Despite strong earnings, SAP recently announced that it would cut 6.7 percent of its workforce, or 3,000 positions, according to CNET. While the company reported an 8 percent increase in year-over-year revenue, SAP sees a stalling economy blocking the road before it.
Why not give open source a try?
SAP has invested in a wide range of open-source companies, including MySQL, Red Hat, Alfresco (my company), JasperSoft, and others, but it has never ventured far into actual open-source development and distribution, its MaxDB work with MySQL and its contribution to Eclipse serving as the exceptions that prove the rule.
A few years ago, SAP went so far as to downplay open source's significance at the Open Source Business Conference in a keynote, talking up the need for everyone to jump on the SAP bandwagon and forget the open-source toy.
SAP could arguably use that "toy" right now. Forget source code: SAP needs a more efficient way to get its software in the hands of prospective buyers. Especially in a tight economy, it can't afford to hire an expensive sales force to pan for customer gold.
Its open-source competitors in software for enterprise resource planning may have a ways to go before offering stiff competition to the Germany-based giant, but CIO.com proclaims 2009 as the year of open-source ERP. SAP must be hoping that it's not right.
Adopting open source is not a matter of giving away source code for the love and praise of "community." It's a hard-headed capitalist tool for improving software quality and software distribution. SAP could use both, but especially the latter in this market.
So here's a challenge to SAP: by all means, keep investing in open-source companies, but please also start to invest in SAP as an open-source company. You might find that doing so is just the tonic required to boost sales.
While open source has made its mark in just about every product segment within enterprise software, ERP (enterprise resource planning) has remained firmly proprietary. As CIO.com's Thomas Wailgum suggests, however, the time may be ripe for change.
The reason? Years of empty promises and overloaded invoices from the incumbent ERP vendors may finally ring hollow in a global recession:
Does a massive, 18-month, multimillion-dollar ERP rollout, with the odds of implementation and user acceptance stacked against you and 22 percent annual maintenance costs to boot, seem appropriate now?
ERP industry guru Vinnie Mirchandani likes to say that there are too many "empty calories" in ERP spend, especially in SAP and Oracle maintenance fees. Now is clearly not the time to be ordering up large portions of highly caloric ERP software rollouts.
Just as the economy is proving to be Google's toughest competitor and the biggest reason to innovate, so, too, may the economy be chief information officers' biggest reason to get out of the "no one ever got fired for spending way too much on bloated ERP" mindset and shift spending to software as a service and open-source ERP.
Openbravo, Compiere, and other open-source solutions have been around for several years, and they are surprisingly robust and feature-rich. 2009, with all its financial challenges, may well be the opportune time for CIOs to kick the tires on these alternative solutions.
Disclosure: I am an advisor to Openbravo, an open-source ERP vendor.
OpenMFG just took one step forward, and two steps backward. First, the positive. The company, which provides ERP and CRM solutions for small to medium-sized enterprises, has rebranded itself as xTuple. It has also developed PostBooks, a QuickBooks competitor.
Good stuff. We need more software like this. What we don't need, however, is xTuple's flawed licensing scheme that feints at open source, but falls far short.
xTuple's license is a mess, on two primary accounts:
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