Shai Agassi, SAP, and Open Source Software
In mid-November, Shai Agassi, (SAP, President of the Product and Technology Group) caused a bit of a stir with comments about "IP socialism" and open source in a public presentation. The original news article is here, Shai's blog commentary defending and clarifying his statements is here, the vnunet follow-ups are here and here. Mårten Mickos, MySQL CEO, follows up with an excellent response (here) being ever pragmatic and observing that actions speak stronger than words and pointing out some of the positive actions SAP has done around open source software. This is where I want to go in this post. One of these actions demonstrates that as poor as Mr. Agassi's rhetoric is (and we'll tackle that in a moment), SAP actually "gets" open source business tactics as well as Sun and IBM.
In September 2002, at the SAP developer's event, SAP announced the release of SAPDB. SAPDB was free software in every sense of the word, including the General Public License (GPL). Essentially, they acquired the assets of Adabase (yet another relational database that tanked against the Oracle juggernaut) from Software AG. They then spent 100 people times two years modernizing the old code base, adding objects and XML to the engine, and so forth. A conservative back-of-the-envelop estimate would put the engineering cost at about US$20M. And then they released binaries (for Solaris, AIX, HP/UX, Windows2000 server, and Linux) and source under the GPL. The history of sapdb.org is captured here (courtesy of the Wayback machine).
Certainly the German government must have loved this move. A preeminent German software company paying its taxes and hiring lots of other tax payers also does free software, something the German government certainly seemed interested in at the time. This was a great PR play. (Indeed, I wonder what the research and development tax implications of this move were in Germany at the time?)
Initially, they even played the game very well as a large conservative corporation around patent/copyright taint issues. While SAPDB was free software, and they built a support and user community around it, they weren't accepting changes back from the community. They claimed at the time they were still "figuring out how community development worked" (and indeed their lawyers were probably sending loud fear signals around potential litigation as all large firm conservative lawyers are culturally and genetically required to do.)
The following Spring, SAP passed the entire community problem off in a partnership with MySQL AB, a company with deep experience in managing community development and with a different legal risk profile. SAPDB was rebranded MaxDB. The timing was probably perfect for MySQL AB as well, because it would have been just prior to their venture funding round and I'm sure a partnership with SAP worked well in the valuation discussion. Everyone wins — SAP, MySQL AB, and most importantly for both companies, customers win.
Geoff Moore pointed out in the original Crossing the Chasm (1991) that companies win that put forward the best "whole product" image to customers, i.e. a core product and all its complements. SAP presumably already dominates the Fortune 1000. How would they grow their R3 business? Well, they could go after the middle-tier businesses, but those customers may not want to pay the Oracle/Microsoft/IBM tax for the relational database to run R3. So SAP gave them one for free. R3 is core. A database is a complement. Of course, SAP didn't want to go into the database business (free binary only product with a large margin-eating support business), nor did they want to simply give away a 20 million dollar investment by publishing the source in such a way their competitors might be able to use it. So they put it out under the most business conservative free and open source software license available, and made a good PR statement at the same time.
MySQL was the perfect company to pick up the community development issues as they would be able to (hopefully) turn those MaxDB users into paying customers of MySQL over time as MySQL evolved in functionality, and they themselves were comfortable building a business around free software and the GPL. Indeed, this would be introducing them to a whole new class of small enterprise customers.
Neither is this IP hostile in the sense of the (mistaken) Microsoft FUD or Agassi's own naive statements in November. This appears to be the mature IP strategy of a large IP savvy organization similar to publishing ahead or setting up patent pickets around one's competitors. This is a company that can clearly see that it will spend its IP strategy dollars on assets it wishes to turn into "legal property" in their core business areas, and not in the complement spaces. This is a strategy worthy of IBM in its moves around standards and open source, understanding that not every asset need be turned into legal property (with those attendant costs, timing, and risks) when they can be used as complements to drive core business revenue streams with customers.
Which is probably why Agassi's current IP-related comments smack of bad sophistry, or at least demonstrate the need of a mature PR policy to handle the growing problems SAP will face as open source alternatives begin to mature in some of their core business areas. (They first need to learn it's a network and not a stack, and open source isn't eating it's way up the stack.) SAP certainly has challenges to face. But SAP would appear to be presently behaving as Microsoft and Oracle did three and four years ago, using tired naive rhetoric trying to frame a discussion around "property" and "innovation" rather than appreciating that all free and open source software licensing depends first and foremost on strong copyright laws, and innovation happens where you encourage it with little regard for how you license it. Agassi's "we're open source because we share the source" sounds as awkward as early Microsoft Shared Source messaging before Jason Matusow evolved the message over time to the "move to the middle" language.
Maybe that's what SAP needs at this juncture — either an Open Source Officer similar to Simon Phipps (if they're serious about an open source strategy) or at the very least a consummate diplomat similar to Jason Matusow (while they figure out what their strategy needs to be). The current rhetoric seems at odds with the past behaviour.