SAS Institute could possibly have its sights established on Microsoft.
Just a day immediately after acquisition talks between SAS and Broadcom had been built general public, TechTarget confirmed that people negotiations have finished with out the businesses achieving an arrangement for Broadcom to purchase SAS.
In its place, SAS, a longtime impartial analytics seller, is hoping tech giant Microsoft results in being its parent enterprise, according to R “Ray” Wang, founder, chairman and principal analyst at Constellation Analysis.
“They are hoping to get Microsoft to be section of the deal and bid,” he explained.
The Wall Street Journal initial documented on July twelve that SAS and Broadcom had been speaking about an acquisition that would benefit SAS at $fifteen billion to $twenty billion, and then documented on July 13 that people talks experienced broken down.
Experienced the deal gone by means of, at $fifteen billion it would have approached the sizing of Salesforce’s $fifteen.7 billion acquisition of Tableau in 2019, and at $twenty billion would have considerably exceeded it and been the greatest analytics sector acquisition at any time.
Those talks with Broadcom, on the other hand, had been possible a ploy to let Microsoft know that SAS is wanting for a buyer, according to Wang.
“The deal was leaked to see if Microsoft would consider the bait,” he explained.
While Wang explained SAS is hoping Microsoft emerges as a buyer, SAS co-founder and CEO James Goodnight — broadly regarded as Dr. Goodnight due to the fact of his PhD in stats from North Carolina State University — advised workforce on July 13 that the enterprise is not for sale, according to SAS spokesperson Shannon Heath.
“I can affirm that Dr. Goodnight sent a message to all workforce which explained, ‘We are not up for sale,’ ” she explained.
Pertaining to Wang’s statement that SAS is hoping to get acquired by Microsoft, Heath included that SAS experienced no remark.
“With regard to the additional inquiry about Microsoft, SAS does not remark on rumors or speculation,” she explained.
Microsoft did not immediately answer to a request for remark.
A fantastic romance
SAS, launched in 1976 when it was section of North Carolina State, is primarily based in Cary, N.C., has a deep existing romance with Microsoft.
In June 2020, SAS and Microsoft unveiled a partnership arrangement underneath which Microsoft grew to become the most popular cloud company for SAS’ analytics products and solutions, which include SAS 9.4 for on-premises users and Viya 4 for its cloud prospects. In addition, SAS’ analytics tools had been migrated onto Microsoft Azure, the tech giant’s cloud computing platform, and SAS and Microsoft designed a joint go-to-market place method.
Even with the partnership arrangement, on the other hand, SAS remained cloud agnostic and in May 2021 included native assistance for both equally AWS and Google Cloud System.
Presented the close romance between SAS and Microsoft, which features important customer overlap, there would be positives to a potential deal between the two, according to Boris Evelson, principal analyst at Forrester Analysis.
But due to the fact the Microsoft and SAS have equivalent technological choices, there would be negatives as effectively, he included.
“Ever considering the fact that I have been doing the job intently with SAS, heading back to 2000-2001, they have normally experienced suitors,” Evelson explained. “SAS is a prime, effectively-regarded world-wide manufacturer, and has liked practically uninterrupted profitability for many many years. Every single big computer software enterprise would gain from proudly owning SAS.”
Potential positive aspects of a deal between SAS and Microsoft are assorted, he explained. They include the vendors’ presently sturdy doing the job romance, the attractiveness of Azure with SAS prospects, and potential synergies between Microsoft’s Electrical power Apps and Electrical power Automate — tools that enable business users to develop purposes with out an skills in coding and details science — and SAS’ analytics capabilities.
In the meantime, beyond important technological overlap, a potential draw back could be Microsoft’s acquisition pattern of using businesses off the market place and either integrating them into existing Microsoft products and solutions or reintroducing them as a new Microsoft solution.
“That technique will clearly not do the job with this sort of a behemoth as SAS,” Evelson explained. “This indicates Microsoft will most possible depart SAS working as an impartial business device for at least a handful of several years, and in excess of time will rationalize the portfolio, embed some products and solutions in Microsoft’s stack and retire some.”
Wang equally pointed out that the existing partnership between SAS and Microsoft is important, but included that the high-quality of that the partnership could enable the businesses to triumph over potential hurdles.
“SAS has been making deep relationships with Microsoft, from Azure to analytics to compute,” he explained. “There would seem to be a incredibly peaceful and successful romance.”
Kjell Carlsson, principal analyst at Forrester, in the meantime, explained it tends to make perception for SAS to look for a buyer, but that Microsoft could possibly not be the a person that truly winds up producing the obtain.
An acquisition would enable Goodnight, who is seventy eight several years old, to retire. Oliver Schabenberger, who spent 19 several years at SAS and served as both equally chief working officer and chief know-how officer, experienced been viewed as a possible successor but remaining to develop into chief innovation officer at SingleStore in early 2021.
“To state the evident, SAS has a management succession issue,” Carlsson explained. “Now that Oliver has remaining, I feel anyone is scratching their head as to who that successor could be. Other businesses have turned to marketing the business in equivalent condition.”
He pointed out, as an case in point, EMC marketing alone to Dell.
The principal difficulty, on the other hand, is what Microsoft could possibly get out of obtaining SAS, he explained.
SAS would deliver capabilities that target details researchers — a persona Microsoft has not historically targeted — but a seller that specializes in augmented intelligence and equipment mastering could possibly make a better in shape for Microsoft, according to Carlsson.
“SAS is, earlier mentioned all else, a details scientist-oriented enterprise,” he explained. “You could make the case that Microsoft would gain from filling this gap, but in apply Microsoft [could possibly] struggle to effectively leverage a potential SAS acquisition as opposed to other gamers in the ML/AI platform … who they could purchase much more cheaply.”
An acquisition craze
Should SAS get acquired by Microsoft, Broadcom, or anyone else, it would stand for the continuation of consolidation among the analytics suppliers.
In April 2020, Logi Analytics was acquired by ERP seller InsightSoftware, and in Oct 2020, IBI — previously Information and facts Builders — was acquired by Tibco Application. In 2019, just 4 days prior to Salesforce acquired on June ten, 2019, Google ordered Looker for $2.six billion.
In addition, there have been a collection of smaller bargains with analytics suppliers obtaining AI and ML suppliers to add people capabilities to their analytics tools. ThoughtSpot, for case in point, has presently built two acquisitions in 2021, and Qlik acquired Blendr.io on the exact same day Tibco acquired IBI in 2020.