Entry No.112

IT Writers Awards

Software billionaires are almost a dime a dozen in the United States. You can't walk down the street without tripping over one, or at least seeing one on the cover of a magazine. But it's not the money that makes them interesting it\'s what they do with it.

Larry Ellison, founder of database behemoth Oracle, likes nothing better than flying fighter jets and dating beautiful women. Bill Gates is a little boring but IPO junkie Jim Clarke, founder of Silicon Graphics and co-founder of Netscape Communications, loves big boats stuffed with high-tech boffinry.

So where does SAS Institute founder, president and CEO Jim Goodnight fit in? Technically, he's a software billionaire, although SAS, the company he founded in 1976 to develop statistical analysis software, is a private holding, making it difficult to get a handle on exactly how much he's worth. With a turnover of $US1.02bn ($1.75bn) in the year to last December, he's pretty comfortable and will be even more so when 15% of the company is floated next year.

"I still have reservations about going public," says Goodnight, his doubts stemming from the power wielded by analysts and the market. He is concerned enough to limit the placement, much of which will be allocated back to employees in the form of stock options.

This will in turn limit the ability of the market to call the shots on research and development spending - about 30% of overall turnover compared with an industry average of 14% - or to make changes to the company's famous lifestyle diktats.

The semi-float is going ahead for two main reasons. One insider says it will help the company get its financial reporting act together; another says it will make the market and analysts take notice. Goodnight is adamant the main reason he's doing it is that his employees, some of whom have been tempted by the potential for instant wealth via start-up IPOs, will have the opportunity to share in the gains.

At 58, Goodnight is tall and quietly spoken with a noncommittal handshake, a dry sense of humour and an unwillingness to make direct eye contact. But ask him why he insists that employees at the company's Cary, North Carolina, campus are locked out of the building before 8.30am and after 5.30pm, his body language changes. His back straightens and the voice becomes more forceful.

Rigorously enforced hours are something of an anomaly in the software industry, where employees sleeping on office floors during hellish deadline periods are nothing unusual. "I believe what we do is a creative endeavour, and you can only be creative for a certain number of hours a day," says Goodnight. "Working long hours is not the best way to get that sort of creativity out of your employees." 

That he is an avid coder, and has been since he wrote the first version of the SAS system back in the '70s, may also have something to do with it. I love writing code. It enables you to just lock everything out and focus on the one task at hand. For me, personally, it's as much recreation as it is a job.

Subsidiary operations across the globe are run with a great deal of autonomy - and limited working hours codified at headquarters are usually the first thing to go out the window. But certain perks flow through. The Australian headquarters at Lane Cove, northern Sydney, has a squash court, a cafeteria with subsidised meals and fresh fruit and confectionery in the office.

In the US, things operate on a larger scale. The Cary campus boasts not only its own school but several pre-schools catering for different age groups as well as an airline and a golf course. 

Goodnight believes people won't produce their best unless they're happy and rested, with harmonious home lives. Providing these services, as well as subsidised housing and ensuring employees simply cannot work late, are his way of ensuring they are productive and satisfied.

For some, it's a little too cult-like for comfort. But the record stands. SAS has been ranked as high as sixth in Fortune magazine's list of best companies to work for in the US, while its employee turnover rate of 4% compares with a technology industry average of 20%.

Whether this will change when SAS goes public remains to be seen. Goodnight insists on a valuation in excess of $US20bn and will remain a majority shareholder by a huge margin. In the technology world, the culture of an organisation is driven by its founder and SAS staff are lucky to have a leader wedded to the idea that profits stem from employee happiness.

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