James Goodnight, SAS Institute

“In the early days we didn&'t have operating systems. You punched a button and put a card in location zero and then executed the instructions that were held there. Things have been sort of downhill ever since,” he quipped during his recent induction into the CRN Industry Hall of Fame to the roaring approval of the audience of solution providers.

Goodnight, now 62, has done pretty well for himself—and his company—since then. The SAS Institute, which he co-founded, has become a multibillion-dollar software powerhouse, the advent of operating systems notwithstanding. It is regularly billed as the world&'s largest privately owned software company and is perennially on “best places to work in America” lists published yearly.

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Indeed, employees who write, support and maintain SAS&' bread-and-butter statistical analysis and business intelligence tools get loads of perks at the near-legendary Cary, N.C., campus. There&'s on-site health care and day care, even laundry service and car-detailing. They can munch on the famous free M&Ms and for those who overindulge in same, there&'s a health club in which to work them off. In return, SAS workers have been very loyal: The company boasts an employee turnover rate of less than 4 percent a year, a rate it maintained throughout the notorious dot-com boom-and-bust that decimated tech startups and public companies alike. SAS claims to have been layoff-free since its founding in 1976. It had seven employees the following year and currently boasts 9,804 employees, some 4,304 of whom work in the Cary headquarters. Other numbers that provide perspective on Goodnight&'s impact on the industry: SAS logged $1.53 billion in revenue for 2004, up from $1.34 billion the previous year. It invests more than a quarter of that amount, 26 percent of its revenue, in R&D.

“The on-site health care, the Frisbee and soccer games at lunch, it&'s all built into their culture, and that culture extends to their partner channel,” says Bill Donovan, president and CEO of Intellicisions, a Cary-based SAS partner.

Barrett Joyner, a 16-year SAS veteran who left to do his own thing, “loved SAS and still does.” In fact, his wife still works there. So why leave? In the immortal words of Steve Martin, Joyner says: “I wanted to get small.” (Barrett is now senior vice president of Mi-Co, a mobile data-capture software company just down the road from SAS in Research Triangle Park, N.C.)

Joyner credits Goodnight with creating an atmosphere that is conducive to fostering hard work, creativity and overall goodwill among the SAS workforce.

“The company always tries to structure itself in a way that gets rid of hassles that make you unproductive. When our children were in day care, if one was sick, it took 10 minutes out of your day,” he notes. The alternative, as most employers know from hard experience, would be much more lost time associated with staying at home.

Others point to SAS&' willingness, even eagerness, decades ago to hire smart women on “the mommy track” who viewed the company&'s forward-looking day care policy as a godsend.

At 6 feet, 5 inches tall, Goodnight is often described as lanky and laconic. But he clearly remains jazzed about technology and his life&'s work. Speaking at the CRN Industry Hall of Fame ceremony in Santa Clara, Calif., last month he said: “It&'s great to get an award for work you&'ve enjoyed with a passion and done all your life.”

Remarkably, he has kept at programming long after most in his shoes have stopped. “Jim maintained parts of the SAS code base for a good long while,” Joyner remembers. “When we used to go through code for company awards, we&'d look at each nominated product and look to see who developed it, and Jim&'s name would pop up periodically. He was still programming until about 1997 or 1998,” Joyner says.

Goodnight says he was doing some programming a few months ago to check out the latest generation of 64-bit and multicore processors, and he finds the notion that every machine in the future will be a multiprocessing machine intriguing.

Goodnight is an example of someone who got onto an idea “and followed through on it,” says Robert Passmore, an independent consultant based in Durham, N.C. The whole SAS tool started out in academia. “It grew up before there were any similar statistical tools supplying the needs of agriculture, research, labor department, etc.,” he explains.

In more recent years, companies like Business Objects and Cognos have moved into SAS territory with their own analysis tools, while SAS itself has adopted a more solution-centric focus. That more user-friendly solution orientation is, in and of itself, a challenge, as SAS is best-known for its analysis/statistics packages. And, most now see Microsoft&'s attempt to move up the analytics food chain from Excel to SQL Reporting Services and beyond as a long-term threat to even SAS.

SAS partners are banking that Goodnight can keep his company ahead of the curve. They value his advice and insight. Donovan remembers a time when Goodnight sat down with him, a representative of a tiny company, to talk about how to grow his business. Donovan can&'t see Oracle CEO Larry Ellison or other tech pooh-bahs doing the same for a small partner.

Adds Joyner: “The line I&'ve always used is that Jim&'s the most extroverted introvert I know. A lot of things that interest him are obviously on the analytical side and typically people like that are very introverted, but he overcomes that.”

Of course, Goodnight&'s tight association with his company could also be problematic long term. Critics say there is no clear-cut heir apparent, for example, although some cite Chief Marketing Officer Jim Davis as a potential candidate. Many Wall Streeters who have circled SAS in hopes of investment banking business still shake their heads over SAS&'—or Goodnight&'s—decision to remain private when virtually no one else did.

That decision could be viewed as prescient given the raft of regulations aimed at preventing future financial scandals a la the Adelphia, Enron, Tyco and WorldCom debacles. Goodnight has been vocal about his belief that running a company with quarterly earnings targets is an impossible dream.

“There&'s no possible way I can tell you what my earnings are going to be to the penny each quarter,” he told Morley Safer on CBS&' “60 Minutes” two years ago. “There&'s only one way to get there to the penny—you have to cook the books.”

“I think Jim has said publicly that his biggest challenge is leadership development. The real test of any leader is cloning and building future leadership,” Donovan says.

Employees are so dedicated to Goodnight, however, that they brook no criticism—real, implied or entirely nonexistent. Several long-term employees reached by phone refused to discuss the company or Goodnight on or off the record and referred all calls to corporate public relations.

“It can become kind of a ‘Stepford Wives&' thing,” acknowledges one longtime business partner. “The upside is the camaraderie is great,” he notes, before adding that one potential negative is a certain uniformity of workforce.

“Goodnight has created not just a technological but a cultural juggernaut,” this partner says. “That&'s fine as long as you&'re still drinking the Kool-Aid.”

Luckily for SAS and Goodnight, almost everyone there still is. And given the company&'s market penetration—its software runs in 96 of the top 100 Global 500 companies—customers are just fine with the Kool-Aid too.