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Stuart Cohen, former CEO of Open Source Development Labs, is launching a new company April 16 that will focus on building non-competitive, essential software for vertical industries in a collaborative environment that helps companies solve shared IT problems.

The business model for Collaborative Software Initiative is simple: Develop and support essential code that does not exist today and that meets the needs of competitors in vertical industries, such as financial services, at a significantly lower cost than if the companies were to develop such code internally or outsource it—and then support it.

All the software will be made available to the community under an open-source license, Cohen, CSI’s CEO, told eWeek.

“This has been something that a lot of financial services and other customers have been talking about with me for the last six to nine months,” said Cohen in Portland, Ore. “It is really about using the open-source methodology that has made Linux what it is, where competitive vendors all came together to work on the operating system.”

Click here to read more about a potential avalanche of Linux desktops.

Participating companies basically will form a steering committee of subject-matter experts, while CSI will write the code, distribute it back to the companies, and then support and maintain it. Open-source developers employed by CSI will do most of the engineering work. The company will also work with vendors such as Intel, IBM and Hewlett-Packard to ensure it is doing the right types of performance tests and that the correct tools and enhancements are in place so the software can move to market, Cohen said.

Such a business model is compelling to CSI because Cohen said most of its customers will want supported code and be willing to pay for it and will most likely choose a support partner—namely, CSI—that has been heavily involved in the development of that code.

CSI’s initial emphasis will be on accepting projects that will likely take a year or less to complete and are already well-defined, -documented and -understood. The company also will work with trade organizations that have already documented much of the requirements for projects, Cohen said. In addition, CSI will develop on a LAMP (Linux, Apache, MySQL and PHP) stack and be operating-system-independent. That is where the project management, IT and industry experience of Evan Bauer will come into play, Cohen said.
Bauer, CSI’s chief technology officer and former CTO at Credit Suisse First Boston, will help lead projects and develop the technology architecture.

“The common system needs of competitors within an industry are never easily met, especially for those systems that can never be considered a competitive edge,” Bauer said. “CSI fills that critical gap by bringing the experience and expertise in open-source and vertical-specific software development to create and run community software projects for the benefit of end-user enterprises and their industry associations.”

CSI recruited to its advisory council several luminaries from the free and open-source software industry, including Eben Moglen, who chairs the Software Freedom Law Center, and Brian Behlendorf, founder of CollabNet and co-founder of the Apache Software Foundation. Behlendorf sees CSI as the next logical step in the evolution of the open-source industry, and Moglen said CSI is one of the companies reflecting the new face of the free and open-source software phenomenon.

Cohen said that while CSI is not an open-source company per se, it has no plans to take open source code and try to commercialize it. The goal instead is to build communities and make available to the open-source community every piece of software the company develops. While CSI plans to offer code support, installation and training, it expects partners such as IBM, HP, Intel and Novell to take the products to market with a bundle of hardware, services and other software.

The move is good news for Linux vendors such as Novell.

“Developing software applications for vertical industries represents a unique challenge for both business and IT managers,” said Novell CEO Ron Hovsepian in Framingham, Mass. “CSI effectively addresses those challenges by using an open-source development model to bring together customers with similar IT challenges to jointly develop essential but noncompetitive applications. We look forward to many of these applications running on top of our SUSE Linux Enterprise platform.”

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