The strange entry of OSS into the investor-activist world - Open Source Software Up the Stack

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October 16, 2007
The strange entry of OSS into the investor-activist world

There is an open-source-software (OSS)-related “corporate/social responsibility” initiative at the November Oracle shareholders’ meeting and the Open Source Initiative (OSI) may weigh in on its merits. A pair of experienced corporate/social responsibility advocates has put a proposal on the Oracle proxy that requires the Oracle board to “issue, at reasonable expense, an Open Source Social Responsibility Report to shareholders by April 2008 that discusses the social and environmental impacts of Oracle’s existing and potential open source policies and practices.” The OSI board of directors may debate whether to take a pro or con or “beyond our remit” vote on the issue at its next board meeting on November 7. The Oracle shareholder meeting is on November 2 so any OSI debate would apparently be only for intellectual purposes, but would likely affect future proxy initiatives.

When I first saw fellow bloggers posting on this a few weeks ago, it went right past me like a Rafael Betancourt fast ball past Kevin Youkilis after 10 foul balls. Then I read it and said, “Why OSS?” And “Why Oracle?” And “Why Now?”

The sponsors kindly answered my questions even knowing my opposition to their idea. They indicated that proxy-question procedure is partially responsible for the wording of the proposal vis a vis OSS saving the world. SEC regulations forbid ballot questions that simply ask shareholders to vote on company operational aspects. For example, they could not ask investors to vote to have Oracle adopt OSS as its driving technology principle, although that is what they would like to see happen at Oracle and in other corporations. So, instead, their proposal asks for a report on how OSS contributes to Oracle’s social responsibility.

As for Oracle and timing, the reason is that the sponsors are experienced activist-investor advocates who are very busy in the winter and spring leading up to most corporation’s annual meetings. Because Oracle proxies in the fall, it was easier for them to approach Oracle on what they acknowledge is a personal pursuit. In the spring, they are too busy with other corporate-responsibility initiatives.

Still the effort makes the OSS community look bad, even though I can find no OSS-related organization involved. The proxy question has factual errors and confuses OSS with the standards movement. It uses IDC numbers that I have discussed in the past to point out how OSS is an infinitesimally small part of the overall software market (and actually an overlapping orthogonal software-market ecosystem anyways). Not surprisingly then, despite the proxy wording, OSS is not an important part of Oracle’s business either (and of course, Red Hat devotees would argue that Oracle is just barely better than Microsoft when it comes to OSS bonafides). In addition to real stretches such as OSS having environmental benefits and being in a position to save the “third world” (is there a third world anymore?), the question says OSS can contribute to transparency in government institutions (of course, as indicated in multiple places, some large IT suppliers tried to use OSS to decrease transparency here in Massachusetts state government).

I hope the OSI does consider the proposal if only for intellectual purposes and I urge the OSI directors to vote “no,” not because proxy questions are not part of its charter but because this particular proxy question does the OSS movement a disservice.