Changing AI market impacts SAS strategy and channel

SAS has reacted to the huge changes in the market around artificial intelligence, by rethinking how they approach the market, and how they sell into it.

Pat Finerty, Vice President, Alliances & Channels Canada and Latin America at SAS

The rise in the focus on Artificial Intelligence, analytics and Big Data has impacted all aspects of IT that touch upon those spaces, as new players enter the market right and left, and new applications of the technology seem to appear by the week. For the pioneers in the space like SAS that have a large market presence, that poses challenges that extend beyond the constant need to produce ever more innovative iterations of their technology portfolio. SAS has changed the basic way in which they both address the market and sell into it as a result.

“The biggest change in how we approach the market comes from the shift from where we were once one of a few focused players in analytics and AI to now being one of many,” said Steve Holder, National Strategy Executive, Analytics and AI, SAS Canada. “That has led to our shift to being more of a platform company which is open, which was not the case before. We want to be a unifying force in the business, to enable a lot of different groups. We have been developing an outside developer community by giving free software to academia, so where developers graduate, they know who we are.  We have multiple different partnership angles, including partnering with SIs to help enable customers on our technology. Another issue is how do we get our tech in the hands of technologists at other organizations, We are very open to everybody using our stuff.”

SAS’s move to SAS Viya in 2016 was a key part of this trajectory. SAS Viya is an open software platform that runs in the cloud, natively uses open source languages, and is designed to leverage the cloud to make analytics much more broadly used than it had been before.

“We made a decision a few years ago with SAS Viya to change the way we make and deploy our technology,” Holder added. “The issue was how to refactor our technology to address the needs of enterprise, while also addressing other use cases, to enable new outcomes. We are looking to enable people beyond programmers, as well as to enable programmers to consume SAS in a more mobile way. We aren’t looking to become a mobile company, but will open up ways that you can do that.”

The market has also changed fundamentally in terms of who is using SAS’s software.

“AI used to be the realm in a few people in an organization with those people involved being more focused on descriptive analytics,” Holder indicated. “People are now more comfortable with the math behind the systems, so organizations are moving beyond the simple reports of the path.”

The ‘democratization of data’ where Line of Business users want more access to analytics has also been a factor.

“This has always been more of a cultural problem in the past than a technology problem,” Holder said. “We’ve always felt we should get more data in the hands of the consumer, and have always been a big advocate of this. However, with many organizations, there have been governance issues, or where data is deemed a corporate asset, where this has been resisted.”

The core industries where SAS plays has not changed dramatically, although they have picked up their pace in the midmarket, and expanded their channel to help them do so.

“Our priority industry verticals are financial services, government, and then telco and retail, although we are in most sectors in the enterprise,” said Pat Finerty, Vice President, Alliances & Channels Canada and Latin America at SAS.

The midmarket has become an increasingly important target, however.

“I think SAS’s biggest growth potential is in medium-sized enterprise, which in Canada is $500 million to $2 billion in revenue,” Finerty indicated. “We even have channel partners in the S space of SMB, but it’s in the clinical research space, with small but extremely sophisticated research organizations. The needs of the midmarket are very similar to the enterprise.”

The channel is the primary vehicle to that market.

“Our market share in the midmarket is one-tenth the size of our share in the enterprise space,” Finerty said. “We never had the opportunities there without the channel. We didn’t have the infrastructure. We didn’t have the intimate relationships, or the right services propositions. We made a big commitment to the channel three years ago. That was a strategic decision. We staffed up internally and recruited partners. In the last 18 months we began the process of scaling the channel up, and did the strategy and staffing work. Now we are doing increased amounts of partner enablement, and doing more scaling up.”

Those channel relationships are multi-faceted and complex.

“The SAS channel as a reality on the ground is happening all over the world,” Finerty noted. “It includes groups like managed analytics service providers, where we deploy a strategy much like ‘Intel Inside’ to combine our capabilities with others’ managed services to a wide variety of clients. For example, working with Deloitte Canada, they combine us, a third party and their own software on a cloud-based platform that they built, powered by our analytics platform. We have many such relationships worldwide, with SIs, data providers and software vendors as well.  SciSports is a Dutch organization that takes our real time analytics and does detailed analytics around soccer players in motion, to improve the changes of recruiting the best players that fit specific profiles.”

The amount of business done through partners is still small compared to the direct, but it is growing, and is especially high in Canada

“We have lofty goals,” Finerty said. “The plan is to deliver 5 to 10 per cent of new business through the channel at this stage. In Canada, the channel now provides north of 20 per cent of new business, and we have seen a 50 per cent year over year increase in the growth rate through the channel. We are twice as far ahead as where I thought we would be.”

Finerty said that in Canada, they are benefiting on the channel side from the explosion of AI talent.

“We have these resellers,  NoviPro, in Quebec,” he stated. “They hired three grad students and they are taking us into spaces in the manufacturing sector where we have played, but we didn’t expect it would be such a big part of our channel play. They combine SAS with open source, deploying the models and combining the strengths of open source with the solidity of our platform.”

In Canada, the channel is a mixed model between the large SIs and geographically-specific regional channels.

“In other markets, we have done one or the other, but not both as we do here,” Finerty said.

Their model is also different in the different regions of Canada.

“Our operating method is unique in Toronto, western Canada, Quebec, the federal government and the Maritimes,” he noted. “We sell to the same industries in those places, but they are in different world in terms of how their businesses operate, and our channel reflects that.”