James Dixon’s Blog

James Dixon’s thoughts on commercial open source and open source business intelligence

SAS under pressure from Pentaho

with 22 comments

Computer Business Review recently reported an interview with SAS CEO Jim Goodnight in an article titled SAS CEO says CEP, open source and cloud have “limited” appeal

Firstly, welcome to the party, Jim.

This article is good news for Pentaho. Here’s why. For proprietary software companies the first rule of marketing against open source competitors is ‘don’t mention them unless you absolutely have to’. Microsoft discovered this over 12 years ago, and since then have not managed to create an effective anti-open source marketing campaign (read about the Halloween Documents here and here for more info). That’s with 10 years to think about it and over $10 billion to spend. So SAS must be under some pressure otherwise Jim Goodnight (the CEO no less) would be keeping his mouth shut. Hence the title of this post.

What this means is that SAS has moved from the Igorance phase to the Ridicule phase of battling open source, they only have Fighting and Losing to go. See Red Hat’s Truth Happens video for an entertaining description of the phases.

There are a couple of other interesting points in the article.

Jim Goodnight says of open source BI:

We haven’t noticed that (open source BI) a lot. Most of our companies need industrial strength software that has been tested, put through every possible scenario or failure to make sure everything works correctly.

He states that SAS does not come across companies like Pentaho in their part of the BI market. Interestingly he picks on quality and the extend of the testing environment, which is actually a strength of open source development over proprietary development. He implies that his customers have additional requirements that other BI consumers might not have. He seems to be saying that SAS has enterprise products and enterprise customers, leading us to conclude that open source BI is only a competitive threat in the small and medium sized business (SMB) market. There are a couple of problems with this for SAS. Firstly they lists their customers on their web site, and its very easy to cross-reference that list against the companies we know have downloaded and installed Pentaho’s software – a quick comparison shows the overlap is higher than 30%. Ouch. So much for SAS’s customers not having an interest in open source BI. You can check the Pentaho forums and see the activity of SAS customers integrating with Pentaho, and (oh no!) migrating from SAS to Pentaho. Google trends shows us how interested people are in Jim Goodnight’s company vs ours.

The reason SAS has not noticed open source BI is that those projects have gone off the radar and their sales reps don’t even hear about them. They don’t see because they’re not looking. Meanwhile, the SAS sales reps almost certainly have a deck of slides to position SAS against open source alternatives. If they are anything like the slide decks of the other proprietary BI vendors they are amusingly inaccurate FUD. Send me a copy if you have one, I’d enjoy them.

Also Jim Goodnight’s viewpoint of open source BI is interesting because it shows where the ‘Open Source Tide’ is. Here is the rising of the tide:

  • Operating systems vendors (Microsoft, 1990’s) say open source is for hobbyists.
  • A few years later database vendors say open source is fine for your OS but not for your databases
  • A few years after that middleware vendors say open source is fine for OS and databases, but not for middleware
  • A few years after that application vendors say open source is fine for the rest of the stack, but not for applications

At this point in the tide we are into sub-markets. Jim Goodnight is implying that open source is suitable for SMB BI but not SAS’s kind of BI. My favorite Open Source Tide article is a Forbes one titled A Fatal Flaw for Open Source. In this article it is essentially stated that open source is ok for everything except multi-tennent hosted applications. Wow. The tide is getting pretty high. Not much ground left to stand on. Of course the Forbes interview is with the CEO of a company that provides hosting services. The common theme here is that these CEO’s are telling us ‘open source is fine for everything except what we sell’. Predictable really. But they can never really tell you why – how can SAS tell us open source BI is not enterprise ready when they support Linux, MySQL, PostgreSQL etc?

Here is another thought. A few years ago, weren’t the established BI vendors saying their avenues for growth were going to be the SMB market and emerging markets? Now the CEO of SAS is saying he’s comfy staying in the enterprise zone. Hmm, so emerging markets is the fallback? SAS has customers in 45 countries. Pentaho has installations in over 180 countries. Good luck entering those geographies with expensive proprietary software, when open source BI is already the incumbent.

With open source presenting challenges in both SMB and emerging markets you might expect the growth of BI for the old guard companies to be rather flat – oh look

  • Business Objects (SAP): -0.2% market share growth last year
  • Hyperion (Oracle): 2.3% market share growth last year
  • SAS: 2.7% market share growth last year
  • MicroStrategy: -6.4% product license revenue growth Q3 2010 from Q3 2009
  • Pentaho is on target for 150% growth this year

One final comment: I’ve worked for proprietary BI companies including Hyperion. If you’re going to pick on open source, don’t pick on quality.

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Written by James

November 1, 2010 at 6:53 pm

22 Responses

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  1. […] This post was mentioned on Twitter by Fernando Ribeiro, James Dixon, Pentaho, bsabrin, Jose-Norberto Mazón and others. Jose-Norberto Mazón said: RT @jamespentaho: SAS under pressure from Pentaho: http://wp.me/pfXk3-bZ […]

  2. Go get’em James…

    Dyke Hensen

    November 1, 2010 at 9:06 pm

    • Why thank you Dyke.

      James

      November 1, 2010 at 9:42 pm

  3. Dr. Goodnight is in the same denial SAS had long been in about R. SAS’s aspersions about R were exactly the same: Not enterprise quality. They denigrated R then, when that dismissal was no longer tenable, they embraced it.

    You’re completely right that SAS’s attention is a sign of progress. As the saying goes, It’s better to be hated than ignored.

    Seth

    Seth Grimes

    November 1, 2010 at 9:53 pm

    • That’s a great data point, Seth. Thank you.

      James

      James

      November 1, 2010 at 10:23 pm

    • To be fair, many R core people like Venables and Harrell have been chief SAS demonizer for many years…
      the war between SAS and R is not initiated by Jim Goodnight….

      Joe

      November 3, 2010 at 4:55 pm

  4. As a grad student in stat, I have used both SAS and R. Have not heard much about pentaho, but sounds interesting.

    But I cannot let this go: the graph/stats are very misleading.

    The graph of sas institute v. pentaho: Most people know SAS as “SAS” not “SAS Institute”. So when googling the resources i don’t think they’d be googling “SAS Institute” to find out more about the product. I know that it’s impossible to distinguish “SAS” from “SAS Airlines”, “SAS Institue” or “SAS shoes”, or who knows what else with those three simple letters. (I google trended that and it was obviously a landslide in favor the other way) So to compare “SAS” to “Pentaho” would not be fair either. But that graph must be taken with a grain of salt.

    Secondly, comparing market share growth for established companies to the growth of an emerging enterprise is apples to oranges. Like saying height growth rate for a 20 year old is much smaller than that of a 5 year old. Of course it’ll be flat after a while! Analogous? :)

    Not to rain on the parade, but just to give an honest assessment. :)

    dubyam

    November 2, 2010 at 10:54 pm

    • Hi Dubyam,

      Thanks for commenting. Your points are well considered and well presented.

      Your first point is valid – but one sided. I agree that trending only ‘SAS Institute’ will lower their search volume. But only including ‘pentaho’ also lowers ours. Try comparing the search volumes of Weka (our machine learning software) vs Enterprise Miner (their equivalent product) – we eclipse them. Then you have to add in our ETL tool Kettle (again hard to separate from the noice), and Mondrian (our OLAP technology), etc. So both their search volume and ours were lowered in this chart – whether by the same amount or not is impossible to tell. Unfortunately Google trends does not allow the kind of analysis we would like to do here. But, regardless of relative comparisons, assuming the propensity to use any given search term remains constant over time, interest in ‘SAS Institute’ has been declining in absolute terms (according to Google) every year for the last 6 years.

      To your second point – I agree that growth rates don’t compare well between us and them. But my main point is that the license revenue growth rate of the proprietary vendors is largely flat – in a market that is supposedly growing at 10% per year. In this environment the average growth rate should be 10%, not 0%.

      Thank you for the light shower on my parade.

      James

      James

      November 3, 2010 at 2:15 am

  5. Hi James,

    I am a user of SAS, but also very pro open source, so I read your article with some interest. I am also a user of Pentaho, and I think it is very good software. There are a couple of points to mention from the SAS perspective. Firstly the company is an analytics company. Any company claiming to be able to compete with SAS on analytics except for SPSS would be stating an outright lie. SAP has claimed to do quite a bit of analytics, and even though they have credible analytics in the operational area, it is not true analytics or near to the level that SAS does it.

    Furthermore SAS’ BI and DI offerings were created to compliment the analytical offerings, and as such are not core offerings. If their clients are analytical clients, or use one of their industry solutions, the BI and DI portion becomes fairly cheap. The advantage though, is that you can use one platform straight from source through DI to BI or analytics, and in my experience this has had a tremendous cost saving in terms of total cost of ownership. On income generated, especially in the light of the biggest ROI not being created in the BI or DI environments, but in analytics, this is another advantage of SAS.

    When considering Total Cost of Ownership, SAS is leased software, not proprietary, and as such new software releases, support, warranties etc. are included. Your support business model seems to be very much the same as Red Hat or Ubuntu’s. So in a way even though your software is open source, the services that allow for enterprise deployment and stability is not that different form SAS’.

    Looking forward to your reply.

    Regards,

    Kobus Brönn

    Kobus Bronn

    November 3, 2010 at 10:43 am

    • Hi Kobus,

      Thank you for your comment. You have some very good points. I agree about the value in using their integrated products as a stack.

      With Weka, Kettle, and Mondrian we have features that overlap with some of the SAS product set. However we have not (from a marketing perspective) positioned ourselves as a direct competitor of SAS because analytics is a very specific market.

      My main point is SAS they must be under some kind of pressure from Pentaho (and other open source BI offerings), otherwise they would not have done the interview.

      I think it is important to note that the comments made about open source BI were not part of an interview focusing on a different topic, they were one of the main themes of the interview (and in the title).

      James

      James

      November 3, 2010 at 1:24 pm

      • Hi James,

        Thanks for the reply. I believe the market is changing, even if the major players do not realize or acknowledge it. The change in market I am specifically referring to is the change open source solutions force.

        We have started a small business, and all the DI and BI is done through your software. We would not have had this capability if Vendors like yourself did not empower us. This goes a long way to build loyalty, and in our specific case, we will not likely be changing this choice of software. I believe this result is also already showing in your market share.

        Regards,

        Kobus

        Kobus Bronn

        November 4, 2010 at 10:32 am

  6. Kobus, SAP resells SPSS PASW (formerly Clementine) although I don’t know what size user base SAP has for PASW.

    Just as many companies compete with SAS in analytics niches, there are niches where SAS does not compete. For instance, SAS has *nothing* in the area of high-velocity, event-driven analytics, sometimes known as complex event processing (CEP), nor interactive visual data analysis comparable to Tableau’s or Qlikview’s.

    Lastly, so far as I can tell, enterprises can and do implement Pentaho software without buying anything from Pentaho the company.

    Seth

    Seth Grimes

    November 3, 2010 at 1:20 pm

    • Hi Seth,

      I agree with you that there are niches, and SAS does not play in all of them. We do use SAS’ JMP software for visual data and in-memory analytics though.

      Regards,

      Kobus

      Kobus Bronn

      November 4, 2010 at 10:26 am

  7. Thanks james for the recent market study.We deal with Pentaho BI and it’s a great news for us.

    Pentaho has huge capability of market capture and is giving great comptetion to existing BI’s.

    Keep Writing.

    Cheers

    Sarika Gupta

    January 30, 2011 at 5:26 am

  8. hi,
    i want to integrate pentaho with my web application which is in struts2.0 i dnt knw how to integrate can u pls tell me step by step procedure of how to integrate and how to generate report in web application

    swathi

    April 21, 2011 at 11:55 am

  9. Hi,
    I want to generate report using struts2.0,jsp
    it is generating but when i want to generate report in client side the preview is not generated in client side its generating in my system(i.e, Server)
    how to generate report in client side…
    and my code for generating report is……
    ClassicEngineBoot.getInstance().start();
    ResourceManager manager = new ResourceManager();
    manager.registerDefaults();
    URLConnection uc;
    URL url = null;
    String s = request.getContextPath();
    final String path = System.getProperty(“catalina.home”) + “/webapps” + s + “/reports/”+”job_card.prpt” ;
    url = new URL(“http://localhost:8080/”+s+”/reports/job_card.prpt”);
    // url = new URL(pathimage);
    try {
    uc = url.openConnection();
    } catch (IOException e) {
    e.printStackTrace();
    }
    org.pentaho.reporting.libraries.resourceloader.Resource res = manager.createDirectly(url, MasterReport.class);

    System.out.println(“before pdf report creation”);
    try {
    HtmlReportUtil.createDirectoryHTML((MasterReport) ((org.pentaho.reporting.libraries.resourceloader.Resource) res).getResource(), “http://localhost:8080/LvhtGre1/reports/reportgre.pdf”);
    } catch (ReportProcessingException e) {
    log.setError(e, “Print Preview in GRE”);
    e.printStackTrace();
    } catch (IOException e) {
    log.setError(e, “Print Preview in GRE”);
    e.printStackTrace();
    }
    MasterReport report = (MasterReport) ((org.pentaho.reporting.libraries.resourceloader.Resource) res).getResource();
    ReportParameterValues paramValues = report.getParameterValues();

    int code = Integer.parseInt(goodsReceivingEntry.getCode().toString());
    paramValues.put(“jobcode”, code);
    paramValues.put(“plant_id”, plant_id);
    // Set Dimension
    Toolkit tk = Toolkit.getDefaultToolkit();
    Dimension d = tk.getScreenSize();
    int width = d.width – 400;
    int height = d.height – 100;
    int X = (d.width / 2) – (width / 2); // Center horizontally.
    int Y = (d.height / 2) – (height / 2); // Center vertically.

    try {

    HtmlReportUtil.createStreamHTML(report, “http://localhost:8080/LvhtGre1/reports/reportgre.html”);

    } catch (ReportProcessingException e) {
    log.setError(e, “Print Preview in GRE”);
    e.printStackTrace();
    } catch (IOException e) {
    log.setError(e, “Print Preview in GRE”);
    e.printStackTrace();
    }

    final PreviewDialog preview = new PreviewDialog(report);
    preview.setBounds(X, Y, width, height);
    preview.setPreferredSize(new Dimension(width, height));
    preview.setMaximumSize(new Dimension(width, height));
    preview.setMinimumSize(new Dimension(width, height));
    // preview.setVisible(false);
    preview.pack();
    preview.setVisible(true);

    swathi

    July 8, 2011 at 10:38 am

  10. Nice post! I’ve worked for SAS in Brazil on year 2000 (man! more than a decade ago!) and my profound appreciation for Pentaho steems from the fact Pentaho is so much like SAS! Pentaho is SAS Open Sourced! It is only a matter of time SAS became the “niche player” and Pentaho became mainstream. And not much time, for sure! I work now at Serpro, and Pentaho is used for every new BI project. (We have som BO and a lot of MicroStrategy, mostly because it was already there when Pentaho matured, around 2010.)

    Fábio de Salles

    March 18, 2012 at 3:14 am

  11. Maybe I’m missing something here, but Pentaho is known mainly as an OLAP server , with the sort of ETL that’s often attached to an OLAP warehouse? That is not SAS’s main business. Sounds like Microsoft is more of a direct competitor.
    The Weka acquisition might change that, but I’ve heard before on the internet that Pentaho spokespeople consider SAS and SPSS (now in IBM) to be their main competition, but I don’t see an explanation.

    Robert

    April 22, 2012 at 9:28 pm

  12. Reading all those comments again, I’ve seen something new: Jim might have been forced to comment on Pentaho not because SAS and Pentaho competes (I agree there are some overlapping, but SAS is some decades ahead in a lot of aspects), but because uninformed customers are costing them some sales. However, Jim has gone the wrong way. It is not that Pentaho is not corporate strength stuff, for it is, but BI ROI can only be achieved through great understanding of business data. As SAS still has the upper hand on this arena (Enterprise Miner goes on unbeatable, I believe) it should have stated this advantage, not tried to undermine Pentaho.

    I had always a hard time trying to sell SAS because most people (and enterprises) wants to “see” things, while real money making comes from understanding it and reaping on the found opportunities whitin it. There is no ROI by reading a report. It seems that even Jim has some trouble making it stick out for the hordes of report-runners…

    Fábio de Salles

    May 28, 2012 at 7:59 pm

  13. Exactly how long did it acquire u to write
    “SAS under pressure from Pentaho James Dixons Blog”?
    It offers a lot of good details. Appreciate it -Hermelinda

  14. This really is the 4th posting, of your site I really went
    through. Nevertheless I actually like this particular one, “SAS under pressure from Pentaho James Dixons Blog”
    the most. Cya -Bernard


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