With JG's 81st approaching next month, anyone care to speculate on SAS' current succession plan?
One would think they’d look for a dynamic cloud leader on the outside, but I bet they promote from within. The question is, who is the most likely suitor these days…JU, GD, BH, others?
We need a new thread to gin up more discussion on this.
They're going to give it to a random disgruntled SAS-basher from The Layoff with a randomly generated string of characters for a name
But only one of the true 'hardcore' get a ticket in the lottery.....
Bookies currently favor the 'the cavalry is not coming' guy down below.
"And SAS would not like to sell to a company that would lay off many of their loyal employees"
I think SAS will sell to anyone that is willing to pay for their asking price in cash. As long as the price is right to SAS (JG), SAS will sell. SAS has no problems laying off its own loyal employees so I don't think SAS care if the buyer lays off after the SAS is sold off.
“Pure speculation of course.”
Isn’t that what this site is for? :-)
“Any serious buyer is looking at revenues/employees...”
Yes, and they count actual employees, not contractors and partners.
As best I can tell, actual employee headcount reached above 14,000, then dropped to around 12,000 — about a 15% reduction. Not coincidentally, over the same timespan, revenues saw about a 15% reduction.
Broadcom’s business model for software acquisitions is to cut the fat, then squeeze the juice out of a declining revenue stream. They inherited this model when they acquired Computer Associates.
So they would not be deterred by a poor revenue / employee metric. They would simply say, this is a metric we can improve.
But for a company with a low revenue / employee metric, Broadcom would not pay a high price. And SAS would not like to sell to a company that would lay off many of their loyal employees. On one of these issues or both, that deal evaporated.
"That 17k figure is misleading. That includes thousands of subcontractors and partners globally that are not actually paid employees."
Splitting hairs unnecessarily. Yes, you are correct that a rev/emp calculation only includes full time employees.
Any serious buyer is looking at rev/emp as a preliminary metric. Rev/emp should be labeled more honestly as "GROSS revenue/employee". Once expenses are factored and the metric becomes distilled to NET revenue per employee, then the deal either proceeds or evaporates. The deal with Broadcom evaporated. We know that for sure. What we do not know is which party said "no deal".
The ad naseum layoffs could be indicative that "the juice is not yet worth the squeeze". Pure speculation of course.
That 17k figure is misleading. That includes thousands of subcontractors and partners globally that are not actually paid employees.
$3 B / 17,389 = $172,522.85 SAS Revenue per employee.
The SAS org chart says there are 17389 people reporting to JG. This includes subsidiaries like JMP and Ideas.
Does SAS have 12,000 employees currently or is that figure less than 10,000 now with all the layoff thus far?
Assuming ZoomInfo’s figures are accurate, they show $100M / 400 = ~$250K revenue per employee. That’s consistent with SAS as a whole: $3B / 12,000 = ~$250K revenue per employee.
Yes, that’s on the low end for the software business. Statista shows $900K for Microsoft, $600K for Adobe, and $300K for SAP and Oracle:
https://www.statista.com/statistics/1136099/revenue-per-employee-software-companies/
JS is also a founder of SAS going back to the early 1970s and has held somewhere between 25% and 33.33% ownership of SAS proper since ~1979 when the other original founders Barr and Helwig sold out to JG and JS.
This certainly helps explain his wealth.
I have no idea on JMP revenue figures, but in my past experience Zoominfo is not very accurate in terms of revenue numbers for private companies. It’s used internally at SAS and I have seen large differences between a customers actual revenue and what Zoominfo’s model produces.
https://www.zoominfo.com/c/jmp-nordics/20775103
"generates less than $100 million of gross revenue"
Can you give the source for that figure please?
"JMP is over 500 employees now."
And generates less than $100million of gross revenue. Easy math says over half of that revenue is needed to cover just the salaries for those 500. JMP revenue per employee is on the very low end for a software business.
When the cost to support JMP is factored in, it is hard to imagine JMP turns a profit . Swanky conferences, grounds upkeep and building maintenance plus utilities, security, legal, HR, pubs, tech support, HCC, RFC, cafe, and the JMP support list goes on and on. Sounds parasitic eh?
How does one become a billionaire on a product that has never generated more the $100million in the best of years?
JMP is over 500 employees now.
"JMP needs SAS way more than SAS needs JMP".
Indeed. JMP revenue is only 3 percent of the total revenue for SAS. In that vein, who needs whom becomes apparent.
“Growing headcount for JMP is likely more related to it being a cofounder's baby.”
It was long my impression that JG permitting JS to do as he liked with JMP was the flip side of JS not interfering with JG doing as he liked with SAS. Detente, if you will.
according to website, JMP has "There are more than 400 of us."
What is the headcount for JMP?
"For many years, JMP staff has steadily increased. That would not be allowed unless JMP were profitable."
Growing headcount for JMP is likely more related to it being a cofounder's baby.
Growing headcount at SAS is not necessarily indicative of profitablilty. For example: 8 years of growing headcount on Viya and its total lack of profit.
JMP does not need SAS. For many years, JMP staff has steadily increased. That would not be allowed unless JMP were profitable.
For SAS, JMP is like Risk and Fraud: profitable parts of the company that are attractive to potential buyers.
SAS could spin JMP off, if that’s the most profitable course of action. But it’s also attractive to give a buyer that option. For many years, JMP sales have grown every year, so it could make a good IPO on its own.
JS loves leading JMP R&D. So if a buyer creates a situation where he can continue that, he will. If he doesn’t like his situation, he can walk away.
"JS has only ever had around 30% of the company. I'm still assuming that either he sells his stake, or JMP finally gets spun off (like they promised 2 years ago). "
JMP should have been spun off long ago because the reality is that is has little or nothing to do with SAS. JMP needs SAS way more than SAS needs JMP. Spinning off JMP gives JS the best avenue for allowing JS to have influence on JMP's future. A SAS buyer will unload JMP in a New York minute and JS will be left with little more than just money and memories. If that is what JS wants, then his seemingly current plan of riding it out makes sense.
I'd be happy to learn, but can't find any such announcement in public sources. Was that an internal announcement?
If so, did SAS give a reason? I can understand selling 100%, or putting 100% in a trust. But I don't see why, after all these years, they would decide to sell only a small portion.
"I’ve not heard SAS say that’s the plan — at least not in the last 20 years. "
Go to the announcement updates they made late last year, around this time. They changed the scope of the IPO to be a "portion" of the company.
"What about JS's stake in all of these scenarios?"
JS has only ever had around 30% of the company. I'm still assuming that either he sells his stake, or JMP finally gets spun off (like they promised 2 years ago). Either way, it would take a significant ownership structure change to give him enough power to influence things.
What about JS's stake in all of these scenarios?
“They are only planning to IPO a portion of the company's estimated value anyway.”
I’ve not heard SAS say that’s the plan — at least not in the last 20 years. In 1999, they did plan to IPO only a small portion. But many things were different then.
I'm sure they will only go so far as to fill out the C-suite with a COO. The stuffed shirt can just do whatever JG tells them until he dies. Then the COO will be a servant to whatever plan JG has in place after his death.
They are only planning to IPO a portion of the company's estimated value anyway. So, whether IPO ever happens or not, I expect JG's family/trust will retain the controlling ownership of the company once he passes (and have voting majority on the board). I supposed they would likely sell most of that off to Broadcom, private equity, etc. unless the trust has limitations preventing that. Probably more money into the trust than just the trickle of profits from the business each year.
Who is getting SAS books ready for a sale or IPO?
If the "who" are internal folks, time is of the essence for them. Meaning the longer they foot drag, the longer their position at SAS remains intact. JG is okay with their lack of expediency, otherwise their movement would not be sluggish.
I don't see a sale happening until after JG passes. SAS is his life and his ship. He will be at the helm hanging onto the wheel when he draws his last breath. Once gone, progress will hasten noticeable. The succession plan is and has been all along to let his heirs decide the future of SAS. Merely my two cents worth based on alot of experience with control oriented folk who put all their eggs into one basket.
Many people agree with you.
I cannot believe that the Majority Owner suddenly decided -- after 50 years! -- that he would like to report to a Board of Directors. And SAS has no debt; it clearly does not need an IPO to generate money. Finally, a software company can't be divided, so it would be poor estate planning to leave it to one's heirs.
For these reasons, I believe the figure is not 51% but 100%; and afterwards, Broadcom or some similar company will buy SAS.
I'm not sure of all the SEC rules and principles associated with this, but it is quite likely JG will maintain controlling interest by owning at least 51% of SAS' stock. If he's not willing to sell his shares then how, can anyone purchase SAS on the open market once they IPO?
After an IPO, anyone can buy SAS on the open market.
So the successor will be Hock Tan or someone like him.
No one. The ship will go down with the captain when the time comes.
Hopefully it won't be anytime soon since I love SAS.
I would guess GD based on his current duties, but really only one guy knows.
Exec team collab - like in the early aughts when the 4 (or was it 5?) R&D division heads shared head of R&D.
Probably Jay Upchurch if anyone. But there's no real frontrunner. Anyone who ever was has left.