Is it time for SAP to try open source?

Although it posted strong earnings, the German enterprise software maker is looking to cut costs amid tough economy. Adopting an open-source model could help.

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.

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About the author

    Matt Asay is chief operating officer at Canonical, the company behind the Ubuntu Linux operating system. Prior to Canonical, Matt was general manager of the Americas division and vice president of business development at Alfresco, an open-source applications company. Matt brings a decade of in-the-trenches open-source business and legal experience to The Open Road, with an emphasis on emerging open-source business strategies and opportunities. He is a member of the CNET Blog Network and is not an employee of CNET. You can follow Matt on Twitter @mjasay.

     

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