Shortcut to the Cloud

KualiCo acquires parts of rSmart, a longtime supporter of the community project. Meanwhile, other commercial affiliates are waiting to see where they fit into the picture.

October 14, 2014

When the Kuali Foundation in August confused and surprised the open-source software community with the announcement that it would launch KualiCo, a commercial service provider, rSmart’s Chris Coppola was a voice of reason.

“As a Kuali community co-founder and leading Kuali Commercial Affiliate, we’re excited about Kuali’s future,” Coppola, CEO of rSmart, wrote in response to the news. “rSmart is committed to our customers, to the Kuali mission and to supporting this new direction.”

Less than two months later, rSmart is getting out of the Kuali business altogether, and Coppola is joining KualiCo. In a three-way deal announced Tuesday, rSmart is selling its cloud technology to KualiCo, while Navigator Management Partners, another one of Kuali's commercial affiliates, will take over rSmart's consulting services.

The turnaround is an example of the ongoing reshuffling of responsibilities between KualiCo and the foundation’s commercial affiliates, as the former assumes a more active role in bringing the enterprise resource planning software to colleges and universities. Before KualiCo, the division of labor was clear: the commercial affiliates handled consulting and hosting, while the foundation’s university partners developed the software. Now, some of the commercial affiliates are waiting for KualiCo to take shape before they change their strategies.

“We are affected by the change and are in the process of re-configuring our Kuali strategy around the new model,” Martilene Orffer, CEO of the Cape Town, South Africa-based OpenCollab, said in an email. “As you can imagine with us being on the Southern tip of Africa, between 8,000-9,000 miles away from the action in the USA, it takes more time to chat to all involved across continents to understand the implications and map our way forward.”

Rob Yetter, managing partner at Polus Solutions, offered a similarly undecided response. “We are unclear what this will mean for the community,” Yetter said in an email. “Each institution involved with a Kuali Project will need to decide if this is the best direction for the Kuali organization, the software and their institution.”

Other commercial affiliates, such as Vivantech, linked to past statements offering cautious optimism and a pledge to work with the Kuali Foundation.

Joel Dehlin, CEO of KualiCo, described the acquisition of rSmart’s technology as a pragmatic decision.

“From KualiCo’s perspective, it lets us get a jumpstart on hosting,” Dehlin said. “It lets us not have to go build that. We can start hosting immediately.”

Before the launch of KualiCo, the foundation lacked an entity that could respond to requests for proposals from universities looking to upgrade their software. That put Kuali at an automatic disadvantage. With such an entity now in place, KualiCo should be in a better position to win more contracts, which Dehlin said should hopefully “grow the ecosystem for [commercial affiliates], not make it smaller.”

Tuesday’s acquisition doesn’t mean KualiCo intends to gobble up the remaining commercial affiliates one by one, Dehlin said. Although it is possible KualiCo will acquire other companies in the future, he said none are currently being planned.

“The message should be the same, which is: rSmart’s expertise was its services and cloud,” Dehlin said. “The only thing KualiCo is doing is providing a cloud-based product.”

In the weeks that have passed since the KualiCo announcement, the foundation has had to respond to criticism and clear up misconceptions from university leaders, some of whom have expressed concerns about the commercial entity. Others initially thought KualiCo was replacing the foundation. Meanwhile, some higher education analysts have published obituaries for community-source projects.

“One of the things that’s been written about the move from Kuali 1.0 to Kuali 2.0 is the idea that we’re moving from a non-commercial to a commercial model when in fact, going back to our origins, rSmart is one of the co-founders of Kuali,” Coppola said. “We didn’t do that for non-commercial reasons. The commercial ecosystem has always been a very important part of Kuali, and this only strengthens that.”

Coppola will be considered one of KualiCo’s co-founders, Dehlin said.

With most of rSmart’s 40 employees leaving for either Navigator or KualiCo, a “handful” of employees will focus on OneCampus, a campus service tool.


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