Corporate IT sharing

By Elizabeth Bennett  |  Posted 2005-04-06 Print this article Print

Best Buy and other Midwestern companies have begun to exchange applications they've written. But is swapping software good for everyone?


While Avalanche is young, private collaborating is not new. Businesses within industries have done it for years, according to Forrester Research analyst Michael Goulde, particularly for developing data tags in Extensible Markup Language. What distinguishes Avalanche, Goulde says, is the mix of companies, industries and vendors collaborating on software.

So far, there are several projects in the Avalanche repository. Select Comfort, a mattress retailer in Minneapolis, plans to develop an open-source digital asset management project based on existing code. When asked why the company is using Avalanche, chief information officer Mike Thyken said, "[Doing it yourself is] reinventing the wheel. It's extremely rare that someone hasn't gone down that path."

Most medium-size or large companies have the same challenges when it comes to data-processing, customer relationship management and open-source applications, says Eric Bloom, vice president of business systems at recruiting site Monster.com, an Avalanche member since December.

Monster is considering a jointly developed customer relationship management application for use in some of its smaller divisions.

Avalanche, however, isn't for everyone. Cargill and Medtronic, both founding members, have since dropped out of the consortium.

Hansen attributes the Cargill departure to the firing of its CIO, the Avalanche enthusiast in the organization. Tom Sauer, director of information solutions at Medtronic, says that the medical technology provider "was happy to be a part of the program,'' but now is "focusing on internal systems development and information sharing across business units."

Avalanche can't afford too much churn among its members. It already has to overcome a "not invented here" attitude, reluctance to share applications and difficulty collaborating with outsiders to foster growth, says Goulde, who adds that the co-op needs more members to prove to doubters it has a "truly sustainable idea."

"As numbers grow, assumptions begin to be challenged," Goulde explains. "If they could get 50 companies, they'd start to have something."

    4 Rules for joining a software co-op

    1. Determine the true costs of membership. Code may be ripe for the taking, but project all development and implementation costs before you sign on the dotted line.

    2. Seek immediate payback. Have a specific project or projects in mind when you join. Then do the math and see if it's worth the membership fee.

    3. Call the lawyers. Avalanche has attorneys to create "corporate-friendly" licensing terms, but know where the potential liabilities are before joining.

    4. Avoid needless risk. Unless you have a support team, skip open-source middleware for critical systems. Paying annual maintenance on commercial software may be cheaper.

Source: Forrester Research

Senior Writer
Elizabeth has been writing and reporting at Baselinesince its inaugural issue. Most recently, Liz helped Fortune 500 companies with their online strategies as a customer experience analyst at Creative Good. Prior to that, she worked in the organization practice at McKinsey & Co. She holds a B.A. from Vassar College.

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