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Security is so passé, so last year. What businesses want in their software today is the capability to turn reams of data into strategic intelligence, says the man behind one of the largest private software companies in the world.

"Right now this whole area of business intelligence is the No. 1 thing that's on the IT managers' minds," said James Goodnight, co-founder and chief executive officer of SAS Institute Inc.

Technology advances brought to market in the past 18 months are changing the way programs are written and bringing unheard-of power to new business software, Mr. Goodnight, 63, said in an interview while on a recent visit to Toronto.

Specifically, two key developments on the hardware front, multicore processors and 64-bit computing, are driving the change.

Multicore processors combine more than one processor onto a single chip to allow for significantly faster processing speeds. And the move to 64-bit computing, from older 32-bit machines and programs, dramatically increases the amount of data a computer can use in its working memory -- making it easier to handle jobs involving huge amounts of data, such as video or databases.

The changes have profound implications for software development, Mr. Goodnight said. "You have to go back and rethink how you write programs. You have to assume everything you need can be kept in memory, and you want to take advantage of the multicore chips to process it."

The advances can give customers powerful new capabilities. For example, a bank developing a rewards program will want to determine who are its most loyal and reliable customers. To do so, it will need to scour large databases of transactions.

Even for a small bank, the task is enormous, often involving an analysis of at least one billion transactions. In the past, such a project has required a company to crunch numbers in long batch runs overnights. But today, using the latest computer technology, a bank can mine that data in an hour, said Mr. Goodnight, who holds a doctorate in statistics from North Carolina State University.

"Companies get so much data today, and they are realizing this data can be a strategic asset if they use analytics to find out the patterns inside," he said.

SAS's analytics software helps companies analyze their data to spot unseen trends and predict outcomes based on historical patterns. It helps managers forecast demand, assess staffing and other resource needs, and predict customer and market behaviour.

The company, based in Cary, N.C., employs about 10,000 and said it sold about $1.7-billion (U.S.) worth of software and services last year.

Mr. Goodnight, who has served as CEO since SAS was incorporated in 1976, said the new power in computing is having another positive effect on the software world. In a period defined by industry consolidation, small firms are thriving. With today's PC power and engineering talent, barriers to the business are lower than ever.

Business customers are definitely trying to limit the number of companies from which they buy software. Fewer suppliers mean fewer headaches when it comes to integration. This trend has driven an industry buying spree in the past couple of years, with major players such as Oracle Corp. and SAP AG buying smaller rivals. But Mr. Goodnight sees consolidation slowing and thinks there will be a strong base of software firms with sales under $250-million that continue to drive innovation.

He also doesn't see the surge of developer talent in India and China undermining the software industry in North America. In the short term there will be more development done overseas. SAS itself has research and development operations in both countries. But salaries are rising at 15 per cent a year in India, meaning the wage gap between workers in the West and the East will start to close in five or six years, he said.