Agassi: For and against open source

SAP board member Shai Agassi discusses the company's ERP software, ESA, and more

While one software visionary wonders how to get young people interested in developing dry business application software, another may have the solution: open source.

"If I could just find a way to get a 22-year-old kid passionate about processes and the improvement of manufacturing and things of this nature, that would be great," said SAP board member Shai Agassi, who is responsible for the company's product and technology group. Agassi discussed the company's flagship ERP (enterprise resource planning) software, new Enterprise Services Architecture (ESA), and more in an interview at the company's Sapphire user event in Boston last week.

Dave Duffield, who has founded a handful of application software companies including one of SAP's biggest former rivals, PeopleSoft, which was later acquired by Oracle, may know a good way to reach these kids. The software entrepreneur has launched a Web site called Dave's Next Move ( and dropped a few hints of how he plans to "tackle the traditional ERP market in a nontraditional way" by including open source in his mixed bag of goodies.

Although Duffield hasn't laid out his strategy yet, he whets the appetites of readers by talking about a "revolutionary approach" and a "paradigm shift" in developing ERP applications, which have traditionally been "too expensive to deploy and maintain." Could Duffield be thinking of possibly creating an open-source suite of basic ERP applications and letting a community of "passionate" users add features to the software based on a model similar to the open-source Linux community? Let's wait and see.

Establishing an open-source ERP community that generates a common code while allowing for customization would be, well, something of a revolution, at least in the eyes of SAP, the world's largest business applications vendor.

"Open source has been a great creator of community innovation," said Agassi. "This happens when you have lots of people out of a job or nearly out of job, like graduate students or even undergraduate students, who are really passionate about something."

In the area of business application development where passion appears to run thin, companies like SAP have to invest billions of dollars in product innovation, according to Agassi. And they need to charge for these products to pay the software engineers that develop them.

"Our whole financial model through which we innovate is one built on intellectual property," Agassi said. "We build intellectual property and maintain it. We can't just say 'take our intellectual property and do whatever you want.'"

Although SAP supports open source in several areas -- the company allows its applications to run on Linux, is a major contributor to the open source mySQL database and is opening its APIs (application programming interfaces) -- "we just don't believe open source is a religion, and we don't want to get involved in the religious battle that some people have turned it into," he said. "We'll embrace open source where it makes sense."

And, perhaps, on the day Duffield appears at the front door with the industry's first open-source ERP product.

Copyright © 2005 IDG Communications, Inc.

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