Shai Agassi , CTO of SAP uses his blog to argue that, in fact, he loves Open
Source – that his views last week were misrepresented. He cites SAP’s work to date with MySQL (see nice post from Marten Mickos, CEO about SAP here) and
Linux. Fair enough – but not sure if he will profess that love when Open Source
products are more competitive in the application layer. He says SAP has created
$ 10 of revenues for its partners for every $ 1 of its own revenue. Very little
of that has gone to other application vendors. Vendors like Virsa with a
compliance product are doing ok around SAP today, but the last decade is strewn
with a number of application vendors which tried and failed to partner with SAP
– and SAP ended up delivering its own competitive functionality.
It is fitting that Shai used his blog to make
his points. In the old world, he would have complained in a letter to the
editor, and may be a few weeks later – maybe - his point of view would have
been published. Blogging has allowed publishing to become personal. While much
attention goes to its licensing idiosyncrasies, Open Source is about a similar
movement to give developers much more publishing power and delivery speed at
ridiculous price points. It promises to break the shackles of complex,
monolithic software with release cycles in months and years.
Blogging and Open Source are both at tipping points similar
to where personal computing was in 1984. Then, Apple famously celebrated the
maturing of personal computing with its Big Brother ad during the Super Bowl.
Whether Shai likes it or not, SAP is similarly an emblem of command and control
– the IBM mainframe version to Open Source’s Macs - its decentralized community.
The reality, of course, is Apple did not kill the mainframe.
It did force far more realistic mainframe price/performance points and a much
more customer centric IBM. Right now, just
about every aspect of SAP’s licensing, maintenance, training and consulting
pricing is off the charts. And most of the $ 10 to 1 partner revenue Shai mentions
goes to its SI partners – another sore spot for most customers. As far as
innovation goes, the same Apple has raised the bar with its rapid-fire series
of new products when SAP keeps promising a mega-architectural, long term Web
services shift.
Shai is still an entrepreneur at heart. Much as he may think
of SAP as nimble and entrepreneurial, the reality is SAP has become addicted to
a good life (see Killing the Golden Goose? ). SAP pricing and delivery performance is driving customers to consider
not just Open Source but also SaaS, third party maintenance and offshore
implementation vendors. The best way to keep these competitive forces at bay is
not to bad mouth them but to relentlessly re-invent SAP and its ecosystem.
May be an Open Source vendor cannot afford the estimated $ 2.4m a 30 second ad in the 2006 Super Bowl in Detroit, but way things are going soon ....
