Thread regarding SAS Institute layoffs

"The senior management team appears largely aligned around maintaining the status quo... There seems to be little willingness to communicate candidly with JG about the realities in the marketplace."

If I were directly reporting to JG, I would not spend much time telling him what he already knows.

To build anything, you need enough ego to believe you can build it.

But if you can actually build it, that’s not arrogance; it’s ability.

SAS promoted many who believed they could build, but were not able.

@12x Arrogance and ego built virtually every major tech company…

"Arrogance and ego put the company where it is today"

And arrogance and ego built Viya. The most expensive SAS creation that is a flop. Which explains why SAS is what it is today. Dying. Sad.

We likely don't know if the revenue is $3B, but even the top line is more complicated than a nominal, reported number. Many comments mentioned inflation. There is also the long term decline of the dollar. International revenue converted to dollars may appear to be higher when "translated" even if there is no real increase (and may have been a decrease with currency exchange making the nominal top line appear flat). You will not be willing to pay the same price for the lemonade stand if its annual revenue is the same, but profit has fallen from $100 to $10. Sure the lemonade stand can lay off its employee (younger sibling, probably), but it cannot go on cutting costs forever (yes, yes, it will keep the art dept of course.).

@11q You might have meant to type “omniscient,” which is also correct.

Arrogance and ego put the company where it is today, not Viya.

No mortal is omnipotent.

The context was:

"Obviously, the company is worth a great deal of money, but that is not really in question...

The more relevant question is what the company is worth today compared to what it was worth five or seven years ago..."

@10z Nothing was taken out of context.

If you can’t agree that the following statement is true without clarification then my point stands.

“ With roughly $3 billion in revenue, SAS remains a valuable software company with significant assets, a strong customer base, and meaningful recurring revenue streams.”

@10q

it looks like you took the quote out of context and ignored the previous commenter's questions. valuations in investing are not based on a static snapshot but future expectations. static snapshot is therefore not the core point. future is always the core point. price is a multiple of earnings because as an investor you are paying for future, not current, earnings. if someone has a lemonade stand making $100 profit per year, and you will pay $1000, it's because you expect it to continue making those profits or grow them (so you get your $1000 back, plus a return). if you think the profits are reducing (which if revenue is flat, would happen unless costs get cut, due to inflation), you may want to pay less. if you think the profits are growing, you may be willing to pay more. the "expectation of growth" is the core point of all those comments and lamentations. the "current status" is not at all the core point. the current status may be fine for very rich current owners. but for those hoping to avoid layoffs or do better than that, future plans and expectations and growth are more important. this is the crux.

@10p That was well said and something that I “Company Man #3” very much agree with.

“ Obviously, the company is worth a great deal of money, but that is not really in question. With roughly $3 billion in revenue, SAS remains a valuable software company with significant assets, a strong customer base, and meaningful recurring revenue streams.”

That statement is the core point and one that many on here don’t seem to understand. Look at their comments and they make that clear.

@ye

"But you would love to own a company that is in that exact same place SAS is today."

Obviously, the company is worth a great deal of money, but that is not really in question. With roughly $3 billion in revenue, SAS remains a valuable software company with significant assets, a strong customer base, and meaningful recurring revenue streams.

The more relevant question is what the company is worth today compared to what it was worth five or seven years ago. Have we taken the right steps to sustain and grow that value? Do we have the right management team in place? And are we seeking the guidance we should be from experienced leaders in the broader business community who could help position the company far better than it is today?

As a privately held company, these decisions ultimately rest with our CEO. For the good of the company and its employees, I hope he seeks additional guidance and perspective as he shapes the company’s plans for the future.

@ye Yes. But if I owned it, I would sell it.

@yd But you would love to own a company that is in that exact same place SAS is today.

"If I were JG, having just wasted $xB on Viya, I would be very much disinclined to fund another such large effort."

Viya is the $xB mistake that put SAS where is is today.

@w6 meanwhile I continue to monitor all the quarterly reports for companies I invest in.

If some new President were named from outside SAS, what leadership guidance could they offer? They could say, well clearly this Viya thing is not working, so we need to rework it or build something else. But either effort would require significant funding.

If I were JG, having just wasted $xB on Viya, I would be very much disinclined to fund another such large effort.

In theory, a sale or IPO could lead to more funding, under some new owner. But any new owner is more likely to be a company like Broadcom, or private equity, with a business model of milking declining software revenue streams until they die.

Nothing is impossible. But competing in this market requires funding, and I don't see a source.

@vw

I'm certainly not an M&A expert but from my perspective it seems unlikely that the company would pursue an IPO or a sale under our current CEO’s leadership. Public statements have indicated a valuation in the range of $18–20B (based loosely on valuations of other analytics and BI companies during IPOs or acquisitions).

With that said, considering the significant decline in our valuation since the time of the Broadcom offer several years ago, it raises questions on what our strategy for selling the company would be at this point. Obviously, our CEO does not 'need' the money from a sale of the company and therefore one possible scenario could involve restructuring the business and eventually separating or selling parts of the company after the current CEO steps down and transitions ownership to his heirs. It will be very interesting to watch SAS over the next few years. I really would love to see a President named from outside of SAS that could come in and offer real leadership guidance for the company.

"doing what looks good every three months"

In case you didn't know, this administration has changed the rules to eliminate quarterly reporting. It's de-regulation like this which is ushering in the golden age.

@vw Most public companies certainly.

But private companies are different and have the luxury of doing what they want versus doing what looks good every three months. Whether that be IPO prep, Doing things slowly, sticking with a path regardless of short term, etc

@sn We agree that, given recent results, changes would be made, at most companies.

But maybe changes are not made, at companies being sold. Maybe, in that position, the only changes you make are cost-cutting, improving your numbers to attract a buyer.

But Daddy, I earned it!

@n7

I don’t think I made my point clear. It’s not whether we are a growth company, leading edge or a stable company to work for ….. my point was strictly about the management team we have in place and the impact they have on our company year over year over year. It’s sad to watch. And to me, insane that there are not changes being made based on our results year in and year out.

It is what it is.

If you want SAS to be a growth company, it is not.

If you want SAS to be leading-edge, it is not.

If you want SAS to be stable employment, it's not that either -- although it was for many years.

This is a company in the process of being sold. Clearly, management is in no hurry to sell it. But that is the endgame.

If the axe did not yet fall on you, you are lucky. Use your time wisely.

It looks like SAS has no plan except to sell or IPO, but is in no hurry to do either.

I bet Big Jim loves all the sh-t on this forum. The Televangelist, too!

Agreed. You don't need a competitive strategy, if your strategy is to sell the company.

Those are the actions of a company preparing to sell honestly. In my opinion, that's their best outcome. It would be a massive undertaking to make the company competitive with the newer players at this point.

Speak to the guy candidly? C’mon, now! When did that ever work?

This is a job, not a religion or some great calling. Go on, take the money and run.

Don't know why you're being downvoted. This is the obvious truth.

My guess is the big guy just has more important things going on.

Cheap seats