Shareware Grows Up

A friendly group of Midwestern CIOs is saving money by pooling resources and software.

By C.J. Rhoads

July 5, 2004 12:00 PM ET

Computerworld - In July 2001, Andrew Black and Scott R. Lien were having a drink after work and commiserating about the high cost of software and intellectual property development. Lien, then vice president of information services for customer-facing systems at Best Buy Inc., had just been burned by a vendor that decided to take its software in a different direction -- leaving Lien high and dry for future updates. He and Black, CIO at Jostens Inc., knew from years of experience that they were both purchasing the same software and coding the same integration functions. They decided there had to be a better way.
In yet another after-work conversation, they enlisted the help of Elmer Baldwin, CEO of consulting firm Born Information Services Inc. The plan: Form a member organization to share resources such as software, utilities and IT planning tools.
"Initially," Baldwin said, "I thought they were nuts!" But he took on the project, began to investigate and soon was hearing a litany of complaints from CIOs about the cost of duplicated development efforts.
Meanwhile, Baldwin, Black and Lien met monthly. They hired Minneapolis-based Dorsey & Whitney LLP to work through the legal issues, consulted with prospective members and developed a business charter. Last fall, they formalized the structure as Avalanche Technology Corp., a for-profit Minneapolis-based cooperative, and hired Jay Hansen, formerly general manager of Asia-Pacific operations at Retek Inc., as CEO.
Companies pay $30,000 a year for an Avalanche membership, which entitles them to use any of the intellectual property that has been donated to the cooperative by other members. There are currently four members, with four more in various stages of approval, and about 30 intellectual property assets are being legally cleared for use. "Our goal is to grow by at least 10 companies within the next year," Hansen says.
Members log onto www.avalanche.coop, where they can review and download intellectual property or upload property they wish to donate.


A discussion of software development resource issues over an after-work drink led Scott R. Lien (left) and Andrew Black to form the for-profit Avalanche Technology cooperative. Image Credit: Sal Skog

Intellectual property assets can be integration applets, application add-ons, best-practice documentation, templates, project plans, user interfaces, software coding or schemas. "Anything that makes it easier to implement software," Baldwin says. "The financial models project a 20% to 40% decrease in the total cost of ownership of software at member companies," he adds.
Lien explains the Avalanche mission: "We want to take the friction out of collaboration," he says. "We are all under

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