Outsider's Questions

[Nelson Alger]

I am interested in the idea of a coop for developing software as it could generate some valuable code to be used by larger groups or the general public. The question I have is what happens when the group develops highly profitable software that is sold off? What are the incentives to the  individual developer and the group as a whole? I have worked a little bit with code writers in consulting that have helped me do my job much easier and faster creating value for our oil and gas clients that are managing aging pipelines. The code they wrote helps us compare in-line inspection data to be able to measure and trend corrosion on the inside of pipelines. We are now in initial discussions with the client to either continue doing work or sell the code and teach our client how to use it for their own benefit. In this case our consultancy owns the rights to the code, however, there's nothing that stops our coder from remembering how he wrote the code and creating something similar to sell or use elsewhere. How is a coop different from a consultancy with respect to the rights of the company, the individual developer and the intended client. also, how can a coop provide incentives for all three parties to take risks and commit to a group effort? Am I missing the intent of what this coop was created for?

[Alan Moore]

Nelson,

Welcome and thanks for the question :-)

You raise an interesting point re: consultancies. Your point about the coder who helped you develop a system is a good one. If your consultancy formed a cooperative project (e.g. on Co-op Source, or anywhere else) then he would have less of an incentive to steal key IP since he would have "skin in the game."

In addition, your consultancy would also have access to a larger engineering community (in the co-op model) for expertise that your coder may not posses. If you need an expert in a particular domain (e.g. statistical computing or simulation) that he/she is not familiar with then you can gain access to talent you might not otherwise have access to.

In addition, your client could also help fund the development effort by joining the cooperative and maintain a stake in the software produced. It doesn't have to be either/or, think of it as a joint venture. You can both benefit from the effort and this helps keep the economic incentives involved in alignment rather than at cross purposes. It is well known that investor, vendor and client relationships can be strained and there are often "perverse incentives."

A good analogy would be barn raising in the old days. It is still your barn, your land but you can do things faster and better with help from your neighbors than you could do alone. We help each other in return for either a share of the profits or like-kind help with other projects. There is also the case of building in the commons - everyone shares in the result.

Your question about what happens if the software is "sold off" points out a distinction we like to make. Software is a perishable good, we call it code rot. If a code base is not maintained over time it tends to fall into disrepair because the world around it keeps changing. In your case, a cooperative would sell a "fork" (snapshot) of the code at a given point in time. The real value stays with the "mainline" development and, in general, only this code receives fixes and new features.

The Co-op Source license, as it stands today, contains provisions that state that anyone buying the code is given a fork of the source (not just binaries/programs) so that if they encounter problems or the original developers get hit by a bus they can fix or maintain their fork. However, they are not allowed to re-sell or transfer in any way (unless otherwise specified) the source or binaries.

I hope this answers your questions. Clarifications provided upon request :-)

Alan

On Mon, Dec 15, 2014 at 9:27 AM, Nelson Alger <nka...@mtu.edu> wrote:

I am interested in the idea of a coop for developing software as it could generate some valuable code to be used by larger groups or the general public. The question I have is what happens when the group develops highly profitable software that is sold off? What are the incentives to the  individual developer and the group as a whole? I have worked a little bit with code writers in consulting that have helped me do my job much easier and faster creating value for our oil and gas clients that are managing aging pipelines. The code they wrote helps us compare in-line inspection data to be able to measure and trend corrosion on the inside of pipelines. We are now in initial discussions with the client to either continue doing work or sell the code and teach our client how to use it for their own benefit. In this case our consultancy owns the rights to the code, however, there's nothing that stops our coder from remembering how he wrote the code and creating something similar to sell or use elsewhere. How is a coop different from a consultancy with respect to the rights of the company, the individual developer and the intended client. also, how can a coop provide incentives for all three parties to take risks and commit to a group effort? Am I missing the intent of what this coop was created for?

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