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James Goodnight

Abstract

James Goodnight (born 1943) joined a North Carolina State University project to analyse agricultural field data as a graduate student in 1967, and has run the company that grew out of it since it was incorporated on July 1, 1976. SAS Institute is the largest privately held software company in the world, with revenue above $3 billion, and it has never sold a share to the public: Goodnight owns about two-thirds of it. He is known for two things beyond the software, which is the statistical system large companies, banks and pharmaceutical firms have run since the mainframe era: a campus in Cary, North Carolina, with a 35-hour week, on-site medical care and turnover a fifth of the industry’s, which Fortune twice ranked the best place to work in America; and a refusal, over fifty years, to do what everyone told him a software company must do.

James Goodnight
Jim Goodnight at the World Economic Forum on Latin America, 2009. Image: World Economic Forum, CC BY-SA 2.0, via Wikimedia Commons.

Raleigh

James Howard Goodnight was born in Salisbury, North Carolina, on January 6, 1943, grew up in Greensboro and, from the age of twelve, in Wilmington, where he worked in his father’s hardware store. He went to North Carolina State in Raleigh for a bachelor’s degree in applied mathematics (1965) and stayed for a master’s (1968) and a doctorate (1972) in statistics. Between them he spent time at a company building electronics for the ground stations that talked to the Apollo capsules, an experience he has cited for the working conditions he later refused to reproduce: guards checked employees in each morning, the hallway coffee came from machines you had to pay, and turnover ran at about half the staff a year.

The Project

In 1966 Anthony Barr, a graduate student in the NC State statistics department, began writing software to analyse agricultural experiments for a consortium of southern land-grant universities, on a National Institutes of Health grant. Barr wrote the original analysis of variance and regression programs; Goodnight joined in 1967 and developed the statistical routines, among them the general linear model procedure, PROC GLM, that let the same code handle unbalanced designs. When the NIH grant ended in 1972 the University Statisticians of the Southern Experiment Stations paid to keep the work going, and the Statistical Analysis System was leased to other agricultural departments. John Sall joined in 1973, and Jane Helwig wrote the documentation. By 1976 there were about 100 customers and 300 people came to the first users’ conference in Kissimmee, Florida. On July 1, 1976, the four incorporated SAS Institute in Raleigh, with Goodnight as president and Barr, Sall and Helwig as the other owners. First-year revenue was $138,000.

The product was a language of its own kind: a DATA step that read and transformed records, followed by PROC steps that ran named procedures on them, run in batch on IBM mainframes and producing printed tables. It suited large organisations with clerks and programmers rather than research statisticians writing new methods, which is the distinction the history of statistical computing turns on. Pharmaceutical companies adopted it for clinical trials, and regulators came to expect SAS output; banks used it for risk and credit scoring; governments for surveys. It was rewritten from PL/I, Fortran and assembler into C in 1985 for portability, which put it on minicomputers, Unix workstations and PCs, and its revenue passed $10 million in 1980 and $1.1 billion in 2000.

Barr left in 1979 and sold his shares to the others; Helwig also left. Sall stayed as co-founder and executive vice president and in 1989 released JMP, the interactive, graphical statistics package for the Macintosh that the company still sells. Goodnight has been chief executive throughout.

Cary

The company moved in 1980 to land in Cary, west of Raleigh, and the campus is the part of the story most people know. Goodnight set the working week at 35 hours, built a medical centre, gymnasium and subsidised child care on site, put fresh fruit and M&Ms in every break room, and paid salaries at market rather than above it, on the theory that people who were treated as though they intended to stay would stay. Annual turnover has run between three and five percent against an industry average of twenty or more, and the Stanford business professor Jeffrey Pfeffer estimated the savings in recruiting and training at $60 to $80 million a year, which is how Goodnight has always defended the campus: as arithmetic rather than generosity. 60 Minutes profiled the campus in 2003, and Fortune put SAS first on its list of the 100 best companies to work for in 2010 and 2011.

The other refusal was the stock market. SAS explored a public offering in 2000, at the top of the dot-com bubble, and dropped the plan; in July 2021 it announced it would prepare to be IPO-ready by 2024, and that date passed with the company still private. Goodnight’s stated reason has been the same each time: a public company must answer to analysts every quarter, and he did not want to. Revenue passed $3 billion in 2023 with about 12,000 employees, and the company spends roughly a quarter of it on research and development, a share few public software firms match.

Outside the Company

Goodnight and his wife Ann, with John and Ginger Sall, founded Cary Academy, an independent school, in 1996, and the Goodnight Educational Foundation in 2005, which funds scholarships at NC State. His wealth, almost all of it the SAS stake, has been estimated at about $18 billion, the largest in North Carolina. He has said he intends to keep running the company; at 83 he still does.

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