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WRAL sits down for an extended conversation with SAS founder and CEO Dr. Jim Goodnight to discuss the company’s 50-year history, the future of artificial intelligence, innovation, and what’s next for SAS. This is a transcript of that conversation
Cristin Severance/WRAL:
Dr. Goodnight, thank you so much for doing this
Dr. Jim Goodnight/SAS CEO and Founder:Certainly. We’ll be glad to
Cristin Severance/WRAL:SAS is obviously rooted in North Carolina, but it quickly gained this international presence. How and when did that happen? And how extensive is that presence?
Dr. Jim Goodnight/SAS CEO and Founder:Well, about four years after we moved off campus to start the company, I went to England to recruit someone to begin an office there. We were starting to get a lot of orders coming from Europe. A couple years later, the head of our European operation in England decided to move headquarters to Germany
Cristin Severance/WRAL:So almost from the start then
Dr. Jim Goodnight/SAS CEO and Founder:It was. We used to fill orders directly from here in Cary, well, in Raleigh at the time. We decided that we needed a presence in Europe. After that, we went to Japan and established a company there, then New Zealand and Australia, and slowly spread around the world. We’ve got about 42 offices right now, and SAS is being used in 140 different countries around the world
Cristin Severance/WRAL:Talk about industries. What industries are using SAS?
Dr. Jim Goodnight/SAS CEO and Founder:Well, the biggest industry is financial. About half of our revenue comes from banking and insurance. Almost every major bank is using SAS for credit card fraud. When you present a credit card to a merchant, we have 30 milliseconds to say yes or no whether or not we accept it. There’s a lot of fast computing going on to decide whether this pattern of expenditure matches this person’s past history
What we’re looking for is differences. It could be frequency of use. All of a sudden, when a credit card is stolen, they’ll take it to store after store as quickly as they can and use it. That’s a signal to us to say, “Don’t accept the charge.”
Cristin Severance/WRAL:
I mean, everyone knows of SAS, but do you think they realize how they may be using it in their day-to-day?
Dr. Jim Goodnight/SAS CEO and Founder:A lot of companies are using it that you may not be aware of. Just about every major bank is using us for anti-money laundering
Back after 9/11, the federal government passed the USA Patriot Act, which required banks to check on money laundering. So it’s not only used for terrorist financing, but also to identify money from drug transactions entering the banking system
We’ve had to write major programs to determine whether a bank deposit, for example, is part of a money laundering scheme. We have to do that for all the banks
Most every major pharmaceutical company also uses SAS. They use it to make sure their analysis of new drug applications sent to the FDA is valid and statistically significant
Cristin Severance/WRAL:Wow
Dr. Jim Goodnight/SAS CEO and Founder:Manufacturing is also a big user, mainly for forecasting. Georgia-Pacific uses us. They’ve got hundreds of programs that help speed up their manufacturing process
Cristin Severance/WRAL:So manufacturing, credit cards, money laundering. Did you ever have any idea when you founded the company it was going to grow into all of these industries?
Dr. Jim Goodnight/SAS CEO and Founder:No. We were hoping to make it through the first year
All four of us who started the company had left good-paying jobs at NC State, where we had health insurance and everything, to go out on our own
Most of us were in our 30s by the time we left and had kids. That’s one of the reasons we established sort of a nine-to-five work schedule. We had to drop our kids off at school before we came to work
We’ve done that ever since. We were one of the first nine-to-five companies around
Cristin Severance/WRAL:Is that one of the reasons, because you had kids and were in your 30s, that you really worked to make this place so different?
Dr. Jim Goodnight/SAS CEO and Founder:A lot of it goes back to the year I spent in Florida working on the Apollo program. They had guards checking us in every morning, and machines in the hallway that dispensed stale coffee you had to pay for. It just wasn’t a very friendly environment
We were all used to the relaxed environment at the university, so we tried to recreate that when we moved across the street
Cristin Severance/WRAL:What went into making this place? You’re on almost every list of great places to work. How did you create this culture?
Dr. Jim Goodnight/SAS CEO and Founder:A lot of it occurred because of our location
When we moved out to Cary, there was a two-lane road called Harrison that went into Cary, which was three or four miles away. There were no places to eat out here. There were no fast-food restaurants or shopping centers like there are now
We had to bring in food because we didn’t want people spending an hour or an hour and a half driving somewhere for lunch. We ended up hiring someone to bring in food every day
When we built our second building, we incorporated a café so people could have a regular meal
One of our founders, Jane Hellwig, had a baby and was talking about quitting work to raise her child. I said, “Well, let’s do a daycare here for you.”
So we opened a daycare in our second building. That’s part of what got it started
I always wanted private offices. I had cubicles in Florida, and I didn’t like them because they were very noisy. It was hard to concentrate
We had private offices, but that led to a lot of blank hallways, so we bought pictures and artwork to hang on the walls
A lot of this just happened. As the campus expanded, we decided to build a gym where we could play basketball, racquetball, tennis and other sports
Cristin Severance/WRAL:
Places like Stanford talk about your workplace culture. Even though other companies now offer some of these things, why do you think the culture here is still so talked about?
Dr. Jim Goodnight/SAS CEO and Founder:We were featured once on 60 Minutes. They talked about a company that looked after its people and took care of business in an honest way
We also wrote a paper with Richard Florida that I think was published in the Harvard Business Review. It was used at Stanford as a case study for students to learn about workplace amenities
Cristin Severance/WRAL:
Is it true that places like Google have benchmarked your culture? And what advice would you give to
Dr. Jim Goodnight/SAS CEO and Founder:They did. Yes, they came here to benchmark our benefits and the things we offered. I remember we went out to California to visit with Sergey. They were providing free dinners. I said, “You really can’t do that without putting it on people’s W-2s.”
We had a long discussion about the ethics of providing food for people without adding something to their W-2s. We keep our prices low, but people still have to pay for it
Cristin Severance/WRAL:First, you brought the café here because you said Cary didn’t really have options for people to drive to
Dr. Jim Goodnight/SAS CEO and Founder:There was nothing close by. I think Serendipity in downtown Cary was the only restaurant in town. Cary had about 20,000 or 21,000 people when we moved out here, with Harrison as a single-lane road all the way into town. There were no amenities out this way
We finally got the Embassy Suites built. A fellow named John Q. Hammond ended up building it after we sold him the property for a dollar because we needed a hotel. We had a lot of guests coming here
Cristin Severance/WRAL:
You said 21,000 people
Dr. Jim Goodnight/SAS CEO and Founder:Yeah, about that
Cristin Severance/WRAL:Did you ever imagine it would grow into what it is now, Cary?
Dr. Jim Goodnight/SAS CEO and Founder:
No. I really hadn’t thought about that. One of the things Cary has always done is maintain very strict zoning rules and regulations
If you build a building adjacent to a road, they expect you to add another lane to that road, which they don’t do in Raleigh. There, taxpayers end up paying for those improvements
They also have setbacks. I think the overall city government in Cary has done an extremely good job over the years
Cristin Severance/WRAL:Somewhere like the Umstead. I know you sold one piece of land for a dollar to get the first hotel. Do you want to talk about the need for the Umstead?
Dr. Jim Goodnight/SAS CEO and Founder:
My wife was involved in that quite a bit
They had originally planned to put a hotel in the shopping center across the road. She said, “It’s just too tight to do this. What about tearing down Buildings A, B and C and building it there?”
I asked, “Well, let’s find out how many acres.” I think it was 17 acres, so I said, “Okay, we can do that.”
Those buildings were pretty much old and past their useful lifetime
Cristin Severance/WRAL:How has the Triangle changed since you founded SAS?
Dr. Jim Goodnight/SAS CEO and Founder:The Triangle was very different. There were restrictions that you couldn’t build buildings taller than the tallest tree on your property. That limited a lot of the buildings in Research Triangle Park to two stories
It was designed as a research area, but one of the first exceptions they made was for IBM to build PC computers there
Back in the 1960s and ’70s, there weren’t places to live in the Triangle itself. You had to live in Raleigh, Cary, Durham or Chapel Hill
Now there are a lot of apartments in the area, so people don’t have as much of a commute
Cristin Severance/WRAL:What role do you think SAS has played in putting North Carolina on the map as a technology center?
Dr. Jim Goodnight/SAS CEO and Founder:I think we’ve proven that it can be done
We’ve got some great universities right here with NC State, Carolina and Duke, so recruiting talent is fairly easy
This particular area of North Carolina has a lot to offer. We’re two hours from the beach and maybe three hours from the mountains. If you want to take a break, you can get to either one fairly quickly
We’ve also slowly developed more cultural amenities. We’ve got all the museums in Raleigh, and that’s important in attracting talent, along with having things to do and places to go
Cristin Severance/WRAL:Why did you stay here? Why did you stay in North Carolina?
Dr. Jim Goodnight/SAS CEO and Founder:
I was born in North Carolina, and I was raised here
I spent one year in Florida working on the Apollo program, then came back to NC State to finish my master’s and Ph.D
We had kids who were born here. Most of us were born here. North Carolina is home
Cristin Severance/WRAL:
But surely you’ve had attractive offers to move headquarters
Dr. Jim Goodnight/SAS CEO and Founder:Not exactly. We’ve had offers to pay us money to move, but we’ve never accepted any of them
Cristin Severance/WRAL:Why is North Carolina different? What differentiates North Carolina from other technology hubs like Silicon Valley and Austin?
Dr. Jim Goodnight/SAS CEO and Founder:
Silicon Valley is a bunch of two-story buildings that go on forever. I’ve never found it to be a very friendly place
Austin is different. We actually built a campus there, so I like Austin. I like the County Line barbecue they serve down there. It’s pretty good
Cristin Severance/WRAL:How important are universities like North Carolina State University to SAS?
Dr. Jim Goodnight/SAS CEO and Founder:Right now we have a little over 100 students on campus working as interns from universities
We use internships as a recruiting process. If they come to work for the summer and we like them, we’ll usually make an offer and let them stay on part time until they graduate
Cristin Severance/WRAL:What advice would you give high school students wanting to go into the technology field?
Dr. Jim Goodnight/SAS CEO and Founder:Get involved in STEM. That’s the thing that really makes a difference
Cristin Severance/WRAL:What is SAS doing to support that?
Dr. Jim Goodnight/SAS CEO and Founder:At NC State, we have a number of scholarships for students majoring in STEM who come from fairly low-income households
We also support a number of professorships. They have advanced positions for young faculty they believe have a lot of potential and want to keep around, so we support that as well
Most of our support for NC State is financial because that’s where our roots are
Cristin Severance/WRAL:
In terms of your impact, talk about Cary Academy and why you funded something like that
Dr. Jim Goodnight/SAS CEO and Founder:We saw the need for more technology to be used in the classroom
There were no laptop computers to speak of anywhere. Laptops were very expensive
When we first built Cary Academy, we had regular console computers. The problem was we didn’t have educational material to use on them
I formed a group of educators that developed a product called Curriculum Pathways. It was designed for classroom use to teach subjects like algebra, history and geography so students could use technology as part of learning
Cristin Severance/WRAL:Why technology? How did you become fascinated with it? How did you become interested?
Dr. Jim Goodnight/SAS CEO and Founder:During my sophomore year, a friend told me about this thing called a computer, which I’d never heard of
I went by Patterson Hall on the NC State campus and saw a typewriter typing by itself. It was a Selectric typewriter
Cristin Severance/WRAL:
I do remember typewriters
Dr. Jim Goodnight/SAS CEO and Founder:That’s how far this goes back. I talk about a Selectric typewriter and nobody knows what I’m talking about
It was an IBM machine with a little round ball because it moved so fast you couldn’t have keys
Cristin Severance/WRAL:
But you saw this and just thought
Dr. Jim Goodnight/SAS CEO and Founder:I wanted to find out how this typewriter was typing by itself because I’d never seen anything like it
It turned out the computer was sending information to it. It was the output device for the computer
I had to learn more about it
Cristin Severance/WRAL:And that started you down the path
Dr. Jim Goodnight/SAS CEO and Founder:That started me, yeah
I took a course that spring taught by the statistics department. I signed up for it, and for the first couple of weeks I had no idea what was going on. Then all of a sudden, a light went off in my head. I got it. By the end of the semester, I was teaching the lab for the course
Cristin Severance/WRAL:
What advice would you give, not to high school or college students, but to college graduates and beyond? What advice would you give the next generation of innovators in North Carolina?
Dr. Jim Goodnight/SAS CEO and Founder:
I think they’re going to have to be prepared to learn a little more about artificial intelligence
We see a lot of companies spending a lot of money on artificial intelligence. They’re not quite sure what they’re going to do with it, but they want people to start experimenting with it
Unfortunately, the companies that provide AI now have token programs where you have to buy tokens to use it. Companies are discovering they need the right programs to keep track of all the tokens they’re spending because many are spending much more than they thought they would. AI is expensive to use
We hope the next generation will see it become less expensive
Cristin Severance/WRAL:When it comes to AI, SAS was involved in AI long before it became this buzzword. What are we getting wrong?
Dr. Jim Goodnight/SAS CEO and Founder:Right now, generative AI has taken over classical AI
Previous AI was mainly built around using machine learning to develop forecasting models. Now GenAI is being used to create answers to problems
I find it useful for things like Google, where AI can go out and give you an answer to a research question
Cristin Severance/WRAL:You support it for finding answers?
Dr. Jim Goodnight/SAS CEO and Founder:I do
It’s great to have something like Google these days. Any question you might have, you can ask Google and it’ll tell you the answer
Cristin Severance/WRAL:What about the criticism that thinking and trying to find the answer is part of the process?
Dr. Jim Goodnight/SAS CEO and Founder:
I agree
Generative AI is not going to replace humans. It can be used by humans to make their work a little faster and a little better. But humans need to be part of the loop
Cristin Severance/WRAL:What does North Carolina need to do to stay ahead in AI?
Dr. Jim Goodnight/SAS CEO and Founder:I think the governor has already established a group of people. Our head of research is involved in that group, and they meet regularly to help determine any requirements the state might have or any restrictions the state might put in place
Cristin Severance/WRAL:
Fifty years. The technology industry moves fast. What’s next for SAS? What’s ahead?
Dr. Jim Goodnight/SAS CEO and Founder:We’re adding a lot of generative AI features to SAS
When we identify a money laundering situation, we’ll use AI to explain exactly what we found so better decisions can be made by the people who need to report it
We don’t use AI to produce answers. We use it to help explain the answers so people can better interpret the results
We’re also working in a number of research areas. One of them is quantum computing
Quantum computing has made great strides in hardware. The software is still lagging behind because of the lack of algorithms we can use, but we’ve got a dedicated group working on computation using those computers
We’re also working on digital twins. We have a small group, mainly in Boston, focused on that
A digital twin is a digital replication of a piece of machinery or a factory floor that allows you to optimize performance, whether it’s the flow of goods through a facility or workplace safety
We’re doing a lot of work on safety, looking at what happens when people don’t turn off a conveyor belt before working on it, or if they jump over it or lean against it. We’re using digital twins to help forecast those situations
Cristin Severance/WRAL:Many tech companies can’t say they’ve made it to 50 years. How did you do that, and how are you planning to last another 50?
Dr. Jim Goodnight/SAS CEO and Founder:I think one of the main reasons is that we’ve developed software people need to use
It answers questions that help improve productivity, increase revenue, prevent credit card losses and stop all sorts of fraud
We do a lot of fraud work, determining which transactions are fraudulent
The fact that we’ve always focused on developing products that are in demand has kept us in business for 50 years
Cristin Severance/WRAL:
You said something in your documentary, Models of Progress, about people. If you treat people a certain way
Dr. Jim Goodnight/SAS CEO and Founder:
I say, “If you treat people like they make a difference, they will make a difference.”
That’s been one of my philosophies all along
Cristin Severance/WRAL:Thank you so much again, Dr. Goodnight, for spending this time with us
Dr. Jim Goodnight/SAS CEO and Founder:
You’re welcome
