Data analytics powerhouse SAS has a growth strategy underway in Brazil, where it intends to consistently double revenue in coming years through the expansion of its geographic presence and channel network.
Chief revenue officer (CRO) at SAS, Carl Farrell, was in São Paulo last week for the launch of the firm’s new offices and was keen to stress that despite Brazil’s current local economic uncertainty, the firm’s investment plans for the country remain bullish.
One of the top five global markets for the firm, Brazil has displayed sustained growth over the last few years and has big ambitions for the future, which can be seen in the new São Paulo HQ, now double the size of its previous base and located right next to other tech giants such as Google.
“Brazil has been one of the fastest-growing parts of the organization and I’ve put a lot of money over the last 8 or 9 years working here, and we will continue to do so as the opportunities are huge,” Farrell told ZDNet.
“We’ll continue to grow our own presence and channel network across Brazil. I did say to the team here that I want to grow geographically a little faster,” he adds.
According to Farrell, the business development approach in key regions such as Latin America and Asia Pacific is quite similar: as the fastest growing areas within SAS, the company is investing heavily in Brazil and its neighbouring markets, but also in China and India, as well as Malaysia, Indonesia and Vietnam.
“Those kinds of [growth] techniques will work across markets where we have large, regional offices, and we’ll feed smaller cells of offices in other areas. This has worked for us and we’ll continue to leverage on that approach.”
Within Brazilian user organizations, SAS has a strong presence in the local financial services sector. Other significant sectors where the company already has a presence and wants to replicate the penetration it already enjoys in other countries are telecommunications, retail and the public sector.
“A number of our solutions are gaining a lot of traction here, such as domain-based products to financial services, customer intelligence solutions for customer journeys, customer interactions, omnichannel analytics,” Farrell says.
“Other products Brazilian users are interested in include solutions around fraud risk for compliance for financial institutions, retail merchandising and customer experience and intelligence offerings, telco churn offerings, and the list goes on: manufacturing, Internet of Things (IoT) sensor data,” he adds.
Data management and customer intelligence, along with forecasting work and “general” analytics have been the best sellers for SAS in Brazil so far, with risk and fraud offerings developing a local footprint.
According to the CRO, the local developments and adoption of systems based on IoT also represent a big opportunity for the firm in Brazil.
“There’s such a large manufacturing base in Brazil. Now those manufacturers are taking more and more use from sensor data from their equipment on the shop floor to grow efficiencies, bottom lines and reduce cost – and we have the answer for those requirements,” Farrell points out.
Farrell has been doing business in Brazil over the last couple of decades and is well-versed with economic cycles including downturns, recoveries and market acceleration – precisely in areas such as analytics, an area local buyers are keen to prioritise within their budgets.
“Our strategy is to continue to expand in our footprint here in Brazil. Even though people tell me how bad the economy is, I never believe them,” Farrell says.
“I’ve been doing business here for a long time and been through a few cycles. I find Brazil to be very resilient, it will weather the crisis and continue to prosper – it’s an economy that’s got lots of resources, people and all the geographic connections that it needs,” he adds.
However, investment priorities have changed noticeably over the last two years and CIOs are cautious about where to invest. While improving the customer experience is hot at present, evolving fraud, risk and compliance capabilities has been less of a priority in general for Brazilian user organizations.
But according to the SAS executive, this scenario is also changing. That is because the recession made buyers realize that significant costs are associated to fraud and inefficiencies while reinforcing the need to improve transparency.
“I think [the requirement to invest] has to do with the increasing transparency of businesses. Regulators want to see transparency around fraud and risk in banks and retailers who now offer their own cards want the same level of compliance, for example,” Farrell says.
“In a situation or economy where there has been some issues, people tend to get more focused on transparency. And large companies are concerned about brand damage, so they need to be able to tell the outside world what they are doing to fix any problems,” he adds.
“We also did a lot of work in the data management for the last four years and there are huge opportunities with General Data Protection Regulation (GDPR) coming out of Europe, which affects large Brazilian companies as well.”
However, SAS products are at times perceived by local CIOs who would like to implement its solutions as more expensive than other market options. Another concern voiced by Brazilian buyers is that such implementations may end up being slow and too complex.
According to Farrell, SAS is fully conscious of these perceptions and also keen to address them by stating that the firm is very aware of the need to avoid long implementations and delivering results in a swift manner.
“One thing that we pride ourselves on is being able to bring the data in quickly, combine, clean, assemble the data, and then action the data quickly with analytics: we don’t implement in a way that we’re waiting 7, 10 months for an answer,” Farrell says.
“We build implementations with quick wins as everyone wants a return on investment. Senior management teams don’t want to wait 10 months for something, they want to see increments,” he adds.
In order to tackle these concerns in a more concrete manner than just relying on its reputation or sales spiel, the company also introduced agile ways of implementation along with a new approach dubbed “result-as-a-service.”
“This is a way to implement [a product] with quick wins and you prioritize what you’re going to do. It’s a premium service because you give us your problem,” Farrell says.
Under the result-as-a-service approach that SAS is now offering to clients, organizations don’t need to invest in software or infrastructure, or even their line-of-business experts.
“So if you have a project such as ‘I want to run a forecast analysis here or do a price optimization in that product line’, you send the data to us, we do the analysis for you, and give the recommendation on how it would work for the client,” Farrell explains.
“It’s a very rapid way of getting to a return on investment (ROI). You may want to take the process back internally to a point in time, but we can get you the ROI much faster by using our own staff, our own infrastructure. You just give us the data,” he says, adding that under the premium service, a project that could take months can be reduced down to a few weeks.
Fending off competition
As in most markets, there is currently an explosion of small vendors in Brazil who sell specific parts of the capabilities that SAS has built its reputation on.
According to Farrell, the rise of niche competition is inevitable but SAS is confident that having a suite of products that evolve according to client needs coupled with the company’s reputation speaks for itself.
“Differentiation is very important today. There’s very small niche vendors, it’s now a lot easier to build a software product than it was 20 years ago,” Farrell says.
“So how do we differentiate ourselves? We have 40 years of experience, a single analytical platform covering many different areas with some very specific solution products and this is not something many can say,” he adds.
But the maturity curve in terms of technology adoption in Brazil can sometimes fall behind some more developed markets. So are local buyers ready for offerings such as result-as-a-service, or even the more advanced data analytics products that the company offers?
According to Farrell, SAS has been doing its part in interpreting key developments in ways of doing data analytics which have existed in the US for nearly a decade and educating its customers.
“[Customers] typically start small, do some test beds and then grow. I think adoption is moving faster than it used to because technology moves faster today than it did 3 or 4 years ago,” Farrell says.
“And we are trying as a global company to ensure our offices outside of North America, in regions such as Latin America and Asia Pacific, are enabled much faster than they may have done 5 years ago,” he adds.
“But the need to educate is lessening and the adoption curve is shortening. It may have taken two years for a technology from the United States to get to Brazil. It isn’t two years anymore, as everything is much more agile because of technology itself.”
Strengthening relationships with clients will be a key area of focus for the sales teams at SAS in Brazil, but according to Farrell, they have to be able to create value and not simply sell.
“I counsel all of our sales teams and insist on the point that unless you have a relevant, differentiated proposition to take to an executive, [clients] won’t give you the time,” the CRO says.
As well as intensive training for sales teams, Farrell wants the sales pitch to have some certain values at heart and have the differentiators in relation to the competition in mind.
“We say to clients that we can provide a competitive advantage, that there’s a lower risk factor and that we’ve been doing this for 40 years, plus we have a single platform with over 200 products,” the executive says.
“A lot of our competitors have acquired technology and bolted it together. That’s not SAS. I would suggest we invented analytics a long time ago and that we can bring all that experience and domain to client’s problems,” he adds.
What about the possibility of acquiring niche suppliers in Brazil? According to Farrell, SAS tends to acquire companies for technical or domain knowledge, differently to some of its peers.
“We have never acquired for revenue like some of our competitors. We have looked at some [Brazilian] companies where we think we need to gain more domain or technical experience and some are attractive,” Farrell says, without disclosing further details of possible local competitor acquisitions.
Expanding the channel
A significant change in the analytics giant’s future plans is the further approximation to its channel network. According to Farrell, SAS has not traditionally been a channel company and that has not been its go-to-market plan either, but it has been working towards changing that.
“In the last several years, we’ve been architecting products in different ways so it does fit in the channel. I created an inside sales strategy about five years ago, so we’ve built products for our inside sales teams globally and got familiar with the kind of channel-ready product required,” Farrell says.
“[Channel-ready products] have to be simple, easier to install and have a lower cost to get the value-added reseller channel going. So that product has evolved now for our sales team globally, but also for channel product globally,”he adds.
SAS will continue to pursue that strategy and will now work the next level up, which are the more domain-specific resellers.
“So I’ll pick a fraud company in Brazil who’s been very successful selling our fraud tools. They sell the software in their territory and they’ve done extremely well, but have their own domain business expertise in that area, so we provide them with the software to do that,” Farrell explains.
SAS already has a global alliance organization and is gradually recruiting more channel partners each year. According to the CRO, the company is being careful to recruit the right number of channel partners each year to ensure they can be properly supported.
“I could go out tomorrow and recruit 50 partners, but unless I can give them the right support to be successful, it would be a waste of time for them and for us,” Farrell points out.
“We’re all about the quality side of it. But it’s also a key strategy for Brazil to get to some of the areas where we’re not present today, or some of the domain areas that we’re not covering today,” he adds.
In terms of what is expected from the Brazil operation in future, Farrell says that although SAS is a private organization, it operates like a public company – which enables him to be confident about the country’s performance for 2017.
“We work two to three quarters out. I pretty much know where the revenue is for most of the year globally and I expect solid growth in Brazil,” the CRO says.
“I expect deeper penetration in some solutions and emerging areas, as well as market leadership within analytics in Brazil. I also expect staff and revenue growth,” Farrell adds, while highlighting that the main challenge ahead will be execution.
“You can never completely forecast what’s going to happen with life. Things happen. Politics change. But we have the product, the market, the experience and the personnel. We just need to bring it all together.”