IW500: Q&A With SAS Institute CEO Jim GoodnightIW500: Q&A With SAS Institute CEO Jim Goodnight

We caught up with SAS Institute CEO Jim Goodnight, moments before his appearance on a panel at the information 500 Conference Monday, to get his thoughts on cloud computing, software industry consolidation, and one of his favorite topics, technology and education.

information: Will SAS Institute become more involved in the software-as-a-service trend?

Jim Goodnight: We offer quite a few software-as-a-service apps. The largest is Ideas, which is a hospitality app. It's a hotel revenue management system that helps hotels optimize revenue by suggesting what room rates should be on a specific day. That's a company we bought over a year ago. Another very popular thing has been our SAS-on-demand for academics. That allows university students and professors to access SAS and use it remotely from their PCs and their browsers. We're running it for five or six hundred universities; it helps teach undergrad statistical analysis. We also launched our campaign management solution earlier this year as an on-demand software service.

information: What about cloud computing as an alternative for some of your bigger customers, such as banks?

Goodnight: We have a number of banks and insurance companies that want to make sure data is in-house and secure in their own facilities. That mentality is going to be there for a long time, and probably should be. I think cloud computing is nice for CPU-intensive jobs, but if large amounts of IO is required [it's not ideal]. I'm not sure you want corporate assets or corporate data all over the cloud. Banking and healthcare are very sensitive about this for legal reasons.

information: You're very involved in education and computer literacy. As a country, are we making progress in that area?

Goodnight: I think we're still far behind. We have to get our students more interested in STEM [science/technology/engineering/mathematical] skills. We've got to get them interested at earlier grades. We have to be really stressing the important of algebra in middle school. Everything comes right back down to teaching kids good, solid basics of algebra.

We could use technology to get kids interested in algebra. In North Carolina, we're working with 21 high schoolsto provide laptops on a one-to-one basis with kids. Kids today are digital. They've got an iPod in one hand and a cell phone in the other. Let's take advantage of that. But schools are still teaching the same way, with blackboards and teachers. We need to modernize our schools and get technology involved. [Using an online curriculum], the teacher becomes more of a mentor than a teacher walking around trying to help everyone.

information: We're seeing even more consolidation in the business-intelligence software industry, with IBM in final preparations to acquire SPSS. What impact is that having in the BI industry?

Goodnight: It all depends on whether IBM will try to integrate SPSS or keep them separate. Sometimes with these acquisitions, we start seeing people come to us with their resumes because they want to get out. We've gotten several resumes from Business Objects from people who say the culture has been destroyed by Germans coming in and telling them what to do. And Cognos, we don't see them in [competitive deals] that much anymore.

information: Are companies using predictive analytics to weather the recession

Goodnight: It's been more about optimization versus predictive analytics. We are seeing a much larger interest in using marketing automation and campaign management to select which customers to market to. We're also seeing a lot of telcos concerned about customer churn -- where they're losing customers they could've kept if they'd known they were going to leave. [Our software] helps them look at things such as billing and usage; late payments can be a sign of a customer preparing to leave. In manufacturing, they're using supply parts optimization where parts dealers are able to forecast inventory and reduce stock over time.

Some of our biggest warranty analysis customers are the big auto companies. That takes a look at getting very early forecast of part failures, so you can correct the problem on the assembly line before you send out defective parts.

See full coverage of the information 500 here.

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