. Goodnight, 77, who still owns two-thirds of the firm, has a net worth of about $12 billion, according to the Bloomberg Billionaires .
The remainder of SAS -- it originally stood for statistical analysis software when the company was founded -- is held by co-founder John Sall.
“We are completely debt-free, so that puts us in a much better position to take a hit this year," Goodnight said. “This model has served very well for SAS, and is why we can weather this storm better than some other companies."
While large tech companies like SAS have been relatively well-positioned to withstand such a crisis, other industries and businesses are in worse shape. More than 30 million people have filed unemployment claims in the U.S. over the past few weeks.
“This would be a terrible time to lay people off," Goodnight said. “It would just be horrible because you can’t go find another job."
SAS, which has invested heavily in artificial intelligence in recent years, is well positioned to prosper despite the pandemic, according to Ritu Jyoti, global AI research lead at International Data Corp.
“Companies focused on AI and analytics should be able to thrive," she said. “SAS is at the intersection of those solutions."
Even as some work dries up, other areas are expanding. With purchasing patterns upended, there has been an uptick in demand for forecasting as companies scramble to adjust models to help them plan how much to manufacture. Fraud detection -- including for unemployment claims -- is expected to be another growth area, Goodnight said.
SAS -- pronounced “SASS" -- is also supporting responses to Covid-19. It’s creating dashboards for U.S states to help them track the outbreak and developing models to assist officials in Italy, Germany, Bulgaria, Canada, Spain and Sweden in allocating government and health-care resources. Hospitals are using the company’s software to forecast the need for intensive care beds, ventilators and personal protective equipment.
Most of SAS’s more than 13,000 employees have shifted to remote work. That includes about 5,500 staff at its Cary, North Carolina, headquarters, who won’t return until June at the earliest. Even company perks like on-site day care and a campus fitness center have made the transition, with virtual lessons and online workouts being offered.
Goodnight, who still goes into the office, notes the lockdown has other advantages.
“There’s nobody around to want to have meetings all the time," he said. “To some extent it’s more productive. You have more time to actually do the things you want to work on."
Still, his team is already discussing various ways to reopen once the lockdown lifts, including the staggered return of employees. As the co-owner of Prestonwood Country Club, which has three golf courses, he’s also waiting to see whether a PGA Tour event scheduled for early October will go ahead. He said the club may host the event without spectators.
Some changes imposed as a result of coronavirus are likely to endure at SAS, he said.
The Centers for Disease Control and Prevention “doesn’t have the rules in place to tell you how to start your business back up," he said. “The heart of the decision is how do we convince everybody they should come back to work. A lot of them are saying, ‘Hey, this is working well not coming to work. Can I stay home from now on?’"
Still, he’s looking forward to a return to relatively normal working practices.
“The routine of coming into the office and talking to each other in the hallway or standing outside somebody’s office having a chat over an issue are the kind of things that are hard to replace," he said. “The other issue from working from home is you go a little stir-crazy."
This story has been published from a wire agency feed without modifications to the text.
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