Oracle mulls vote on open source at upcoming shareholders meeting

I’ve been chatting with Jonas Kron recently about an issue that Matt just pointed out:

On Friday, November 2, Oracle will convene its shareholder meeting. As part of that meeting, this year it’s supposed to consider an open-source friendly proposal which, for a variety of reasons, it is asking its shareholders to reject. (See page 55 of its proxy statement here.)

What is the proposal? That Oracle adopt a resolution that the company consider the social and environmental impact of using open source. The underlying intention, I believe, is to nudge Oracle to take on a more protective approach to open source. Oracle wants the resolution axed.

The language of the shareholder proposal is fairly vague, which may be one reason it’s not getting much love from Oracle. However, as Jonas Kron, the attorney representing Lawrence Fahn (Oracle shareholder), told me, SEC (Securities and Exchange Commission) rules significantly restrict what they can ask for in the proposal, forcing them to file a proposal that focused on social and environmental impacts – a very safe area within the SEC rules.

So, the proposal actually calls for this resolution:

RESOLVED: the shareholders request that the Board 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. We request the report be a policy level discussion which excludes proprietary and confidential information (including, for example, information that may interfere with litigation, legal strategies, lobbying or regulatory issues).

To my unstudied eye, this seems to not go far enough. But Kron indicated that the proposal is not meant to be a be-all/end-all for Oracle on open source. Rather, it’s intended to serve as a placeholder and an opportunity for Fahn/Kron to get the issue of open source on the Oracle board’s agenda rather than as a complete reflection of Fahn’s and Kron’s goals or interests. However, Kron noted that even despite this limitation to shareholder proposals this structure still enables him to use this mechanism to solicit real changes in corporate behavior through dialogue.

What could be accomplished with the proposal? It’s a way for Oracle’s shareholders to demonstrate support for Oracle’s open-source efforts (noted in Oracle’s opposition statement on page 55), and to vote to encourage them to go further.

As pointed out to me by Jonas, it’s not that Oracle is doing anything predatory to Open Source now, it’s that his client thinks they can and should do more. Unlike Matt, I’m not a lawyer. Jonas took the time to explain a lot of the procedure to me, and as indicated the request is more of a place holder then a complete request. You should see page 55 of the proxy statement for complete details. I’m not an Oracle shareholder, but if you are this is your chance to be heard. If you have any questions, let me know and I’d be happy to pass them on to Jonas. From what I’m told, a small number of votes here can make a very real difference. Here’s why (from Jonas):

Given the fact that Larry Ellison owns just shy of 25% of Oracle shares and mutual funds and other institutional investors who invariably will vote with management as a matter of practice own around 40%; a vote in favor of just 5% would actually be very meaningful because it means that 15% of shareholders who as a practical matter would actually think about how to vote, voted for the proposal. Put another way, if a single shareholder owning 15% (or even 5%) of the company asked management to pay attention to an issue, they likely would. In fact, under securities laws, 5% ownership is considered significant enough to warrant specific disclosures of information. The point being that this shareholder resolution presents a leverage point that can be used to communicate to management in a powerful way that its investors think Oracle should continue to take positive steps towards open source.

Edit: Here’s a good link if you’d like to learn more about shareholder activism.

–jeremy

Unbreakable Linux: The untold story

Mike Olson, vice president of Embedded Technologies at Oracle, recently posted an interesting entry on his blog about Unbreakable Linux (via Matt). The article details why RHEL was chosen and how Oracle contributes to Linux. Keep in mind that Mike works for Oracle, but via the Sleepycat aquisition. He knows Open Source. Now, I never found it odd that Oracle chose RHEL. I’d have found it odd if they chose anything else in fact. In the Oracle Linux space, Red Hat dominates. I did wonder why the respun CentOS though. It just doesn’t make a lot of sense to me. They’re directly competing with Red Hat with Red Hat’s own product. Sure the GPL allows that. I just don’t think it makes sense from a business perspective. Not when they could have partnered with Red Hat and gotten 95% the same thing. The 5% will make a real difference in the long run. As a major partner, they would have been providing real value to Red Hat. This in turn would encourage Red Hat to provide value to them. Early access to code, development road maps, etc. Enterprise customers would have gotten the proverbial one neck to choke (which the really do like) and Oracle would have been the single point of contact for Linux support on the RHEL product for their customers. The way they have it now, they will be in a perpetual state of playing catchup with new RHEL releases, with no help from Red Hat. In the end, what they wanted to do made a ton of sense… I just don’t think they went about it the best way. How it will play out long term remains to be seen.

–jeremy

Oracle Linux adopters labelled 'idiots'

Just ran across this odd story over at ZNNet AU. From the article:

One of the first converts to Oracle’s support for Linux has revealed the public backlash it has endured since their decision to drop Red Hat.

Melbourne company Opes Prime Stockbroking told ZDNet Australia that in the weeks following its announcement to adopt Oracle Linux, upset Linux enthusiasts phoned, e-mailed and wrote about the company online to complain at the decision.

“People called us out of the blue to tell us we were idiots,” said Opes executive director Anthony Blumberg.

He also fielded a call from an unhappy Red Hat Australia and New Zealand managing director Max McLaren.

I’m not familiar with Opes Prime Stockbroking and hadn’t seen any bashing going on, but I have trouble imaging why any Linux enthusiast would take the time to do something like that. If they did, it’s surely not indicative of the attitude of the larger Linux community. Looking at the history, the company seems like a prime target for the Oracle product anyway. First, they weren’t even a Red Hat customer. They had acquired the licenses through Dell, which means Dell provides the first level of support…not RHT. Second, the company has a very small number of servers, but is a heavy Oracle user (both database and application server). If this story is true, and isn’t the result of some misguided astroturfing, I hope it doesn’t end up reflecting poorly on the greater ecosystem. The level of professionalism I have seen recently in the Open Source realm is second to none. It’s a shame when a disingenuous few tarnish the hard earned reputation of most.

–jeremy

Open Source Business Models: A Wall Street Look at a Wild 2006 and the Prospects for Even More Fun in 2007

Stephen Walli points to a presentation from EclipseCon by Brent Williams entitled: “Open Source Business Models: A Wall Street Look at a Wild 2006 and the Prospects for Even More Fun in 2007”.  The presentation is fairly long at 48 slides, but contains some very good information.  You might not agree with all the specific details presented in the slide, but the end result comes together nicely.  His interface standard vs implementation standard explanation using a Lamborghini Murcielago vs. Hyundai Excel drives home the point nicely.  He also covers commoditization issues and the recent Oracle Linux foray, among others items, quite well.  Overall the presentation is definitely worth the read.  I wish I’d have been at EclipseCon to see it myself.

–jeremy

Ballmer repeats threats against Linux

Novell execs must cringe when they see things like this:
Steve Ballmer has reissued Microsoft's patent threat against Linux, warning open-source vendors that they must respect his company's intellectual property.
In a no-nonsense presentation to New York financial analysts last week, Microsoft's chief executive said the company's partnership with Novell, which it signed in November 2006, “demonstrated clearly the value of intellectual property, even in the open-source world.”
The cross-selling partnership means that Microsoft will recommend Suse Linux for customers who want a mixed Microsoft/open-source environment. It also involves a “patent co-operation agreement”, under which Microsoft and Novell agreed not to sue each other's customers for patent infringement.
In a clear threat against open-source users, Ballmer repeated his earlier assertions that open source “is not free”, referring to the possibility that Microsoft may sue Linux vendors. Microsoft has suggested that Linux software infringes some of its intellectual property, but has never named the patents in question.
Ballmer said: “I would not anticipate that we make a huge additional revenue stream from our Novell deal, but I do think it clearly establishes that open source is not free, and open source will have to respect the intellectual property rights of others just as any other competitor will.”

He almost makes it sound like the real value to Microsoft, and the real intention of the agreement, was simply to posture for further protection money from others. I wonder how Novell feels about that in retrospect. Matt Asay asks: “Steve Ballmer: Was this the friend Novell wanted?” I think the answer to that is now clear.
I still wonder if Microsoft realistically thinks they can sue. The amount of potential litigation that could get thrown back is substantial. Red Hat seems to be one of the more likely Microsoft targets, but don't forget that the likes of IBM depend on Linux sales for large chunks of consulting money. It's even more interesting now that Oracle is selling what is in essence a RHEL clone. At this point in the game, I wonder how effective this kind of FUD slinging really is anyway. A few of years ago, many people were fooled. These days, that's certainly changing. Ballmer, it would seem, is not changing with the times. It's unfortunate, as some parts of Microsoft seem to be be attempting to.
–jeremy

Interview: Jens Axboe

A fantastic in-depth interview with Jens Axboe has been posted over at KernelTrap. If you're interested in block layer stuff, schedulers or the kernel development process in general, this is a must read. If you don't learn something from each and every KernelTrap interview that Jeremy posts, you are either a serious kernel ninja or Linus.
–jeremy

MySQL AB – a new product and an IPO

Speaking of Open Source companies that understand their market and core strengths, MySQL AB has also been on a tear. Earlier this week, the company announced its MySQL Enterprise Unlimited program. From the press release:
MySQL AB, developer of the world's most popular open source database, today unveiled a simpler way for large and growing organizations to acquire and adopt enterprise software. Designed with a customer’s perspective in mind, a one-year MySQL Enterprise Unlimited subscription offers a company-wide enterprise site agreement at the unprecedented low price of $40,000 (EUR 32,000, GBP 24,000).
“MySQL Enterprise has made it significantly easier to purchase database software and technical support for our entire organization,” said Glenn Bergeron, systems manager for Instaclick Inc., one of the first companies to take advantage of MySQL Enterprise Unlimited. “This new offering is ideal for corporate IT organizations with a growing number of projects but a tightly-fixed budget.”
MySQL Enterprise Unlimited is designed for companies with existing site licenses for Oracle, Microsoft SQL Server, Sybase and IBM DB2. Last year, a survey of the Independent Oracle User Group showed that a full third of its membership also used MySQL1. With a MySQL Enterprise Unlimited subscription, an organization can develop, manage and fully support any number of MySQL database applications — significantly reducing IT time, cost and risk.
“Due in large part to advantages in distribution and volume, open source has the ability to disrupt traditional enterprise software pricing,” said Stephen O'Grady, principal analyst for RedMonk. “MySQL is attempting to prove as much with its latest site wide agreements, which offer customers the ability to support every database across their enterprise at a fraction of the traditional cost.”

Make no mistake about it, MySQL AB could have actually raised the price of their main product and still sold more. Instead they have chosen a plan which I think has a higher upside potential long term. Matt covers some of the reason the company is able to do this:
Zack told me over email (in response to my question, “How can you possibly make money at that price?):
The reason we can make money is because:
-The software really works
-And we don't have expensive Armani-wearing Ferrari-driving sales reps closing 40K deals.

Expanding on that is a post on Zack's blog. This isn't just about Oracle, it's about disrupting the industry. That's why this is a long term play. It's game changing. A lot of proprietary companies may have raised their rates as mentioned earlier, to boost the bottom line in the short term. It all looks very nice on the balance sheet. MySQL represents what I consider the future. Vibrant sustainable companies that treat their customers like partners and not like prey.
I see that the company is now looking at an IPO. As you may have guessed by my previous comments, I'll certainly try to get in on that. As you may have also guessed, I also regularly recommend and implement MySQL and run it on a site that gets a considerable amount of traffic.
–jeremy

Novell: Hubert Mantel Returns, Jeremy Allison Resigns

Quite a bit going on at Novell over the last couple days. We have Hubert Mantel returning and Jeremy Allison resigning. For those that don't remember, Hubert is one of the Suse founders and had resigned from Novell a little over a year ago, saying: “”Too late for me. I just decided to leave Suse/Novell, this is no longer the company I founded 13 years ago.” Jeremy, who is a core Samba guy, joined Novell a bit over a year ago and resigned over the recent Microsoft Patent agreement, saying:
I know you don't want to hear this, I know *nobody* wants to hear this but I'll not be able to live with this if I don't say it publicly at least once.
Whilst the Microsoft patent agreement is in place there is *nothing* we can do to fix community relations. And I really mean nothing.
We can pledge patents all we wish, we can talk to the press and “community leaders”, we can do all the right things w.r.t. all our other interactions, but we will still be known as GPL violators and that's the end of it.
For people who will point out to me we don't “technically” violate the GPLv2 here's an argument I recently made on the mailing lists.
“Do you think that if we'd have found what we legally considered a clever way around the Microsoft EULA so we didn't have to pay for Microsoft licenses and had decided to ship, oh let's say, “Exchange Server” under this “legal hack” that Microsoft would be silent about it – or we should act aggr[i]eved when they change the EULA to stop us doing this?”
The Microsoft patent agreement has put us outside the community, and there is no positive aspect to that fact, and no way to make it so. Until the patent provision is revoked, we are pariahs.

When asked about that deal, Mantel said:
6. What do you think about the Microsoft/Novell deal?
I think it is a good thing especially for the users. If you think some years back, Linux was not taken seriously. Now even Microsoft acknowledges that it exists and will not go away. I understand that many people don't like it as Novell is collaborating with the “evil empire”. But I don't like this way of thinking; we are not working against somebody, but we are working FOR Linux. Fundamentalism always leads to pain. What's important is that Linux is free and will remain to be free. The source code is open to everybody, this is what counts for me. Some people seem to be torn in an interesting way: On one hand they want “world domination”, at the same time they don't like the feeling that Linux has grown up and needs to deal with the real business world out there. We have a saying here in Germany that goes along the lines of “wash me, but do not make me wet”. If you want Linux to succeed, you cannot live in your own separate universe.

One thing is clear, a rift is definitely forming on this issue. Was that one of the goals of the agreement from the Microsoft side? Some are speculating that, but I'm still unsure what the motives were. It took Jeremy about 30 seconds to find a job as he seems to have landed at Google. Regardless of what you think of the patent agreement, you have to applaud Jeremy for sticking up for what he believes in. He put his money where his mouth is and gave up a job he clearly enjoyed because of it. You have to respect that kind of conviction. It will be interesting to see what direction Novell heads in over the next 6 months or so. Meanwhile RHT seems completely unaffected by this or the recent Oracle news. Today they beat analysts expectations handily and the stock jumped over 25%.
–jeremy
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Oracle questions GPL open sourced Java

It appears that Oracle is siding with IBM on the issue of the Open Source license for Java. From the article:
Steven Harris told Computer Business Review he believed the release of the Java code as open source would be beneficial, but questioned whether the Santa Clara, California-based company would have been better advised to have released it under an Apache license.
“It's a good thing that they're open sourcing it, and it opens up access to people who previously considered there were barriers to it,” he said, while noting that “those barriers were pretty low” in the first place.
However, he also repeated comments made by IBM Corp that the choice of the GNU GPL made the project incompatible with existing projects under the Apache and Eclipse initiatives.
“The most active Java communities are Apache and Eclipse. It is unfortunate that they did not provide a path that would allow these projects to grow,” said Harris. “The community is in Apache and Eclipse. Sun's choice creates a new community.”

Sun responded:
Speaking to Computer Business Review earlier this month Sun's chief open source officer, Simon Phipps, explained that using the GPL would overcome fears about license compatibility with Linux. “We've been working on the Java platform for a considerable time and we've got to the point where we're considering 'how do we grow the market',” he said.
“The most important thing is that that the Java platform is not included in many GNU Linux distributions.” Choosing the GPL, which is already used for Linux, avoids that issue, he explained. “Java now becomes the development platform of choice for enterprise GNU Linux users.”

I think this example is an indication of part of the problem some have with license proliferation (and note that these are two of the most popular Open Source licenses). Sun is basically in a position that it has to choose between Linux compatibility and Eclipse/Apache compatibility, or license Java under a myriad of licenses (which is really not an optimal situation). Someone is likely going to lose here, which is a shame since we're on the same team and have the same goals. Unfortunately I don't have an answer to the problem. Fortunately, people much smarter than me are working on it ;)
–jeremy
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Oracle Linux, Distributions, Redux

It's interesting to read what a well known and well respected MySQL Employee has to say, not only about Oracle Linux specifically but about the state of Linux distributions in general. A couple snippets:
First, I'm really unhappy with the state of Linux distributions today. Its a tower of babel for the most part. Its a hope that the LSB will solve some of this, but today shipping on Linux is a real mess. Upgrading is a mess, especially for applications developed to rely on a stable platform.
Redhat ES is still the 800lb gorilla. Problem is that its too expensive when you get thousands of servers (or even a hundred). There was a day and an age where libc problems kept rearing their heads but that seems to be mostly over. I'm not going to pay what they want me to pay. They don't present me with a value proposition that I like. I used to buy one copy of it each time it was released to keep my servers upgraded, but I stopped that after RH9.
I'd like to see a winning Linux distribution, but right now the race is wide open as far as I am concerned. Fedora could improve on upgrades to the point where I was happy with it. Oracle could innovate and create a platform that ISVs would consider stable. Ubuntu could get a major win and we see sites move to it. Redhat could realize that they have created profit by creating a ceiling for adoption and find a new way to profit (since that ceiling is only going to drop…).

I agree with much of what he has to say. I've posted multiple times on what I think about RHEL pricing, so I won't get into that again. I've had considerably better luck than Brian with Debian it would seem and I would _never_ recommend you run Fedora on a production server (ever). I've also been meaning to take a closer look at rPath, and when I get a chance to I'll post an update. The fact that a MySQL employee is so openly willing to try a Linux distribution from a substantial competitor (I know, MySQL AB officially claims they are not competing with Oracle… I obviously disagree ;) really says a lot about the mentality of the average Open Source enthusiast. It's not just about squashing your competitors and creating your own silo, it's about technology, innovation, tinkering and curiosity. It's about creating genuine value and breaking down barriers, not holding clients captive and creating artificial barriers.
–jeremy
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