SAS Institute Shakes Up BI Space With Reseller Effort

After decades of spurning the channel in favor of direct sales, SAS Institute is launching its first reseller program, giving participants access to parts of a product line regarded as a gold standard in the analytics market.

Granted, SAS is wading into a crowded channel. Its business intelligence (BI) rivals, including Business Objects, Cognos and Hyperion Solutions, boast longstanding VAR alliances. But SAS has its brand name to trade on.

It also is bringing a trump card to the table: It is offering its partners margins not only on initial product license sales but also on the recurring revenue stream it derives from annual maintenance renewals. If partners meet criteria such as certification and customer-satisfaction goals, they will receive 25 percent of the renewal fee each year on deals they landed, SAS executives said.

They believe that carrot is essential to building a channel program that works within SAS's historical sales model.

"The only way we've been able to see year-over-year revenue growth even in tough years like 2001 is that renewal base. We had to come up with a model that wouldn't cannibalize that existing annuity," said Jim Davis, SAS's chief marketing officer. "This way, the reseller is incented to maintain the relationship instead of doing a dump-and-run on the first-year fee."

Claraview COO Eric Driscoll said he would love to see more vendors follow SAS's lead on renewal fees. Claraview, a Reston, Va.-based consultancy, resells SAS along with products from Business Objects, Cognos and MicroStrategy—none of which give partners a cut of the maintenance revenue stream, partners said.

"If I'm given a chance to pick up an account where SAS will pay me renewals vs. rainmaking new projects, I might take the SAS sale," Driscoll said. Two dozen resellers have already signed on with SAS since the program's April launch, at a quicker pace than anticipated, SAS executives said.

Express Analytics CEO Hemant Warudkar said his company, an Irvine, Calif., VAR specializing in BI, previously tried in vain to strike up a partnership with SAS. He was delighted when the software vendor got in touch to pitch its new channel program.

"We said, 'We've been waiting years for you to do something!' " Warudkar said. "We want to distinguish ourselves with high-end analytics, and SAS is at the top."

SAS, based in Cary, N.C., is privately held, but it reported $1.7 billion in revenue last year. All of SAS's sales to date have been direct, but the company would like to drive at least 15 percent of its revenue through the channel by 2008, Davis said. That effort is backed strongly by company founder and CEO Jim Goodnight, who was involved in the planning, he said.

Next month, SAS will hold its first reseller summit, chaired by new hire Miles Mahoney, SAS's general manager of strategic alliances and channels. Prior to joining SAS, Mahoney developed channel programs at Borland Software and Crystal Decisions (now part of Business Objects).