Users: SAS future in ASP arena uncertain

Computerworld - FLORENCE -- SAS Institute Inc. threw its hat into the crowded ring of application service providers (ASP) today, announcing customer relationship management (CRM) software and services aimed at midmarket retailers that might otherwise find its high-end analytics applications too pricey or complex to manage.

But whether the rent-an-application approach can give SAS serious traction -- and serious revenue -- in the turbulent market for CRM software is an open question, said several users here at SeUGI 19, the SAS EMEA User Group International's annual meeting.

"I think they're sticking a toe in the water," said Shaun Coyne, chief technology officer at GE Capital Real Estate in Stamford, Conn., one of SAS's largest customers. But, he said, "payback needs to be there early on" for companies implementing CRM.

Pairing itself with Plano, Texas-based Electronic Data Systems Corp. as the hosting site and Compaq Computer Corp. as the hardware provider, the Cary, N.C.-based vendor is offering SAS IntelliVisor for Retail at an initial sign-up cost of $30,000, with monthly fees of $20,000.

Word of SAS's CRM move began to circulate yesterday as the three-day conference got under way (see story).

"In the CRM world, there's no clear leader because no one product manages across all customer channels equally well," said William Lepler, vice president of CRM at The Limited Inc. in Columbus, Ohio. "If SAS can keep up the high quality of its software, they'll be successful at this. But the key differentiator will be the ease of integration because CRM is an integration nightmare."

AMR Research Inc. in Boston recently estimated that of approximately 500 CRM vendors in the market today, roughly 85% will be gone by 2005. Yet CRM remains top-of-mind for many IT executives and their companies, according to a recent study from Intellor Group Inc. in Gaithersburg, Md. The analyst firm surveyed 137 companies, 88% of which were using or thinking about using CRM systems (see story).

"The combination of SAS's tool capabilities and its core strength in drawing information from any source speaks to a position no one else owns," said Michael Boyd, director of CRM at retailer Eddie Bauer Inc. in Redmond, Wash. "The way I see it, they're trying to evolve to a point where they're charging for value vs. just charging for the product."

The ability to gather and crunch valuable data about customers from multiple channels, via the Web, catalog sales or store locations, is the force fueling electronic CRM, Boyd noted. "We're just starting to understand how to use channels more effectively,"