August 04, 2008, 10:08 AM — BI (business intelligence) vendor SAS is buying IDeaS Revenue Optimization, maker of revenue-management software for the hospitality sector, a move that could serve to differentiate SAS from major competitors like SAP and IBM.
Revenue management, common in the travel and hotel industries, involves maximizing profits by balancing prices with demand. The approach can be seen in airline reservation systems, where flights are often cheaper the longer in advance you book, and can get expensive when you buy at the last minute.
SAS plans to maintain IDeaS' focus on hospitality but will also use its platform as a basis for targeting other verticals. The company is also starting a "Profit Optimization Global Practice," and will develop an offering that integrates revenue management with CRM (customer relationship management) pricing and distribution.
Terms of the deal were not disclosed. IDeaS, which employs a SaaS (software-as-a-service) model, has 200 employees, according to SAS. Its customers include Hyatt International and Fairmont Hotels.
IDC analyst Dan Vesset said SAS' move is not unexpected: "SAS primarily buys only small companies with specific, targeted solutions that they can combine with other SAS products."
However, he added, "I'm quite positive on the acquisition because it's what they need to compete with larger BI vendors."
While revenue management is a niche area, populated by specialized vendors such as Revenue Analytics, big vendors such as Oracle are also in the space.
SAS already had some price optimization software, but was compelled to buy IDeaS for its technology, said Steve Pinchuk, who is heading up the Global Practice.
"Instead of building, we thought it was good to acquire them. They've perfected the SaaS delivery model and have an interface business [users] really like," he said.
SAS is anticipating happy marriages between the IDeaS software and the complementary technologies it sells. "We've got a lot of analytics we can put underneath this platform," he said.