This article appeared in today's Wall Stree Journal under the Portals column by Lee Gomes. The idea of a technology cooperative is pretty interesting and the implications for software firms are enormous. I think this type of initiative dovetails very well with the Open Source movement and will provide even more choices for corporate software users.

-kish

Avalanche Project
Is Clearing the Path
For Tech Cooperation

By LEE GOMES
Staff Reporter of THE WALL STREET JOURNAL

Co-ops have been a fact of life in U.S. agriculture for decades, with farmers banding together to solve common problems. Now, a group of computer chiefs at some of America's biggest companies are trying to do the same thing with technology.

If their Project Avalanche is a success, and it's hard to imagine it failing, it will be the biggest thing to hit the technology scene since open-source software like Linux. And just as with Linux, Avalanche threatens to be enormously disruptive to many of the tech industry's big players.

Avalanche is the brainchild of Andrew Black, head of computer operations at Jostens Inc., the people who make class rings, and Scott Lien, who holds the same post for ePredix, which does employee testing.

Both companies are in Minneapolis. Three years ago, the two men found themselves in the sort of gripe session common to their line of work. Why, they asked each other, were they writing such big checks to their software companies, but getting so little in return? Why were their in-house programming staffs writing the same sorts of custom programs written at thousands of other companies? If Detroit car makers can collaborate on research, why couldn't U.S. technology users?

The problem, they decided, was an imbalance of power between technology companies and their customers. Project Avalanche is their way of restoring that balance.

Avalanche is a legally constituted intellectual-property cooperative. Companies pay $30,000 a year to become members. They can then donate any in-house software they choose to the Avalanche library, with the project becoming the legal owner of the code. Project members get to use, free of charge, any of the other programs in the library.

While just a few weeks out of the chute, Avalanche already has some impressive sponsors, including tier-one names like Best Buy, Cargill and Medtronic. The group has a board of directors and full-time CEO, Jay Hansen, a former IT consultant. Its Web site is www.avalanchecorporatetechnology.com. Maybe it will buy itself a shorter URL one of these days.

Mr. Black says most of the past three years have been spent ironing out legal issues to immunize companies from the risks associated with either giving their software to Avalanche or using programs they get from it.

One of the first software donations to Avalanche was from Best Buy. It is a piece of so-called plumbing software called AppTalk that allows programs to communicate with each other. It may not be sexy stuff, but it took Best Buy about 100 programmer-years to write it.

John Schmidt, the Best Buy executive in charge of AppTalk, says his company was willing to give it away because it expects to benefit from the additional improvements made to the program from the others using it. Those improvements could also be donated back to the Avalanche library, a technique common in the open-source software world.

While many of the programs donated to Project Avalanche will work with Linux, it isn't a precondition. Avalanche takes all kinds of software, including programs that work with Windows. Members, says Mr. Hansen, aren't expected to give away any in-house software that gives their companies a unique competitive advantage.

So what exactly is so threatening about this effort to big software companies? Just listen to the plans the men have for the group.

Suppose, says Mr. Lien, that some Avalanche members chipped in money to create custom software to run their call centers? Any other Avalanche member would then be able to use the code -- and wouldn't have to write checks for millions of dollars to Siebel Systems, which makes much of its money on these sorts of programs.

Or, asks Mr. Black, what if Avalanche members collaborated on a foolproof collection of open-source programs that could be used on their corporate desktops instead of the Windows and Office combinations from Microsoft? Mr. Black grumbles about having to pay Microsoft hundreds of dollars a year per employee for programs like word processing and spreadsheets, which he says should be commodities by now.

The men say U.S. companies have all sorts of talented programmers on staff, and could easily match, or exceed, the quality of the code from the best-known software companies. Their ultimate goal is to allow companies to spend less of their time and money on fairly generic software, much of which brings no specific business advantage, and more working on projects that will bring clear benefits to their business.

Because large corporations like those in Avalanche are the biggest customers of software companies, any shift like this would have enormous repercussions. The last thing any company wants is to have its customers banding together.

As residents of Minnesota, Mr. Black and Mr. Lien know their snow, and they say the name of their project was carefully chosen. An avalanche isn't only unstoppable, it also either buries everything in its path or carries everything along. Software companies may soon be needing to choose their fate.