The CIOs strike back
Andrew Black is part of a corporate software buyer's co-op called Avalanche. If it works as planned, the business of buying IT may be forever changed.
After all, CIOs have a lot to be grumpy about these days, what with their budgets under constant scrutiny, local tech talent as scarce as ever, and wily software suppliers always finding ways to bleed companies dry.
It's the last item in this list--frustration over the power that software companies wield over their corporate customers--that's occupied Andrew Black for the past three years. In 2001, Black, the CIO of graduation memorabilia maker Jostens, emerged from a particularly spirited gripe session determined to make a change.
Black banded together with a group of like-minded peers at Best Buy, Cargill, and Medtronic in a grassroots effort to resist the software industry's ills--its arbitrary upgrade cycles, feature-bloat, and incompatibility headaches.
The result, officially launched last month, is a corporate software buyer's co-op. Avalanche Corporate Technology Cooperative, as the group is called, takes inspiration from the open-source movement and applies a focus on business tools and applications. Black likens it to a "gated community," where members trade and improve upon one another's programs. With a cost of admission of $30,000 a year, it's likely to stay rather exclusive.
So far Avalanche has a handful of members clustered in the Minneapolis area but hopes to branch out to hundreds of companies across the country. Black, who spent his childhood on a Minnesota farm, explained to CNET News.com how farming co-ops may have influenced his vision and why he thinks Avalanche is an idea whose time has come.
How does Avalanche work exactly?
The basic idea is to improve IT effectiveness by collaborating or sharing intellectual property. So you, a corporation, would join Avalanche and for a $30,000 per-year fee, you would have access to a repository that stores that intellectual property.
What kind of intellectual property?
The easiest one is source code, but it can range over a broad variety of things like project plans, say, for an Oracle 11i upgrade, which is one of the earlier ideas that we had.
Why would I want to share that?
Let's say Jostens has an application that we have written, perhaps a scheduling application that we would use for scheduling IT jobs. We would place that in the repository and another organization, say a 3M, could use that and download it to their organization. They will likely have some special requirements, so they would make those modifications, and put that back in the repository. The idea is we all get access to these applications that corporations all over the country have written in an open-source fashion. Everyone can improve on those assets, which benefits the contributing company and clearly benefits the company that uses that IP.
What are some of the main objections or obstacles you run into from companies you talk to about this?
| When we talk about the basic idea, we have yet to run into any senior IT leader who does not really get this idea right away. |
How big do you think this could get?
Well, our vision now really is to get to hundreds of organizations across the country. Like any sort of network or collaboration out there, there is strength in numbers. Clearly, we see it measured in the hundreds of corporations.
Tell me about your frustrations with commercial software.
What drives you crazy about the way the software industry works?
The fact is that IT has become part of the DNA of organizations now. We run our companies on this commercial software and it is a sort of perilous position to be in because the very thing that you run your company on is largely out of your control.
How so?
For example, something as simple as an upgrade on one of your applications. You are forced to upgrade when your vendor drops support on something. But it could be that you have got something more important going on that year, like a strategic investment in customer relationship management (programs) that you would rather be devoting your resources to. But you are often forced to upgrade to a newer version of software.
Worse yet, if you have committed some portion of your company to run on a piece of software and that vendor changes direction, you are suddenly kind of out in the dark and, again, forced to go through, in this case, a re-platform, not even an upgrade. You are going to be forced to move and it just might not be your strategic priority at that time.
What you're describing here is the classic software maintenance model--which requires companies to pay annual fees and continually upgrade in order to get technical support for the product. Is that model less than satisfactory?
Maintenance by itself of course is a good thing. You want maintenance, but really it comes down to, do you feel like you are getting value for your maintenance dollars? Certainly, we get great support from some of our companies. We get less-than-great support from others, and for some companies I do not feel good about the investment that we are making on an annual basis.
Which companies are those?
We are trying really hard to avoid vendor bashing on this thing because it is easy to characterize this as some kind of anti-software vendor initiative. That is not what we are about here. We are about, I think, restoring a stronger sense of control and getting more value for our IT investment.
Some software companies are saying that IT buyers have gained a greater position of power in the contract negotiations because of the technology downturn. They're saying that it's basically a buyer's market. Are you finding that to be true?
With the downturn there is a lot more pricing pressure out there, but I guess I have not personally seen any kind of change in the fundamental process. I just have not seen it.
How does Avalanche compare to open-source software? Does it work similarly?
Well, we are calling it shared source. We are making open source safe for corporations, if you will. So you can kind of think of Avalanche as a gated community, where the assets in there are both owned by and shared by the members.
Don't your members worry about getting entangled in an intellectual-property dispute a la SCO and IBM?
One of the major new ideas from an intellectual-property standpoint that Avalanche does is makes it safe for corporations to share (intellectual property), with Avalanche taking on the role of the broker in the center that provides IP protection.
How do you do that?
We worked with Dorsey & Whitney, one of the Ivy League IP law firms. Obviously it was something we thought pretty hard about. Between the legal process and the subscriber agreements, we really are designed to keep issues such as the SCO-IBM battle out of our worry zone.
How do you make sure that software your members check in is not based on a commercial software product?
Yeah, it is a great question. We have got as part of the check-in process, a software tool that sort of grants clear title. It has a library of IP and it takes a look at the source code that is coming in much like a title search for a home. It will check and make sure that the source code does not have some prominence, some place else that we do not own or the corporations do not own. Obviously you cannot contribute software that you purchased from Oracle, SAP or IBM. The focus here would be around custom-developed applications that corporations have built.
So will the members of Avalanche try to build an open-source, or shared-source, customer relationship management system or enterprise resource management system--like those sold by SAP and Siebel Systems?
We would never say never, but it is sure not where we are starting.
Where are you starting?
Our thought is that Avalanche should make it easier for corporations to use software from these companies. For example, there are thousands of shops across the country that use Oracle or SAP or Siebel, and each of these shops are writing interfaces between them. So if you are running, you know an Oracle General Ledger and you want to connect your SAP application to it, everybody is writing the same bloody interfaces. It is ridiculous to have hundreds of organizations writing the same interfaces.
One of the things available through Avalanche is AppTalk, which allows you to do that integration work. So we think it just makes a lot more sense for a shared library of interfaces between major applications that we can write once, keep in a repository, and everybody can use.
Your bio says you grew up on a farm in Minnesota. Is there any kind of farm connection to this in terms of the way the farming industry works?
I think it is just kind of a fluke, a fun fluke, that (Avalanche CEO) Jay Hansen, (Avalanche Vice Chairman) Scott Lien and I all grew up on farms. But I think the idea of sharing and collaboration is certainly a strong one in farming communities the world over.
In terms of Avalanche memberships, are you primarily targeting companies in North America?
Yeah, our geography right now is the U.S. We think the idea would be equally applicable anywhere on the planet. We are just not legally set up right now to easily work outside of the U.S. I think our anticipation would be to grow our membership here in the U.S. and then branch out because the same dynamics work anywhere on the planet.
