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Is an avalanche coming?

Posted by javaben on April 13, 2004 at 7:36 PM PDT

Computers have undoubtedly and dramatically raised the productivity of businesses world-wide. Yet for all the increased profits that technology can inject into the bottom line, it has a nasty habit of turning around and grabbing fist-fulls of cash back out of the balance sheet (witness Microsoft's massive cash hoard).

No one's debating whether or not IT delivers more value than it consumes (at least, no one writing this blog), but for some executives, the high cost of enterprise software (and the required consultants, and the forced upgrades, and the unkept promises of vendors) has them searching for alternatives to the modern-day software industry.

The Wall Street Journal wrote an article on April 12, 2004 about a new software "co-op": Avalanche Corporate Technology. Its composed of a handful of large companies, including Best Buy, who have banded together to share each other's homegrown software assets -- for free. (There's a $30,000 annual membership fee).

Initially, the co-op's inventory of shared code isn't all that impressive (at least, from what I can see from the outside). But its the long-term vision of the group that grabbed my attention.

According to the WSJ, Avalanche sees a future where its members band together to write their own commercial-grade enterprise software (e.g., call center applications or even office suites) and giving the product to themselves for free.

I'm as skeptical as the next software engineer that a loosely organized band of hetergenous companies can effectively produce and support enterprise software, but I admit I'm intriguied by the Avalanche concept. I wonder -- is this the start of a significant (or at least notable) rebellion against the high margins, low quality, and upgrade tactics of the software industry? Or is it a naive and misguided attempt that will flame out sometime in 2005?

I also wonder why the companies involved don't just open-source their software. What controls/benefits/etc. does their co-op model give them over an open-source model? Or is the co-op and its up-front sign-up fee just a manifestation of Darl McBride's "nothing in this life should be free" attitude?

I'll be in Minnesota, Avalanche's turf, in a few weeks for the upcoming No Fluff Just Stuff software conference; I think I'll pay 'em a visit and see what these guys are up to.

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