Collaborative That Once Criticized Software Companies Becomes One

Ten years ago, a group of universities started a collaborative software project touted as an alternative to commercial software companies, which were criticized as too costly. On Friday the project’s leaders made a surprising announcement: that it would become a commercial entity.

The software at issue, called Kuali, does the boring but important work of managing accounting, billing, e-commerce, budgeting, and other campus functions. Colleges can pay software companies tens of millions of dollars for these mission-critical tools, and the vision of Kuali was to take a do-it-yourself approach. The nonprofit Kuali Foundation helped manage development of free software that any college or university could use, in what was called a “community source” model. From the beginning the software has been open source, meaning that anyone can look under the hood of the software and make changes to it.

The Kuali project did develop a complex software tool that is used by 59 institutions. But one problem was that the project was not able to make updates and improvements fast enough to meet the demands of the colleges that used the software. And some colleges apparently worried that the group wasn’t financially sound.

Barry Walsh, executive director of the Kuali Foundation, said in a conference call on Friday that “angst” about the “pace and path to sustainability” of the project drove the change.

Leaders insisted that they would maintain the values of the project despite becoming the kind of organization that they once criticized. For one thing, the source software will remain free and open, but the company will sell services, like software hosting. On Friday the group issued an FAQ with details about the change.

“We would like to go faster for enhancements and improving the user experience as things go mobile and as things go multi-device,” said Brad C. Wheeler, chairman of the Kuali Foundation and chief information officer at Indiana University, in an interview. “There’s nothing here that’s sort of a rescue mission.”

His explanation for the change came down to this: Times have changed. Today, he said, college leaders perceive companies as more stable than communal projects. And he pointed to the emergence of companies like Instructure that sell hosting but make their software open source.

In its FAQ, the group acknowledged that some users of Kuali might walk away because of the changes. “But we will also gain new members excited by the potential of the new technology, new delivery models, and new leadership,” the document says.