I know Shai Agassi. Shai is very, very smart. He's also a technologist, and understand with a lot more depth than people may think what the Open Source community is doing. So what was Shai thinking when he said that if SAP's software did go Open Source, SAP would no longer have an incentive to innovate. From the article:
"Intellectual property [IP] socialism is the worst that can happen to any IP-based society," he said. "And we are an IP-based society. If there is no way to protect IP, there is no reason to invest in IP."
Ah ha! So here we begin to see the confusion. First, Shai represents a company that is dependent on a traditional business model that I claim is dying - Enterprise software. The traditional Enterprise software business model depends on customers needing to be sold. i.e. traditional Enterprise software is sold, not bought. That's a model that is facing an uphill battle in today's market. Customers are willing to buy Open Source software, and are tired of being sold. According to the September 19, 2005 Software Scoop newsletter from Goldman-Sachs, Enterprise software companies will spend 82% of new license revenues on sales & marketing in 2005. That's up from 66% in 2000.
On the other hand, Open Source companies like JBoss, SugarCRM, and Pentaho don't charge up-front license fees in part because they don't need to spend the huge sales and marketing costs that the traditional Enterprise software vendors need to spend. Because their software is available Open Source, customers can pilot, experiment and test before they buy. What then they pay for is ongoing maintenance and support of that software; essentially the part of the Enterprise software business that today is profitable. It's a more efficient model, and Enterprise software dinosaurs are going to learn that lesson the hard way.
Now let's turn back to the fallacy that Open Source is anti-intellectual property. I've been fighting this one for as long as I can remember. Strong IP rights are an important foundation of Open Source. Why do you think all of the major Open Source projects have well-defined processes for obtaining copyright assignment or sublicensing permission from contributors? Without strong IP-rights, Open Source licenses, in particular the GPL, would have no teeth.
So IP rights are an important foundation for Open Source. Let's turn to the business implications of that. The GPL is an important business weapon for software companies interested in protecting their IP. Why? Because it limits what a company's competitors can do with that software. That's right, the GPL put's limits on their freedom to use the released software. For example, reciprocity requires that a competitor using GPL'd software release derivatives works under the GPL. Only the original copyright owner has the right to release the software under other licenses, and potentially combine it with commercially licensed works.
No, the GPL is far from "IP-socialism". It is, in fact, one of the Open Source capitalist's best weapons. The GPL is a great way to protect IP, and one that encourages innovation.