Editor’s note: Rick Smith is cofounder and editor of WRAL TechWire which launched in January 2002.

CARY – Jim Goodnight and John Sall have become billionaires and have built an enduring legacy for success at SAS. That’s why I don’t believe Broadcom is the best company to acquire the global software firm.

Someday the aging Goodnight (majority stockholder, 78) and Sall (73) will bow to the inevitability of age and cede control of the privately held company they control all stock in. And based on their histories I believe they will want someone as devoted to what they have been praised repeatedly for over the years:

  • Common good AND profit
  • Belief in employees AND innovation
  • Technological excellence AND sustainability

To name a few …

Rick Smith, WRAL TechWire’s editor and a cofounder, writes The Skinny.

Those are reasons why I believe Goodnight (as majority owner) has said “no” to companies such as IBM in the past. The IBM of a decade ago is changing under new leadership – but back then … well if you know IBM history then its reputations was not stellar.

Now SAS is encountering headwinds. Profitable but flat revenues over five years. Has the time come to sell?

The sell risks

And where does Broadcom fit in? Maybe not well.

Barron’s today had an onimous warning for SAS employees:

“The deal fits neatly into Broadcom’s playbook,” Barron’s said. “In the past few years, the tech giant has made acquisitions to carve out costs and generate cash flow, Charles Lemonides, chief investment officer at ValueWorks.”

But he added:

“It doesn’t get growth from business it acquired five and seven years ago because it tends to hollow them out.”

Economist Dr. Mike Walden also sees risks to Cary and the region:

“The big question is, would the new owners move some or all of SAS’s employees and operations.  If not, then the potential adverse impact is minor, and perhaps the sale could even be a plus with an infusion of new capital, markets, and complementary operations,” Walden warns. “But if a sizable part of SAS ultimately leaves the area – while not a devastating blow – it would be a setback to the region.  SAS is home-grown, and it had a big impact on making the Triangle a national tech center.”

The state of SAS: After 5 years of flat revenue, growth may be returning in 2021

Such a vision doesn’t fit with Goodnight and Sall. Goodnight after all did launch an airline and a video game company. But selling SAS and watching someone dismantle it doesn’t fit the SAS story – founded from days of nothing with Goodnight and others sending out faxes to drive business to the analytics startup from his and Sall’s knowledge as professors to never not making a profit in 45 years. Layoffs at times, sure. Staff and leadership departures, of course. Talk of an IPO that died – it happened. Anyone who knows Goodnight would find it difficult to see him kowtowing to Wall Stret investors.

Best buyer?

So who should buy SAS if Goodnight and Sall sell?

  • Why not Apple – building a big presence here?
  • Why not Google – also going big in the Triangle.
  • Why not Facebook – ever growing in the state.
  • Why not IBM? Cash poor since emptying the vaults to buy Red Hat for $34 billion three years ago.
  • Why not Oracle? Two words: Larry Ellison. I don’t see an Ellison-Goodnight team.
  • And what about Amazon – maybe HQ2 not built here but in nation’s capital but an HQ3 built on the SAS campus?
  • I guess Dell and HP shouldn’t be written off – or even Lenovo. But gear remains their king.

Nope. My bet is Microsoft.

Why? It too is growing in the Triangle, and Microsoft CEO Satya Nadella is now good buddies with Goodnight. The companies have a growing partnership.

A deal’s terms

And I could see this happening:

Microsoft could afford to pash cash – not stock as expected from Broadcom. (When’s the next Street crash coming? You know there will be one.)

SAS partnering with Microsoft, will work with Red Hat, projects growth in 2021

Nadella and Goodnight share vision. I could see Nadella leaving Goodnight and Sall in charge for as long as they want to remain involved.

And Goodnight could stipulate: Buy us for this price but sign a contract to keep SAS as a separate firm and don’t touch staff, R&D spending (Goodnight still writes code) or campuses for five years.

(No guarantees in business, however – look at Red Hat’s Jim Whitehurst leaving IBM post-merger.)

And there’s this: Who is to say that Goodnight is thinking it’s time to sell and the Broadcom talk is a way for him to drive up the selling price with numerous stipulations as outlined above?

My bet is that this is Goodnight’s strategy. Sell. Keep control. Protect legacy.

Why not?