SAP: Open Source's Friend or Foe?

For an outfit that calls itself “the world's largest business software company”, the German software giant SAP is relatively little-known in the open source world. With 51,500 employees, a turnover of 11.5 billion euros ($16 billion) last year, and operating profits of 2.7 billion euros ($3.8 billion), SAP is clearly one of the heavyweights in the computer world. Given that huge clout, SAP's attitude to open source is important; and yet it is hard to tell whether it is really free software's friend or its foe.

On the positive side, SAP has invested in many of the top open source companies, through its SAP Ventures arm. Well-known names it has backed include Alfresco, GroundWork, Intalio, JasperSoft and Zend; earlier investments included MySQL and even Red Hat.

Just recently, it announced that it was increasing its participation in the Eclipse Foundation:

As part of its ongoing commitment to Java technology and the choice it provides to customers as well as industry-wide technology standards and open source, SAP AG is taking a more active leadership role in the Eclipse Foundation by increasing its membership level from Strategic Consumer to Strategic Developer. SAP will provide at least eight full-time development resources to various projects and lead open source projects, ensuring direct input into the development and architecture of Eclipse. As a Strategic Developer, SAP will be more active within the Eclipse community, including the new Eclipse Git Team Provider (EGit), the Eclipse Modeling Project (EMP) and the Eclipse Equinox Project. Eclipse technology has become the de-facto standard in many domains and for many companies ongoing collaboration on various projects with other industry leaders supports the standards and open source strategies of customers and partners.

These outward-facing activities present a very positive picture of the company, engaging with open source in all kinds of ways. But there's another side, one that's hidden unless you start digging through obscure documents, that's rather less flattering.

For example, the European Commission organised seven workgroups looking at various aspects of European software policy. One of these was on open source. Among the groups taking part in this was the Free Software Foundation Europe, and SAP. At the end of their joint report (PDF, HTML), there are a number of appendices that represent the particular views of participants. SAP's is by far the longest, running to some 17 pages.

Most of that space is used to bolster the following statements through supporting comments of various kinds (mostly links to news items):

A number of key open source projects depend on the contributions by mixed source / hybrid model companies

Hybrid / mixed source models seem to be a key element of the larger open source ecosystem

Open source development like closed source development has its pros and cons

It is very difficult to discriminate between open source and non-open source vendors any longer

Open source software is proprietary as well

Different business models and business interest lead to different positions regarding IPR, standardization and interoperability

The general thrust seems to be that there's no big difference between open and closed source, or between open source and non-open source vendors, and that everything is converging on “hybrid/mixed source models”.

So why is SAP so keen to blur the distinction between open and closed source solutions? An answer can perhaps be found in the main body of the report, where some members express their disagreement with sections of the main text otherwise approved by the others. Here's a case in point:

Mandates for OSS can harm OSS:

The following is a view specific to SAP and CompTIA

Open source has created an interesting opportunity for entrepreneurs as they can start a business on top of something that is already available. For example, many companies offer services and support around popular open source software packages.

Due to the mixed model growth, software vendors are combining open source with closed source, and as a consequence, the line between open source and closed source increasingly blurs. Therefore, any preferences or mandates favouring open source may be harmful for all software vendors including most open source vendors.

For example, if an open source vendor monetizes its open source contributions by selling closed source add-on components and closed source enterprise editions, such a vendor will be discriminated or excluded during such public tenders. This is particularly true when the closed source “enterprise editions” have been productized under a different brand name and thus are not recognized as an open source product anymore. Thus, even though it might sound paradoxal, preferences or mandates for open source may harm open source, because they reduce the opportunities for the contributing open source vendors to get a return on their open source contributions. Therefore, open source preferences or mandates could be counter productive in growing the European software industry.

We can see here how SAP and CompTIA are implicitly drawing on SAP's argument that there's now no fundamental difference between open and closed source, and that “mixed models” prevail. That being the case, they argue, it would “harm” open source to insist on open source only. That is why SAP spent so many pages “proving” this: it needs it to support its earlier objection.

However, just as the “mixed models” have grown in popularity just recently, so they may well fall out of favour; basing European policy on fashion rather than principle is hardly wise. Moreover, it's really irrelevant whether companies are adopting a “mixed model” or not; the European Commission needs to decide what is best for Europe, not for software companies that have built their businesses in a certain way.

There are many well-known benefits that accrue from mandating open source for European contracts – level playing-field, absence of lock-in, ease of moving between suppliers etc. More generally, it creates a bigger software commons that everyone can draw upon - not just companies, whether giants like SAP, or small startups, but educational establishments too (an important but often-overlooked sector).

Companies that have adopted a mixed model can simply re-jig their product line, offering wholly open source versions for European government consumption, and making money through their proprietary add-ons elsewhere; adoption by Europe would be a huge marketing boost, making it much easier to do this. And if they won't adapt to the situation, that creates an opportunity for new players who *are* willing to do so.

That's not the only place where SAP's attitude to open source is ambiguous, to put it mildly. For example, there's a section in the document that deals with software patents:

IPR sanity checks

Setting a clear agenda on IPR sanity checks and the ability to deliver legally binding IPR compliance statements on OSS components by a transparent body is a much needed action item.

But SAP is not happy with what follows:

SAP disagrees with the following part of this proposition

On top of providing Compliance statements this body could have the following goals from which Open Source will strongly benefit

- push for ex-ante disclosure on patents
- call for transparency of the judiciary in charge of software IPR rulings
- promote acknowledgement and full integration of alternative IPR modes aside the RAND types by Standards Development Organisation, research projects, public procurement, and public/private European entities delivering IPR-related assets.
- promote alignment of e-procurement processes to ensure the risk of vendor lock-in is evaluated and part of the decision criteria.
- push for Systematic “prior art” research on open source projects as a step of new patent analysis

The problem here is that SAP likes software patents. In another obscure filing, this time to the European Patent Office, it spends pages arguing that the current, already-porous regime for granting patents on software in Europe should be loosened even further.

Other ideas that SAP objects to in the European report include “Promote OSS initiatives targeted to commoditize software products of interest to European industries,” and the creation of the “European OSS forge” and “The European OSS test bed.”

A company that wished open source well would back these ideas. One that *really* supported free software would also fight against software patents. So, while SAP's involvment in Eclipse and investment in open source companies is welcome – and pretty self-interested, it has to be said, given that it presumably hopes to make a profit on them – it's not really enough cancel out its unhelpful attitude and statements elsewhere. If it wants to be a serious, respected player in the world of open source, as befits its size, it must do better.

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Open must be open to all

Svyatoslav Pidgorny's picture

Offering wholly open source versions for European government consumption, and making money through their proprietary add-ons elsewhere? That's a double standard right there. Software cannot be considered open source if it's open only to selected organisations and governmental bodies. EU governments do have access to Windows Server source, for instance - that doesn't make Windows any more open source.

SAP will provide at

Anonymous's picture

What is a resource? Is that meant to be an individual developer? Can companies start pulling their heads out of their own technical jargon / MBA arses and a) start talking like people rather than sounding like the output of some inventory system, and b) start treating people as human beings rather than inventory?

Certainly a foe.

mjk's picture

For example, the first thing they did to MAX DB after accquiring it from MySQL was to close its source. Any company that buys up open source projects and closes their source cannot be a friend of open source software.

re: MaxDB

shiruba's picture

Here you are confused. MaxDB was first a mainframe database from a mainframe vendor under a different name. SAP later bought the non-exclusive rights to develop and use it on other platforms. They called their version "SAP DB", and open-sourced it. Later, they got tired of maintaining the database and supporting it... especially as there were many users who used it for things other than running SAP on top of it (including me). They handed over support control to MySQL, who rebranded it as MaxDB. I know in the last year or so, SAP has taken some control back, but it is still a free product, and as far as I know, open source. Although MaxDB/SAP-DB is generally much better than standard MySQL, few in the open-source community have been interested in it, as MySQL is "good enough" for light tasks.. and if you're doing something heavier.. well then you will probably spend the money for Oracle, etc., so I don't think whether it is open-source or not even matters terribly a lot.

Tegge

Karsten's picture

SAP'S Tegge is a rogue editor. The kind of lobby consultant you don't want to work with because he does not play it very German and straight. When I saw that the Commission gave him the editing role it was almost clear for me what the outcome would be. The whole ESS industry paper is a broken process but the ESS was actually thought of by the Commissioner as a software strategy for European digital independence. So expect the Commission to take action that is more in the line with that objective than the paper written by industry.

SAP appears to be a user of Free Software

AlphaGeek1951's picture

SAP appears to be a user of Free Software, not a supporter of the Free Software philosophy. SAP apparently wants Free Software as a sort-of low/no-cost universal foundation on which to build its products. This frees it from the costs of licensing Microsoft or various UNIX system development tools and libraries and allows it to specify and deploy its very expensive and profitable software on top of a commodity platform that it has no obligation (and no commitment that is not in its own self-interest) to support. SAP has offered token amounts of support to commodity type applications (8 developers out of how many thousands of development staff) and expects the rest of us to help develop the platform for SAP to make billions of dollars/euros in profits.

The attitude toward patents tells it all. Succinctly put their attitude is:

What's mine is mine, what's yours should be shared with everyone.

Frankly, that attitude sucks.

Utter Rot

lenkite's picture

(Disclaimer: I work for SAP)

I need to correct this nonsense. Actually, we have a very hard time getting approval for using any open-source frameworks/libs in the majoriy of our products. SAP has replicated a lot of things internally that are already available in the open-source world - so the 'low/no-cost opensource based foundation' is complete rot.

SAP has contributed or is in the process of contributing a fair bit to development tooling on the eclipse platform. So, in that space we are definitely nourishing the tree we eat from.

SAP files patents yes - so does IBM, Microsoft and hundreds of other commercial companies. So?

software patents

Glyn Moody's picture

I'm not sure that being classed with IBM and Microsoft is a exactly a sign of being friendly to open source.... The point is, truly open source companies like Red Hat are actively fighting software patents because they understand how deeply pernicious they are for free software. A company that supports software patents - which, by definition, enclose knowledge - doesn't fully understand - or care - about the open source commons.

Indeed

Glyn Moody's picture

Let's hope they can move forward in the future, having learned at first-hand about the benefits of open source, and start offering them to their customers.

"...SAP will provide at

Anonymous's picture

"...SAP will provide at least eight full-time development resources to various projects..."

What is a resource? Is that meant to be an individual developer? Can companies start pulling their heads out of their own technical jargon / MBA arses and a) start talking like people rather than sounding like the output of some inventory system, and b) start treating people as human beings rather than inventory?

re: Resource

Anonymous's picture

If you really don't know that "Resource" = "person", then you are the opposite of an MBA, which is someone who knows nothing about business. Resource is just a more generic term because when it's work to be done it's by PEOPLE.. when it's somewhere to do the work, it's a ROOM... etc., etc.

You should learn the history of "resource", then

Anonymous's picture

Turns out I am an MBA (baccalaureate in compsci). The word "resource" is taught in MBA schools specifically to de-personalize people when you have to fire them or lay them off.

Years ago, the word used was "heads". We would be told to discuss "reducing headcount" by, say, 100, as opposed to "firing 100 people." The thinking goes, the less you as a manager can see people as "people", then the easier it is to give them the boot. But "cutting heads" didn't sound so good either for obvious reasons, so now it's "resource deallocation." I'm surprised you didn't know this...!

Back to the original topic, I'm with Glyn, I don't see how any company that advocates software patentry can possibly be a "friend" to free/open source. The two concepts are mutually exclusive.

Preaching what you practice

Georg Greve's picture

SAP seems to understand the strategic benefits offered by Free Software rather well, its platform strategy seems to be aimed clearly in this direction. In order to maximise these benefits for itself, it is a fairly active citizen of the Free Software community for technologies that SAP depends upon.

But what makes a Free Software company? Is SAP one? The answer is no, in my opinion: Their revenue model seems exclusively based on proprietary software. The freedom they demand and value highly for themselves they do not pass on to their customers.

If they began passing that freedom on to customers for their own software, then SAP would indeed enter the realm of Free Software companies. Right now it is a user of Free Software, as so many, and for the same good reasons that make Free Software the right choice.

So if SAP's customers listened to what SAP is doing, instead of what it is saying, they would choose to use one of the various Free Software ERP solutions.

re: Free Software

Shiruba's picture

Ok, I have to admit, I am an SAP consultant, but...

You can't seriously expect that SAP will spend millions of dollars and person-hours to develop fancy software for well pocketed clients and then give it away? This isn't Microsoft Office we are talking about here, but something an order of magnitude more complex.

The fact that they build some of their software on Open Source components is good for everyone, even if it was started for self-serving reasons. SAP has supported al sorts of open standards (XML, Java, SQL, etc.), just like Sun and IBM. Their strategy in general is similar to Sun's: Open Standards, Proprietary Implementation. SAP has also released the source to various pieces of their stack (like SAP-DB, etc.), but it's not likely they will release the whole thing any time soon.

As for the open source ERP packages... yeah that's a good joke. You work as an ERP consultant for a few years, and then tell me how likely that is to happen in the next decade or so. Companies want products, not projects. They want packages, not tools.

OpenBravo proves you wrong

Amos Batto's picture

"As for the open source ERP packages... yeah that's a good joke. You work as an ERP consultant for a few years, and then tell me how likely that is to happen in the next decade or so. Companies want products, not projects. They want packages, not tools."

OpenBravo ERP and SOP have been downloaded 1.3 million times since 2006 and has over a 100 partners promoting their products worldwide. There are thousands of small and medium sized businesses and organizations running on OpenBravo software. The Spanish-based company may not make as much money as SAP (or have as many biased ERP consultants as SAP), but it is definitely making a profit with tools that solve real world problems. More importantly, it makes a profit without limiting user freedoms or binding its customers into proprietary lock-in.

Yes, we can expect companies to "spend millions of dollars and person-hours to develop fancy software for well pocketed clients and then give it away." Of course, the FLOSS development model lowers development costs, lowers tech support costs and eliminates much of the need for marketing and sales staff (since FLOSS is it own best advertiser). Thus, it generally costs a lot less to develop a FLOSS product like OpenBravo compared to proprietary ERP software, so it often doesn't need "millions of dollars and person hours". I work at the company which develops ProcessMaker (open source business process management software), so I speak from experience here.

Proprietary giants like SAP may make very high profit margins, but thankfully we have the option to use the services of FLOSS companies like OpenBravo which make their money ethically. More and more businesses are increasingly turning to these ethical companies, nibbling away at the profits of the proprietary dinosaurs. We should do all we can to direct our business toward the ethical FLOSS companies and encourage the old proprietary dinosaurs to go extinct.

You can't seriously expect

Ann Non E Mouse's picture

You can't seriously expect that SAP will spend millions of dollars and person-hours to develop fancy software for well pocketed clients and then give it away?

Of course we don't expect it, we're not fools. You seem to be confusing what we expect them to do becuase they are a selfish proprietary corporation and what they should do becuase software developers and users are human beings and deserve rights for the software they use.

good point

Glyn Moody's picture

thanks.

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