Eight Minnesota companies, including retailer Best Buy Co., have gone live with an online database for sharing software code they've developed, in hopes of lowering costs and improving quality.

The Avalanche Technology Cooperative, which also includes class-ring maker Jostens Inc. and bed maker Select Comfort Corp., said last week that its members have begun sharing code from some 30 of their software projects among members on the Avalanche.coop Web site. They are using software-development tools from CollabNet Inc.

So far, much of the contributed code consists of Java tools, interfaces for business applications, and other utilities. But the group has bigger plans that include building a library of enterprise apps. For example, Best Buy has contributed to the project integration software called App Talk that's being used by Jostens in its IT shop. "That's something north of $170,000 I won't be spending on a vendor product," Jostens CIO Andrew Black says. "My return on investment is just fabulous."

Eventually, the project could yield new code developed by Jostens that Best Buy and others could in turn use. Jostens also is considering using Linux and Open Desktop word-processing, spreadsheet, and presentation applications assembled by Avalanche, Black says.

The Avalanche project is a twist on the open-source model of software development, in which programmers can modify the source code of software products and often freely distribute their changes to other users. But that approach to software development, while resulting in widely used products available for free or for low prices, has also raised legal issues about who owns the intellectual property that's flying around the Internet. SCO Group Inc. has sued AutoZone, DaimlerChrysler, and IBM for violating its Unix intellectual property through their use of the open-source Linux operating system. The DaimlerChrysler case was dismissed in July.

The Avalanche group has tried to sidestep this issue by providing its members with legal protection in case someone outside the cooperative charges shared code was originally theirs. Avalanche has spent more than $350,000 in the past two years on legal fees with the Minneapolis law firm Dorsey & Whitney LLP to develop a software-licensing policy that would restrict use of the code to co-op members. The group also will indemnify its members against legal action from outsiders. "We ensure the submitter is the owner of the code," Avalanche CEO Jay Hansen says. Members pay a $30,000 annual fee that helps cover the legal costs.

Mike Thyker, CIO of Select Comfort, says the cooperative provides a "legal umbrella" for its members to try new technologies with less risk. "Every company needs to integrate its ERP system [with] an Oracle database or wants to try voice over Internet Protocol," he says. "Why should we all be constantly reinventing the wheel?" The cooperative will try to generate projects that involve programmers from two or more companies, which would divide development costs among members.

But reinventing the wheel is common in IT departments, says Elmer Baldwin, CEO of Avalanche member Born Information Services Inc., an IT services firm. Companies train programmers to invent systems their companies need, then keep them strictly in-house. "But IT staffers have to accept that there are outside people with good ideas we need to adopt," he says. "Open source has always preached you're better off as part of a group than as an individual. I hope we become a model. We'll be one of many groups that get organized like this."

Some already exist. Massachusetts earlier this year established a database of open-source software for use by government agencies that's managed by the Government Open Code Collaborative, which includes seven states. California, Oklahoma, Oregon, Rhode Island, and Texas have also pursued policies or legislation to encourage their IT departments to use open-source software.

But Eric Raymond, a software developer and author of The Cathedral And The Bazaar (O'Reilly & Associates, 1999), a book about how open-source development improves software quality, says a project like Avalanche that's privately owned doesn't equal open source. "I'm opposed to any practice that makes continuing code secrecy look viable," he wrote in an E-mail last week. "The long-term effects will be bad."

Not every early backer of Avalanche has remained enthusiastic about the project, either. Cargill Inc. and Medtronic Inc., two of Minneapolis' largest companies, helped organize the cooperative but dropped out a year ago. According to one member, the companies decided not to participate because they believed they have little to gain from the code that's being shared. According to Avalanche CEO Hansen, the cooperative is trying to gain the collaborative advantages of open-source development without discarding the structure of proprietary project. Open-source development projects can have completion dates continually slip, he says.

In Avalanche, Hansen says, "if four CIOs say, 'This needs to get done,' it will get done."