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Despite tough economic conditions, business intelligence and analytics vendor SAS reported yesterday that its revenue for 2009 reached $2.31 billion, up 2.2% from 2008. And while many tech firms are turning to services to bolster the bottom line, SAS said its software sales increased 3.3%.

"Our continued growth in 2009 is further proof that investing in long-term relationships with customers and employees and maintaining a deep commitment to R&D pays," said SAS CEO Jim Goodnight in press release. SAS said it reinvested 23 percent of revenue in R&D in 2009 and early in the year it reassured employees there would be no layoffs.

"I wanted them to stay focused on customer needs and not be distracted," Goodnight said. Little wonder SAS was recently ranked number-one on Fortune Magazine's annual "100 Best Places to Work" list.

SAS reported growth rates for its industry solutions were highest in banking, government, health care, insurance and retail. Financial services account for 42 percent of the firm's revenue, and SAS said these companies turned to SAS to adapt to fast-changing markets and government and central bank oversight.

About 15 percent of SAS revenue comes from government, where SAS said there's growing interest in using analytics to fight fraud, catch tax evaders and optimize operations. Software sales to retailers spiked 12%, driving efforts to optimize pricing and understand and stock appropriately for regional, local and store-level buying preferences.

The world's largest privately held software company, SAS led the advanced analytics market and was second only to SAP BusinessObjects in BI software sales in 2008, according to Gartner figures. Market dynamics have since shifted, however, with gains at Oracle and the acquisition of analytics vendor SPSS by IBM in 2009.

There's no doubt SAS continues to lead in analytics, but competition is tightening in the BI market, which includes query, analysis and reporting software.

Commenting on IBM's assault on the analytics market, Gartner analyst Bill Hostmann recently toldThe New York Times "SAS has never faced a competitor like IBM. And I do think IBM sees SAS as a big, fatted cow." SAS financial results do not face scrutiny on Wall Street, so little detailed information is available.

The company said last year's results continued an unbroken chain of growth and profitability since the company's founding 34 years ago.