Open-source advocates have lashed out at SAP after a senior executive's "bold and ill-informed" criticisms.

Shai Agassi, SAP's head of product development and technology, said open source represents a kind of "IP socialism" that kills innovation. Agassi later downplayed the comments, saying they had been reported out of context.

Agassi - the first non-German member of SAP's Executive Board, and a prodigy said to have programmed his first computer at the age of seven - made the remarks at a talk last week at the Churchill Club in Sunnyvale, California, moderated by The New York Times' John Markoff. The interview appeared in several press reports, and an audio file of the talk was distributed by CNet Networks.

Agassi said SAP approves of some aspects of open source, such as the ability to tap into the work of many developers and the ability of users to view source code.

But he heavily criticised the "rebel", "IP (intellectual property) should be free" aspect of the open source movement. "IP socialism is the worst that can happen to any IP-based society, and we are an IP-based society," he said.

Agassi attempted to lighten the mood by joking about his attempt to install a Linux desktop, but his discussion characterised open source as fundamentally opposed to intellectual property protection. He argued that innovation only happens when it can allow private companies to profit.

"If there is no way to defend IP, there is no reason to invest in IP. If there is no reason to invest in IP, we don't get focused efforts going in any direction at all," he said. "If you look at what is the most innovative desktop today, if you look at what Vista is copying, they're copying Aqua." Aqua is the user interface of Apple's Mac OS X operating system.

"Innovation happens when you come in and say, (like Steve) Jobs, 'Forget about all these vectors, we're going to pick this vector and go in that direction, and why? because I said so,' " said Agassi. "That is only protected by protection of IP. There are areas where you commoditise, but at the areas of innovation, at the frontiers, you have to have IP protection."

Some industry observers said Agassi's argument was extreme, pointing to counter-examples such as HTML and TCP/IP, which don't incur licence fees.

Dave Rosenberg, principal analyst with the Open Source Development Labs (OSDL), said the remarks amounted to "talking smack" about open source. "SAP's Shai Agassi was at the Churchill Club making very bold and ill-informed statements about open source," he said in a weblog post.

Rosenberg said SAP's remarks aren't far from the previous attempts by Microsoft executives to turn businesses against open-source, calling the development model a "cancer" that is "un-American".

"SAP could have taken the high road and embraced open source products. Instead, Agassi calls it 'IP socialism'," Rosenberg wrote. "I find this extremely disappointing. Agassi was one of my fave tech execs and now I think he's a fool."

In a weblog post called "I love open source - really!", Agassi attempted to answer his critics, saying that his remarks had been reported out of context and that "zealots" were picking a fight with SAP over nothing.

However, critics said the debate over open source and IP hasn't come out of nowhere. SAP was one of the most vocal backers of a recent, failed directive which would have liberalised the EU's software patents system, something heavily opposed by SMEs and open-source developers.

Florian Mueller, one of Europe's main campaigners against the directive, said Agassi's comments linking open source and "IP socialism" were an offensive distortion. "The vast majority of us who fight against software patents are not socialists. We actually had to defend the free market and our own intellectual property against the lobbyists of SAP and others," Mueller said.

"We want a competitive market under the rule of copyright law, while SAP wants to erect artificial barriers to entry, based on an (intellectual property rights) regime in which might makes right," he said.

SAP has recently begun aligning itself ever more closely with Microsoft in its European lobbying efforts. During the software patents battle SAP and Microsoft helped to form a lobbying group in favour of the directive, called the Campaign for Creativity. More recently, both companies helped found a new group called the European Software Association (ESA), which claims to represent the interests of European software makers.

The group is likely to be intended to put SAP's point of view on software patents and open-source across to the public and to lawmakers, according to Mueller.

"Given the membership of that organisation, open-source policy definitely means anti-FOSS (free/open source software) FUD, just like the ACT and CompTIA, two 'industry associations' that are Microsoft-controlled," said Mueller.

"They're going to tell politicians just the kind of stuff that Shai Agassi said, in order to try to prevent public administrations from migrating to FOSS solutions and from promoting FOSS development in Europe."

In the same talk, Agassi gave an analysis of Oracle and its tactics, referring to the company as "pirates". He said the Oracle's ambitious Project Fusion was unlikely to succeed, saying the idea of rewriting Oracle's software was "suicidal".

Oracle has responded that Fusion wouldn't be written entirely from scratch, and while the project is ambitious, it has been carefully planned.