Aside from the efficiencies of cooperative development, Avalanche members can receive other benefits as well. Avalanche's licensing agreement restricts the cooperative's code to members only, eliminating the fear that valuable code will simply be spread far and wide, without competitive benefit to the contributing members. And then there's the question of putting pressure on commercial software vendors.

"One of the original premises was that the balance of power had swayed quite heavily to the vendor side," says Jay Hansen, CEO of the cooperative. "The IT consumer wanted to take back a little bit of the control over their own destiny."

Financial services companies are getting in on the open-source action as well. What began in 1997 as an internal effort to consolidate integration development at international investment bank Dresdner Kleinwort Wasserstein (DrKW) has become Openadaptor, a Java-based open-source integration platform. "The most common thing you have in a bank is communication between systems," says Steve Howe, DrKW's vice president and head of open-source initiatives. In the late 1990s, the company set out to create a standardized programming interface that would keep internal developers from having to reinvent basic code for every new project. The code behind the interface was shared with all of the company's developers, and each was able to make suggestions for - and sometimes even changes to - the source code. The result was a dramatic decrease in development time for connectors.

The system worked so well, in fact, that DrKW hired software development collaboration provider CollabNet, which hosts collaborative development environments for both commercial and open-source projects, to release its connector platform in open source as the organization Openadaptor. DrKW wagered that if other organizations got involved, it would result in further enhancements to the platform. The idea worked. The core software currently sees more than 8000 downloads a month of the organization's site. And while no one knows exactly how many corporations are taking part, Howe says that Deutsche Bank, Hallifax Bank of Scotland, Hewlett-Packard, JP Morgan Chase and the Royal Bank of Scotland are all involved.

Howe notes that Openadaptor is a case of an open-source product unlikely to see a commercial competitor. "The really good thing about Openadaptor is that it's really lightweight. There's not much real impetus for the vendors to put that sort of thing out; they couldn't charge very much for it," he says. In other cases, the project could have a more dramatic impact on an existing vendor. Such is the case with Sakai.

Costs and Competition

The Sakai Educational Partners Program is a set of projects spearheaded by universities looking to provide common platforms for a variety of tasks. One of those tasks is the creation of an open-source course management system - one aimed directly at a technology space currently occupied by Blackboard and other commercial competitors.

According to Sakai Community Liaison James Farmer, a recent survey of 22 universities currently using Blackboard found that 100 percent planned to drop the commercial product in favour of Sakai code. But Farmer is clear to point out that this project isn't about vendetta; it's about saving money. Having an open-source, cooperative development option would let schools reduce their costs by skipping commercial alternatives completely, or indirectly, by using the threat of open source to "put some restraint on price", Farmer says.

Malcolm Brown, director of academic computing at Dartmouth College, agrees with that assessment, noting that he wouldn't be afraid to use Sakai as leverage with his vendor. But he says cost is secondary to functionality. An admittedly happy Blackboard customer (he had zero downtime on his course management system last term), he says that the school is nevertheless keeping an eye on Sakai to see if it can provide a better product than the commercial alternatives. "The promise of Sakai is that it's written by universities for universities," Brown says, noting that university developers should be more aware of the complex relationships that can grow between educators and IT. "It can be tough to make all [the instructors] conform" to an application, Brown says. "The platform needs to be customizable and nimble." And if Sakai can deliver on those needs, he says, Dartmouth would consider moving to its platform. But for now, he notes, "It's too early to see how this is going to play out."

Getting the bulk of educational institutions moved to a single platform would save money in another way as well. "If you can interchange content, you will sharply reduce the cost of instruction," Farmer says. For instance, "McGraw-Hill produces 24 versions of its materials to support all the electronic teaching systems," including Blackboard. "If they could reduce to one standard, they could cut the cost of their media support by 80 percent. Textbooks are expensive because faculty members are judging not just on textbooks themselves, but on the quality of the other materials available for their online courses." Sakai, if widely adopted, would provide that single platform.

What began as a cooperative effort among four schools - Indiana University, MIT, Stanford and the University of Michigan - has grown to include more than 50 schools, including the bulk of the most prestigious purveyors of higher education in the world (University of Melbourne is a partner).

But while these cooperative efforts all are success stories (at least for now) it doesn't mean every corporation should immediately look to join a cooperative or start its own.

"If you're not comfortable using anything other than packaged software, we're probably not for you," says Andrew Black, vice president and CIO at Avalanche member Jostens.