Once More unto the Breach

SAP and the Creature of Caerbannog at OSBC

In early January I posted a view of why I thought SAP has a good business understanding of open source software despite Shai Agassi's comments in the late Fall, offering that what they really need is a good PR strategy.  Now I'm not so sure.  Indeed, I begin to suspect that the executive sponsor of the SAPDB work has clearly left the company.   That Matt Asay chose to remind us of the Creature of Caerbannog from Monty Python's Holy Grail in his opening remarks on Day 1 is ironically fitting. 

Peter Graf, Vice-president product marketing of SAP kicked off Day 2 at OSBC with a keynote on Open Source and Open Models.  To summarize:

• SAP loves open source software and participates in many communities.  [The MySQL relationship is mentioned amongst all the other dozen or so, but without special significance despite what must have been to their credit a considerable investment of money and resources.]
• Geoff Moore has written a new book, and SAP is interpreting it the following way.
• The technology world goes through waves of consolidation, and is going through one right now. [I think he's bending a number of models to his own discursive needs here.]
• The current wave of application consolidation will be on the SAP platform.  [There's a shocker for the audience.]
  

And here's the kicker ....

• Open source software applications that haven't matured fast enough (subtext: Compiere, SugarCRM, OpenMFG) will not survive the consolidation.  [Thank God we'll have SAP.]
• SAP really cares about "open models" and the SAP model of collaboration on their platform will allow people to share their solutions.  [Herr Graf needs to go read the previous post on the difference between standards that benefit customers and vendor specifications that benefit the vendor's own ecosystem, and hopefully understand that at this point in history his customers aren't sheep.]

Of course, SAP thinks mature projects like Linux will survive.  Very convenient, as SAP gets the complement value of a less expensive Linux/x86 platform to reduce the overall solution cost to customers buying an expensive R3 world.  And I'm sure MySQL is sufficiently mature to survive in SAP's opinion, as SAP once again gets the complement value of a less expensive database to reduce the overall solution cost without an Oracle/DB2/SQL Server tax.  But certainly not those immature projects with "no customers."  Odd really considering the growing number of marque customers those immature projects are claiming. 

My frustration with it all is SAP has such an opportunity to wildly and boldly engage to the benefit of customers as IBM and Sun have done. (I've pointed out other examples we all love to talk about that are also missing huge opportunities with customers.) 

Attendees didn't pay $1500 to hear an ad for SAP.  This SAP rhetoric is positively ancient.  Indeed it sounds like Oracle several years ago as they strongly sung the praises of open source software like Linux, while pointing out all the problems with open source software like MySQL, Postgres, and BerkeleyDB .... Oh. Right.

The press have captured this as well.  One of the better bits is Dan Farber's blog post, and of course the Register is always a fun read.

Monty Python's Holy Grail [scene 21]

[text and photo from http://www.intriguing.com/mp/holygrail.asp#scripts]
TIM:  Behold the cave of Caerbannog!
ARTHUR:  Right!  Keep me covered.
GALAHAD:  What with?
ARTHUR:  W-- just keep me covered.
TIM:  Too late!
    [dramatic chord]
ARTHUR:  What?
TIM:  There he is!
ARTHUR:  Where?
TIM:  There!
ARTHUR:  What, behind the rabbit?
TIM:  It is the rabbit!
ARTHUR:  You silly sod!
TIM:  What?
ARTHUR:  You got us all worked up!
TIM:  Well, that's no ordinary rabbit.
ARTHUR:  Ohh.
TIM:  That's the most foul, cruel, and bad-tempered rodent you ever set eyes
    on.
ROBIN:  You tit!  I soiled my armor I was so scared!
TIM:  Look, that rabbit's got a vicious streak a mile wide; it's a killer!
GALAHAD:  Get stuffed!
TIM:  He'll do you up a treat mate!
....

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.