A wave of consolidation is sweeping the IT industry, and many open source business applications will be left behind when customers pare down their suppliers, an SAP executive predicted Wednesday.
SAP sells proprietary ERP software used to track corporate finances and manage relationships with customers, but the German company faces competition from OpenMFG, SugarCRM, Compiere and others.
But those rivals are too immature to make it, said Peter Graf, SAP's executive vice-president of marketing, during a speech at the Open Source Business Conference in San Francisco. When major changes occur — as is happening today with customers retooling computer systems to adapt to the Internet — customers want to bet on known quantities, he said.
"We believe that open source business applications do not have enough time to mature before this huge consolidation wave matures," Graf said.
Graf is not the first from a proprietary software company to dismiss competition from companies that employ the collaborative, sharing methods of open source programming. But changes of heart are not unknown: IBM bought an open source Java application server company called Gluecode, despite having a successful proprietary competitor; and database giant Oracle considered buying MySQL.
SugarCRM's chief executive, John Roberts, unsurprisingly, adamantly disagrees and said his company's technology is mature enough today for use by major customers. "We relish the opportunity to compete with them any day," he said in an interview. Avid Technology is one customer that converted from SAP's products to SugarCRM's, he added.
Another voice of dissent came from Compiere's top executive, Jorg Janke, whose software is used by, among others, a French manufacturer and seller of beauty products with 2,000 stores. However, he acknowledged that some criticism of open source business software is warranted.
"There are lots of people who think open source is a quick way to form, so they put out marginal business applications and try to get venture capital funding," Janke said.
SAP isn't solely a proprietary software company, though its core products are. When it comes to open source projects, "We're both a consumer and a contributor," he said.
SAP uses several open source programs, including the Eclipse programming tools and Java application server software components such as Apache's Struts and JBoss' Hibernate. Many open source projects are widely used enough to maintain their influence, he said.
"When the market consolidates, people [put] their investments into the biggest pile," Graf said. "Which open source technologies are mature enough to survive the wave that's coming? Linux — absolutely. Eclipse? Yes. Mozilla? Most likely."
Talkback
Open Source companies are beholden to their users, not the other way around.
With Oracle, if they decide to not produce and support Oracle 8i, you either upgrade or quit using it, cause you can't get a license for it.
With Open source, if the PostgreSQL Global development group decides to stop supporting version 7.3, you either upgrade (for free, natch) or you take on the onus of support yourself. No one twists your arm to upgrade for money, and if you happen to have some bit of infrastructure you just can't upgrade today, you get to do the maths over how much it will cost you to support or scrap it.
This poor guy in the article just doesn't get it. He's lived in a world where the user is beholden to the software company for too long, and he isn't capable of seeing any other paradigm, right up until it bites him on his ass, kicks him to the curb, and takes his lunch money.
If SAP goes to the wall, their users can only hope that someone buys the source and continues to develop and support it. If not, they had better find another system, fast.
If one of the cited Open Source companies drops off, the source is freely available for anyone else to run with. Nothing need change unless the users wish it.
I think SAP might have missed the point as well.
Of course I can understand the SAP marketing man saying SAP is a "winner". That's his job! But he sounds as convincing as a central banker telling you that the turmoil is over and your savings are safe.
The truth is; history tells us that shake ups in the status quo occur when things go bad not when things are good. In the good times companies, with little costs pressures, go with the flow and follow the "norm" and let's not forget... people "don't get fired for buying IBM". Yeah they don't when times are good, but when things turn and there are real pressures on costs it's then the choice really matters and it's then that the "Status Quo" is questioned and challenged. Companies like SAP represent the status quo... Open Source is the challenge. And now when such decisions can literally mean life or death for a company I believe more companies will see the logic and choose Open Source.
And after all, if some of the biggest & most powerful financial organisations in the world can simply disappear overnight why not a software company? And when it does what happens to their client companies investment? And it's not just the monetary investment - let's not forget the time & effort their staff have expended becoming proficient in the use of the software? All that is lost too! With Open Source that possibility/risk simple does not exist!