Financial Sustainability for Open Source Projects

Economies of scale was a critical reason to start the Sakai project. Several universities working together on software development could produce a final product much less expensively than each of us working on our own. (And, of course, build the software we wanted to use.) Because we could eliminate redundancy, aggregate costs would be lower, and the cost to each university would also be lower. This equation paid off for Stanford. We developed about 20% of the original Sakai code base, which meant that we received 80% of the product in return. The other participating universities found the same scale economies. We've seen this model proven over and over again in the past seven years. Most recently, approximately 50 people have contributed to the Sakai 2.7 release, spreading costs widely; many more universities will will reap the benefits of this work.

Now, we need to consider the same concept of scale economy as it relates to sustainability of open source organizations. As open source projects have emerged, so have redundancies in infrastructure and administrative costs. Opportunities exist to share the cost of services, including community activities, technology infrastructure and administration. Sharing costs will allow more resources to be allocated to products and communities, and will reduce overall spending across projects.

There are substantial opportunities to create value by working with other organizations. Some opportunities are easily achieved. For example, sharing services such as event planning, administration and infrastructure costs makes sense. We can share services for these essential functions, and possibly better support the community and technology that are at the heart of our efforts. One simple example is to co-locate conferences. Sharing the planning and administration costs for conferences brings down overall expense, and meeting in the same conference facilities will bolster collaboration.

Undertaking mergers is a more complex, and potentially more rewarding proposition. Fedora and DSpace, the two largest academic digital library repository projects, merged into Duraspace in 2009. This sensible move allowed two organizations with similar goals and overlapping communities to combine technical, financial and community based resources. Similarly, in the academic administration realm, the Kuali projects work under an umbrella of common services. Coordinating at this scale has challenges, to be sure, most notably to foster shared effort in the community and project, while capturing scale economies in administration and governance. However, there are several successful models demonstrating that with care and thoughtfulness, it is possible to create more value by working together.

Sakai must consider in what situations shared services and mergers make sense to help enable our long term financial sustainability.