Open source will fail to deliver innovation and is more likely to break applications, according to Shai Agassi, president of the product and technology group at SAP.

"We all talk about how great Linux is," he said at a speaking engagement at the Churchill Club in Silicon Valley. 

"But if you look at the most innovative desktop today, Microsoft's Vista is not copying Linux, it is copying Apple."

Agassi likened open source to the early days of enterprise applications, when organisations went into the software and created many customisations and changes.

When an upgrade was released, those changes would prevent users from switching to the new version because it would break the software. "Open source is great for debugging, but it's crucial not to touch [the code]," said Agassi.

SAP is a supporter of open standards and of building innovation on top of a platform, but wants to limit the openness to added services.

The core SAP application will remain closed, but allow outside developers to interact with it through open standards. If SAP's software did go open source, Agassi claimed that the company would no longer have an incentive to innovate.

"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."

Many investors are betting that open source enterprise applications are the 'next big thing'. They are investing in start-up companies developing commercial open source enterprise applications such as SugarCRM and CentraView. 

Agassi also lashed out at Oracle, its main competitor in the market for enterprise applications, which has acquired PeopleSoft, Retek and Siebel Systems in the past year.

"There are pirates in the market," Agassi said in a reference to Oracle. " There is a big pirate ship that goes around. But we are sailing faster."