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Sarbanes-Oxley Act and Open Source Software

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The Sarbanes-Oxley Act (SOX) of 2002 is a
legislative attempt at raising the standards of ethics by which corporations
are governed. With today’s ever increasing reliance of companies on Information
Technology, it is no surprise that SOX also impacts IT. For more information
about this impact, look for instance at the Information Technology Controls page at the Wikipedia. The
whole issue can be summarized by quoting the Public Company Accounting
Oversight Board (PCAOB): "The nature and characteristics of a company’s
use of information technology in its information system affect the company’s
internal control over financial reporting." 

It is in this context, where transparency
at all operational levels is of the highest importance, that a fundamental
question has to be asked by all CEOs and CIOs: Is the corporate software
infrastructure transparent enough to be up to the standards set by SOX?

The issue is particularly sensitive when
such software infrastructure relies upon components and applications provided
by third parties, especially when such third-party pieces are covered by
ordinary licensing arrangements that impede full disclosure of the underlying
mechanisms (source code, data structures and algorithms) which
are the building blocks of these third-party pieces.

While the fundamental issue for SOX is
that of corporate ethics, when we are looking at the related IT issue, many
interesting considerations can be formulated by looking at the differences
between “proprietary” software and “free” software. (Note: here “free
is to be interpreted as in “free speech,” not as in “free beer.
In other words it has to do with the fundamental constitutional rights of
expression, not with costs or lack thereof.)

The freedom, to which free software
proponents refer to, has a direct correspondence with the need of transparency
required by SOX. It is our claim that Free Software allows
for a higher degree of transparency than Proprietary Software, and therefore
Free Software will allow corporations to comply to SOX more easily. 

A
Thought Experiment

It is interesting to note that in the
same year that SOX was introduced, Peruvian Congressman Dr. Edgar David
Villanueva Nuñez had a most revealing exchange of correspondence with Microsoft
General Manager Señor Juan Alberto González regarding Peru’s government Bill (English
translation
) requiring the use of free software by the state.

In order to make an argument why Free
Software is beneficial for SOX compliance, we will make a thought experiment. In
the following sections we will paraphrase Dr. Edgar David Villanueva Nuñez’s response
(English
translation
) to Microsoft’s letter,
with the intention of transposing all arguments he made for the state and the
public interest with the need for transparency required by SOX for the Public
Corporation and the Shareholders’ interest.

A Fictitious Letter from
an Illuminated CEO to Microsoft

Dear Sir:

First of all, I thank you for your letter
in which you state your official position relative to our Recommendation of
using Free Software in our Corporate Administration, which is indubitably
inspired by the desire for our Corporation to find a suitable place in the
global technological context. In the same spirit, and convinced that we will
find the best solutions through an exchange of clear and open ideas, I will
take this opportunity to reply to the commentaries included in your letter.

While acknowledging that opinions such as
yours constitute a significant contribution, it would have been even more
worthwhile for me if, rather than formulating objections of a general nature
(which we will analyze in detail later) you had gathered solid arguments for
the advantages that proprietary software could bring to the Pubic Corporation,
and to its Shareholders in general, since this would have allowed a more
enlightening exchange in respect of each of our positions.

With the aim of creating an orderly
debate, we will assume that what you call “open source software” is what our
recommendation defines as “free software,” since there exists software for
which the source code is distributed together with the program, but which does
not fall within the definition established by our Recommendation ; and that
what you call “commercial software” is what the our Recommendation defines as
“proprietary,” given that there exists free software which is sold in the
market for a price like any other good or service.

It is also necessary to make it clear
that the aim of the recommendation we are discussing is not directly related to
the amount of direct savings that can by made by using free software in the
corporation. That is in any case a marginal aggregate value, but in no way is
it the chief focus of the Recommendation. The basic principles which inspire
the Recommendation are linked to the basic guarantees of a Public Corporation
of transparency, such as:

  • Free access to corporate information by the Shareholder.
  • Permanence of corporate data.
  • Security of the Corporation and Shareholders.

To guarantee the free access of
Shareholders to corporate information, it is indispensable that the encoding of
data is not tied to a single provider. The use of standard and open formats
gives a guarantee of this free access, if necessary through the creation of
compatible free software.

To guarantee the permanence of public
data, it is necessary that the usability and maintenance of the software does
not depend on the goodwill of the suppliers, or on the monopoly conditions
imposed by them. For this reason the Corporation needs systems the development
of which can be guaranteed due to the availability of the source code.

To guarantee corporate security or the
security of the Shareholders, it is indispensable to be able to rely on systems
without elements which allow control from a distance or the undesired
transmission of information to third parties. Systems with source code freely
accessible to the public are required to allow their inspection by the
Corporation itself, by the Shareholders, and by a large number of independent
experts throughout the world. Our proposal brings further security, since the
knowledge of the source code will eliminate the growing number of programs with
spy code.

In the same way, our proposal strengthens
the security of the Shareholders, both in their role as legitimate owners of
information managed by the Corporation, and in their role as consumers. In this
second case, by allowing the growth of a widespread availability of free
software not containing spy code able to put at risk privacy and
individual freedoms.

In this sense, the Recommendation is
limited to establishing the conditions under which the Corporation will obtain
software in the future, that is, in a way compatible with these basic
principles.

From reading the Recommendation it will
be clear that once approved:

  • the Recommendation does not forbid the production of
    proprietary software
  • the Recommendation does not forbid the sale of
    proprietary software
  • the Recommendation does not specify which concrete
    software to use
  • the Recommendation does not dictate the supplier from
    whom software will be bought
  • the Recommendation does not limit the terms under which
    a software product can be licensed.

What the Recommendation does express
clearly, is that, for software to be acceptable for the Corporation it is not
enough that it is technically capable of fulfilling a task, but that further
the contractual conditions must satisfy a series of requirements regarding the
license, without which the Corporation cannot guarantee the Shareholders
adequate processing of his data, watching over its integrity, confidentiality,
and accessibility throughout time, as these are very critical aspects for its
normal functioning.

We agree that information and
communication technology have a significant impact on the quality of life of
the Shareholders (whether it is positive or negative). We surely also agree
that the basic values I have pointed out above are fundamental in a public
Corporation like ours. So we are very interested to know of any other way of
guaranteeing these principles, other than through the use of free software in
the terms defined by the Recommendation.

As for the observations you have made, we
will now go on to analyze them in detail:

Firstly, you point out that: “1. The
Recommendation makes it compulsory for the Corporation to use only free
software, that is to say open source software, which breaches the principles of
equality before the law, that of non-discrimination and the right of free
private enterprise, freedom of industry and of contract, protected by the
constitution.

This understanding is in error. The
Recommendation in no way affects the rights you list; it limits itself entirely
to establishing conditions for the use of software on the part of Corporation,
without in any way meddling in private sector transactions. It is a well
established principle that the public Corporation does not enjoy the wide
spectrum of freedom of private companies, as it is limited in its actions
precisely by the requirement for transparency of public acts; and in this
sense, the preservation of the greater Shareholder interest must prevail when
deciding on the matter.

The Recommendation protects equality
under the law, since no natural or legal person is excluded from the right of
offering these goods to the Corporation under the conditions defined in the
Recommendation and without more limitations than those established.

The Recommendation does not introduce any
discrimination whatever, since it only establishes how the goods have to
be provided (which is a Corporation power) and not who has to provide
them (which would effectively be discriminatory, if restrictions based on
national origin, race religion, ideology, sexual preference etc. were imposed).
On the contrary, the Recommendation is decidedly anti-discriminatory. This is
so because by defining with no room for doubt the conditions for the provision
of software, it prevents the Corporation from using software which has a
license including discriminatory conditions.

It should be obvious from the preceding
two paragraphs that the Recommendation does not harm free private enterprise,
since the latter can always choose under what conditions it will produce
software; some of these will be acceptable to the Corporation, and others will
not be since they contradict the guarantee of the basic principles listed
above. This free initiative is of course compatible with the freedom of
industry and freedom of contract (in the limited form in which the public
Corporation can exercise the latter). Any private subject can produce software
under the conditions which the Corporation requires, or can refrain from doing
so. Nobody is forced to adopt a model of production, but if they wish to
provide software to the Corporation, they must provide the mechanisms which
guarantee the basic principles, and which are those described in the
Recommendation.

By way of an example: nothing in the text
of the Recommendation would prevent your company offering the Corporation
bodies an office "suite", under the conditions defined in the
Recommendation and setting the price that you consider satisfactory. If you did
not, it would not be due to restrictions imposed by the Recommendation, but to
business decisions relative to the method of commercializing your products,
decisions with which the Corporation is not involved.

To continue; you note that: “2. The
Recommendation, by making the use of open source software compulsory, would establish
discriminatory and non competitive practices in the contracting and
purchasing...”

This statement is just a reiteration of
the previous one, and so the response can be found above. However, let us
concern ourselves for a moment with your comment regarding “non-competitive
practices.

Of course, in defining any kind of
purchase, the buyer sets conditions which relate to the proposed use of the
good or service. From the start, this excludes certain manufacturers from the
possibility of competing, but does not exclude them “a priori,” but rather
based on a series of principles determined by the autonomous will of the
purchaser, and so the process takes place in conformance with the law. And in
the Recommendation it is established that no one is excluded from
competing as far as he guarantees the fulfillment of the basic principles.

Furthermore, the Recommendation stimulates
competition, since it tends to generate a supply of software with better
conditions of usability, and to better existing work, in a model of continuous
improvement.

On the other hand, the central aspect of
competition is the chance to provide better choices to the consumer. Now, it is
impossible to ignore the fact that marketing does not play a neutral role when
the product is offered on the market (since accepting the opposite would lead
one to suppose that firms’ expenses in marketing lack any sense), and that
therefore a significant expense under this heading can influence the decisions
of the purchaser. This influence of marketing is in large measure reduced by
the Recommendation that we are backing, since the choice within the framework
proposed is based on the technical merits of the product and not on the
effort put into commercialization by the producer; in this sense, competitiveness
is increased, since the smallest software producer can compete on equal terms
with the most powerful corporations.

It is necessary to stress that there is
no position more anti-competitive than that of the big software producers,
which frequently abuse their dominant position, since in innumerable cases they
propose as a solution to problems raised by users: “update your software to the
new version” (at the user’s expense, naturally); furthermore, it is common to
find arbitrary cessation of technical help for products, which, in the
provider’s judgment alone, are “old;” and so, to receive any kind of technical
assistance, the user finds himself forced to migrate to new versions (with
non-trivial costs, especially as changes in hardware platform are often
involved). And as the whole infrastructure is based on proprietary data
formats, the user stays “trapped” in the need to continue using products from
the same supplier, or to make the huge effort to change to another environment
(probably also proprietary).

You add: “3. So, by compelling the
Corporation to favor a business model based entirely on open source, the
Recommendation would only discourage the local and international manufacturing
companies, which are the ones which really undertake important expenditures,
create a significant number of direct and indirect jobs, as well as
contributing to the GNP, as opposed to a model of open source software which
tends to have an ever weaker economic impact, since it mainly creates jobs in
the service sector.”

I do not agree with your statement.
Partly because of what you yourself point out in paragraph 6 of your letter,
regarding the relative weight of services in the context of software use. This
contradiction alone would invalidate your position. The service model, adopted
by a large number of companies in the software industry, is much larger in
economic terms, and with a tendency to increase, than the licensing of
programs.

On the other hand, the private sector of
the economy has the widest possible freedom to choose the economic model which
best suits its interests, even if this freedom of choice is often obscured
subliminally by the disproportionate expenditure on marketing by the producers
of proprietary software.

In addition, a reading of your opinion would
lead to the conclusion that the corporate market is crucial and essential for
the proprietary software industry, to such a point that the choice made by the
Corporation in this Recommendation would completely eliminate the market for
these firms. If that is true, we can deduce that the Corporation must be
subsidizing the proprietary software industry. In the unlikely event that this
were true, the Corporation would have the right to apply the subsidies in the
area it considered of greatest Shareholder value; it is undeniable, in this
improbable hypothesis, that if the Corporation decided to subsidize software,
it would have to do so choosing the free over the proprietary, considering its
social effect and the rational use of Shareholders’ money.

In respect of the jobs generated by
proprietary software in Corporations like ours, these mainly concern technical
tasks of little aggregate value; at the local level, the technicians who
provide support for proprietary software produced by transnational companies do
not have the possibility of fixing bugs, not necessarily for lack of technical
capability or of talent, but because they do not have access to the source code
to fix it. With free software one creates more technically qualified employment
and a framework of free competence where success is only tied to the ability to
offer good technical support and quality of service, one stimulates the market,
and one increases the shared fund of knowledge, opening up alternatives to
generate services of greater total value and a higher quality level, to the
benefit of all involved: producers, service organizations, and consumers.

It is a common phenomenon in developing
businesses that local software departments have the majority of their takings
in the service sector, or in the creation of “ad hoc” software. Therefore, any
negative impact that the application of the Recommendation might have in this
sector will be more than compensated by a growth in demand for services (as
long as these are carried out to high quality standards). If the transnational
software companies decide not to compete under these new rules of the game, it
is likely that they will undergo some decrease in takings in terms of payment
for licenses; however, considering that these firms continue to allege that
much of the software used by the Corporation has been illegally copied, one can
see that the impact will not be very serious. Certainly, in any case their
fortune will be determined by market laws, changes in which cannot be avoided;
many firms traditionally associated with proprietary software have already set
out on the road (supported by copious expense) of providing services associated
with free software, which shows that the models are not mutually exclusive.

With this Recommendation the Corporation
is deciding that it needs to preserve certain fundamental values. And it is
deciding this based on its autonomous power. If these values could be
guaranteed without having to choose a particular economic model, the effects of
the Recommendation would be even more beneficial. In any case, it should be
clear that the Corporation does not choose an economic model; if it happens
that there only exists one economic model capable of providing software which
provides the basic guarantee of these principles, this is because of historical
circumstances, not because of an arbitrary choice of a given model.

Your letter continues: “4. The
Recommendation imposes the use of open source software without considering the
dangers that this can bring from the point of view of security, guarantee, and
possible violation of the intellectual property rights of third parties.”

Alluding in an abstract way to “the
dangers this can bring,” without specifically mentioning a single one of these
supposed dangers, shows at the least some lack of knowledge of the topic. So,
allow me to enlighten you on these points.

On security:

Corporate security has already been
mentioned in general terms in the initial discussion of the basic principles of
the Recommendation. In more specific terms, relative to the security of the
software itself, it is well known that all software (whether proprietary or
free) contains errors or “bugs” (in programmers’ slang). But it is also well
known that the bugs in free software are fewer, and are fixed much more
quickly, than in proprietary software. It is not in vain that numerous public
bodies responsible for the IT security of systems in developed countries
require the use of free software for the same conditions of security and
efficiency.

What is impossible to prove is that
proprietary software is more secure than free, without the public and open
inspection of the scientific community and users in general. This demonstration
is impossible because the model of proprietary software itself prevents this analysis,
so that any guarantee of security is based only on promises of good intentions
(biased, by any reckoning) made by the producer itself, or its contractors.

It should be remembered that in many
cases, the licensing conditions include Non-Disclosure clauses which prevent
the user from publicly revealing security flaws found in the licensed
proprietary product.

In respect of the guarantee:

As you know perfectly well, or could find
out by reading the “End User License Agreement” of the products you license, in
the great majority of cases the guarantees are limited to replacement of the
storage medium in case of defects, but in no case is compensation given for
direct or indirect damages, loss of profits, etc... If as a result of a
security bug in one of your products, not fixed in time by yourselves, an
attacker managed to compromise crucial Corporation systems, what guarantees,
reparations and compensation would your company make in accordance with your
licensing conditions? The guarantees of proprietary software, inasmuch as
programs are delivered “AS IS,” that is, in the state in which they are,
with no additional responsibility of the provider in respect of function, in no
way differ from those normal with free software.

On Intellectual Property:

Questions of intellectual property fall
outside the scope of this Recommendation, since they are covered by specific
other laws. The model of free software in no way implies ignorance of these
laws, and in fact the great majority of free software is covered by copyright.
In reality, the inclusion of this question in your observations shows your
confusion in respect of the legal framework in which free software is
developed. The inclusion of the intellectual property of others in works
claimed as one’s own is not a practice that has been noted in the free software
community; whereas, unfortunately, it has been in the area of proprietary
software. As an example, the condemnation by the Commercial Court of Nanterre,
France, on 27th September 2001 of Microsoft Corp. to a penalty of 3 million
francs in damages and interest, for violation of intellectual property (piracy,
to use the unfortunate term that your firm commonly uses in its publicity).

You go on to say that: “The
Recommendation uses the concept of open source software incorrectly, since it
does not necessarily imply that the software is free or of zero cost, and so
arrives at mistaken conclusions regarding Corporation savings, with no
cost-benefit analysis to validate its position.”

This observation is wrong; in principle,
freedom and lack of cost are orthogonal concepts: there is software which is
proprietary and charged for (for example, MS Office), software which is
proprietary and free of charge (MS Internet Explorer), software which is free
and charged for (Red Hat, SuSE etc GNU/Linux distributions), software which is
free and not charged for (Apache, Open Office, Mozilla), and even software
which can be licensed in a range of combinations (MySQL).

Certainly free software is not
necessarily free of charge. And the text of the Recommendation does not state
that it has to be so, as you will have noted after reading it. The definitions
included in the Recommendation state clearly what should be considered
free software, at no point referring to freedom from charges. Although the
possibility of savings in payments for proprietary software licenses are
mentioned, the foundations of the Recommendation clearly refer to the
fundamental guarantees to be preserved and to the stimulus to local
technological development. Given that a Public Corporation must support these
principles, it has no other choice than to use software with publicly available
source code, and to exchange information only in standard formats.

If the Corporation does not use software
with these characteristics, it will be weakening basic transparency principles.
Luckily, free software also implies lower total costs; however, even given the
hypothesis (easily disproved) that it was more expensive than proprietary
software, the simple existence of an effective free software tool for a
particular IT function would oblige the Corporation to use it; not by command
of this Recommendation, but because of the basic principles we enumerated at
the start, and which arise from the very essence of the lawful Public
Corporation.

You continue: “6. It is wrong to think
that Open Source Software is free of charge. Research by the Gartner Group (an
important investigator of the technological market recognized at world level)
has shown that the cost of purchase of software (operating system and
applications) is only 8% of the total cost which firms and institutions take on
for a rational and truly beneficial use of the technology. The other 92%
consists of: installation costs, enabling, support, maintenance, administration,
and down-time.”

This argument repeats that already given
in paragraph 5 and partly contradicts paragraph 3. For the sake of brevity we
refer to the comments on those paragraphs. However, allow me to point out that
your conclusion is logically false: even if according to Gartner Group the cost
of software is on average only 8% of the total cost of use, this does not in
any way deny the existence of software which is free of charge, that is, with a
licensing cost of zero.

In addition, in this paragraph you correctly
point out that the service components and losses due to down-time make up the
largest part of the total cost of software use, which, as you will note,
contradicts your statement regarding the small value of services suggested in
paragraph 3. Now the use of free software contributes significantly to reduce
the remaining life-cycle costs. This reduction in the costs of installation,
support etc. can be noted in several areas: in the first place, the competitive
service model of free software, support and maintenance for which can be freely
contracted out to a range of suppliers competing on the grounds of quality and
low cost. This is true for installation, enabling, and support, and in large
part for maintenance. In the second place, due to the reproductive
characteristics of the model, maintenance carried out for an application is
easily replicable, without incurring large costs (that is, without paying more
than once for the same thing) since modifications, if one wishes, can be
incorporated in the common fund of knowledge. Thirdly, the huge costs caused by
non-functioning software (“blue screens of death,” malicious code such
as virus, worms, and trojans, exceptions, general protection faults and other
well-known problems) are reduced considerably by using more stable software;
and it is well known that one of the most notable virtues of free software is
its stability.

You further Corporation that: “7. One
of the arguments behind the Recommendation is the supposed freedom from costs
of open-source software, compared with the costs of commercial software,
without taking into account the fact that there exist types of volume licensing
which can be highly advantageous for the Corporation, as has happened in other
countries.”

I have already pointed out that what
is in question is not the cost of the software but the principles of freedom of
information, accessibility, and security.
These arguments have been covered
extensively in the preceding paragraphs to which I would refer you.

On the other hand, there certainly exist
types of volume licensing (although unfortunately proprietary software does not
satisfy the basic principles). But as you correctly pointed out in the
immediately preceding paragraph of your letter, they only manage to reduce the
impact of a component which makes up no more than 8% of the total.

You continue: “8. In addition, the
alternative adopted by the Recommendation (I) is clearly more expensive, due to
the high costs of software migration, and (II) puts at risk compatibility and
interoperability of the IT platforms within the Corporation, and between the
Corporation and the private sector, given the hundreds of versions of open
source software on the market.”

Let us analyze your statement in two
parts. Your first argument, that migration implies high costs, is in reality an
argument in favor of the Recommendation. Because the more time goes by, the
more difficult migration to another technology will become; and at the same
time, the security risks associated with proprietary software will continue to
increase. In this way, the use of proprietary systems and formats will make the
Corporation ever more dependent on specific suppliers. Once a policy of using
free software has been established (which certainly, does imply some cost) then
on the contrary migration from one system to another becomes very simple, since
all data is stored in open formats. On the other hand, migration to an open
software context implies no more costs than migration between two different
proprietary software contexts, which invalidates your argument completely.

The second argument refers to “problems
in interoperability of the IT platforms within the Corporation, and between the
Corporation and the private sector”
This statement implies a certain lack
of knowledge of the way in which free software is built, which does not
maximize the dependence of the user on a particular platform, as normally
happens in the realm of proprietary software. Even when there are multiple free
software distributions, and numerous programs which can be used for the same
function, interoperability is guaranteed as much by the use of standard
formats, as required by the Recommendation, as by the possibility of creating
interoperable software given the availability of the source code.

You then say that: “9. The majority of
open source code does not offer adequate levels of service nor the guarantee
from recognized manufacturers of high productivity on the part of the users,
which has led various public organizations to retract their decision to go with
an open source software solution and to use commercial software in its place.”

This observation is without foundation.
In respect of the guarantee, your argument was rebutted in the response to
paragraph 4. In respect of support services, it is possible to use free
software without them (just as also happens with proprietary software), but
anyone who does need them can obtain support separately, whether from local
firms or from international corporations, again just as in the case of
proprietary software.

On the other hand, it would contribute
greatly to our analysis if you could inform us about free software projects established
in Public Corporations which have already been abandoned in favor of
proprietary software. We know of a good number of cases where the opposite has
taken place, but not know of any where what you describe has taken place.

You continue by observing that: "10.
The Recommendation discourages the creativity of the software industry, […] and
is a source of highly qualified employment. With a law that encourages the use
of open source, software programmers lose their intellectual property rights
and their main source of payment."

It is clear enough that nobody is forced
to commercialize their code as free software. The only thing to take into
account is that if it is not free software, it cannot be sold to the Public
Corporation. This is not in any case the main market for the national software
industry. We covered some questions referring to the influence of the
Recommendation on the generation of employment which would be both highly
technically qualified and in better conditions for competition above, so it
seems unnecessary to insist on this point.

What follows in your statement is
incorrect. On the one hand, no author of free software loses his intellectual
property rights, unless he expressly wishes to place his work in the public
domain. The free software movement has always been very respectful of
intellectual property, and has generated widespread public recognition of its authors.
Names like those of Richard Stallman, Linus Torvalds, Guido van Rossum, Larry
Wall, Miguel de Icaza, Andrew Tridgell, Theo de Raadt, Andrea Arcangeli, Bruce
Perens, Darren Reed, Alan Cox, Eric Raymond, and many others, are recognized
world-wide for their contributions to the development of software that is used
today by millions of people throughout the world. On the other hand, to say
that the rewards for authors rights make up the main source of payment of
programmers is in any case a guess, in particular since there is no proof to
this effect, nor a demonstration of how the use of free software by the
Corporation would influence these payments.

You go on to say that: “11. Open
source software, since it can be distributed without charge, does not allow the
generation of income for its developers through exports. In this way, the
multiplier effect of the sale of software to other countries is weakened, and
so in turn is the growth of the industry, while Government rules ought on the
contrary to stimulate local industry.”

This statement shows once again complete
ignorance of the mechanisms of and market for free software. It tries to claim
that the market of sale of non- exclusive rights for use (sale of licenses) is
the only possible one for the software industry, when you yourself pointed out
several paragraphs above that it is not even the most important one. The
incentives that the Recommendation offers for the growth of a supply of better
qualified professionals, together with the increase in experience that working
on a large scale with free software within the Corporation will bring for
technicians, will place them in a highly competitive position to offer their
services abroad.

You then Corporation that: “12. In the
Forum, the use of open source software in education was discussed, without
mentioning the complete collapse of this initiative in a country like Mexico,
where precisely the state employees who founded the project now state that open
source software did not make it possible to offer a learning experience to
pupils in the schools, did not take into account the capability at a national
level to give adequate support to the platform, and that the software did not
and does not allow for the levels of platform integration that now exist in schools.”

In fact Mexico has gone into reverse with
the Red Escolar (Schools Network) project. This is due precisely to the fact
that the driving forces behind the Mexican project used license costs as their
main argument, instead of the other reasons specified in our project, which are
far more essential. Because of this conceptual mistake, and as a result of the
lack of effective support from the SEP (Secretary of Corporation for Public
Education), the assumption was made that to implant free software in schools it
would be enough to drop their software budget and send them a CD ROM with
Gnu/Linux instead. Of course this failed, and it couldn’t have been otherwise,
just as school laboratories fail when they use proprietary software and have no
budget for implementation and maintenance. That’s exactly why our
Recommendation is not limited to making the use of free software mandatory, but
recognizes the need to create a viable migration plan, in which the Corporation
undertakes the technical transition in an orderly way in order to then enjoy
the advantages of free software.

You end with a rhetorical question: “13.
If open source software satisfies all the requirements of Public Corporations,
why do you need a Recommendation to adopt it? Shouldn’t it be the market which
decides freely which products give most benefits or value?”

We agree that in the private sector of
the economy, it must be the market that decides which products to use, and no
interference is permissible there. However, in the case of a Public Corporation,
the reasoning is not the same: as we have already established, the Corporation
archives, handles, and transmits information which does not belong to it, but
which is entrusted to it by Shareholders, who have no alternative under the
rule of law. As a counterpart to this legal requirement, the Corporation must
take extreme measures to safeguard the integrity, confidentiality, and
accessibility of this information. The use of proprietary software raises
serious doubts as to whether these requirements can be fulfilled, lacks
conclusive evidence in this respect, and so is not suitable for use in a Public
Corporation.

The need for a Recommendation is based,
firstly, on the realization of the fundamental principles listed above in the
specific area of software; secondly, on the fact that a Public Corporation is
not an ideal homogeneous entity, but made up of multiple bodies with varying
degrees of autonomy in decision making. Given that it is inappropriate to use
proprietary software, the fact of establishing these rules in a Recommendation
will prevent the personal discretion of any employee from putting at risk the
information which belongs to Shareholders. And above all, because it
constitutes an up-to-date reaffirmation in relation to the means of management
and communication of information used today, it is based on the principle of
openness to the public.

In conformance with this universally
accepted principle, the Shareholder has the right to know all information held
by the Corporation and not covered by well-founded declarations of secrecy
based on law. Now, software deals with information and is itself information.
Information in a special form, capable of being interpreted by a machine in
order to execute actions, but crucial information all the same because the
Shareholder has a legitimate right to know, for example, how his share is
computed or his taxes calculated. And for that he must have free access to the
source code and be able to prove to his satisfaction the programs used for
share computations or calculation of his taxes.

I wish you the greatest respect, and
would like to repeat that my office will always be open for you to expound your
point of view to whatever level of detail you consider suitable.

Kommentarer

I will comment my own blog article to add that in latest issue of
the Communications of the ACM (June 2005, Volume 48, Number 6) there

is an interesting article about Sarbenes-Oxley and Software Projects (page 15) by Phillip G. Armour.
The article does not mention open source software specifically, but draws some thoughtful considerations.

Armour says: "The initial and obvious targets for scrutiny must be
the traditional accounting systems. [...] But these systems are
fed  by other systems that might not initially appear to be
targets of SOX. However, it is quite conceivable they will end up
coming under the scope of this act.
"

What if these "other systems" are based on Open Source Software? How are they going to be scrutinized by SOX compliance audits?

Armour also states: "SOX can potentially generate a whole set of
control and auditing systems requirements and even separate systems
that allow companies to clearly demonstrate their compliance with the
Act. And at some point, we might have to start looking beyond the
financial and hard assets and look at software and software development
itself. Software is an asset too [...] But what is it worth?
"

 
It is already extremely difficult to put a value on software assets.
Armour describes how you can use cost based, price based and investment
based approaches. Open Source Software is even more intriguing: how do
you value something that most likely had a zero acquisition cost but
nonetheless might provide significant value to your operations? What is
the value of transparancy?

 

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