Latin America is the fastest-growing region for software giant SAS, helped by strong demand in Brazil, Mexico and Chile.

Monday, August 21, 2006 - In January 2003, Robert Mercer took over the Brazil office of U.S-based SAS, the world’s largest privately-held software company. The start of his new job coincided with Brazil starting what would be one of its worst economic performances in many years, ending the year with a mere 0.5 percent GDP growth. Meanwhile, neighboring Argentina was just coming out of its worst economic crisis in modern times, while Chile - another nearby economy - also posted low growth.

Yet, Mercer was optimistic about the future of the company, both in those countries and in Latin America. The company had just invested heavily in recruiting and marketing despite the timing.

”We invested at that time [in what] was a bit of a gamble,” he says. ”We were pretty confident they would come around.” 

Despite the economic slowdown, he saw that SAS clients had prioritized the company, which was a good sign for future growth as well.

Sure enough, in 2003 SAS recorded a 42 percent increase in its sales in Latin America, followed by 50 percent growth in 2004 and a further 40 percent last year. While SAS does not release Latin America sales figures, they reached about $28 million last year, according to an estimate by market researcher IDC. Latin America is now the fastest-growing region worldwide for SAS.

Mercer was named director general of SAS Latin America and the Caribbean in July last year, supervising a team of 250 employees in Latin America from his base in North Carolina.

BRAZIL AND MEXICO

Brazil is the top market and also the one growing most.  Leading SAS clients include telecom operators like Vivo and TIM.

 ”We have done surprisingly well,”  Mercer says.  ”It seems Brazil’s economy is so strong that it can withstand political ups and downs. It’s not as volatile as in Venezuela. Big businesses can withstand the vagaries of the political corruption scandal.” 

Brazil ’s ruling Workers Party has been hit by a major corruption scandal that forced key officials to resign, but president Luiz Inacio Lula da Silva will likely win re-election in October.

Mexico is the second-largest market for SAS and also performing well. ” It was an exceptional year in Mexico,”  Mercer says. SAS grew by 100 percent there, partly because of a bad year before, Mercer says. Major SAS clients include the government, insurance company GNP and financial company Grupo Santander.  ” We expect them to have another good year, ”  he says.

Chile has also seen strong growth. ” I invested in Chile [and] expected that kind of return,” Mercer says.

Colombia did not grow as much as the other markets, but did manage a highly respectoible 20 percent increase. ” We were a bit slack ,” Mercer says. ” 20 percent growth was less than we expected.” 

He expects to see stronger growth in the future, partly as a result of the re-election of president Alvaro Uribe, who started his second four-year term two weeks ago.  ”With the first president ever to win a second term, we are seeing a lof of pickup in business from customers,” he says. ”There’s a lot of activity.” 

FROM FRAUD TO FUTURE TRENDS

SAS sells software that enables clients to detect fraud and money launering  - a popular tool for Latin American banks  - as well as analyze future trends. Rather than selling business intelligence, we are selling outcomes, Mercer says.

Telecom operators in Latin Americas fierce prepaid subscription market, for example, can use SAS software to predict which clients will leave and when - and thus plan accordingly. And insurers can use analytical data to better understand the risk in the market and thus pass along any reduced savings to clients.

While these are some of the most popular products, SAS also offers a wide range of other products. And all saw strong growth in Latin America, according to Mercer, who points out that IDC has placed SAS as the top business intelligence provider in Latin America the past two years.

So far this year, through July, SAS is seeing 40 percent growth in business and Mercer expects that to produce another strong year.