Kuali’s formula after their for-profit direction is more problematic than that of a commercial vendor such as Ellucian, because Ellucian never asked for membership or “project contribution” money to develop software with the intention of selling the result back to you as SaaS products.
In my last Kuali related blog; “The Numbers Don’t Lie”, I wrote about how the Kuali’s net assets dropped by an alarming 61%; or in non-profit terms….they lost $15 million of the members’ money. I also wrote that through mid-2015 the write-offs increased almost 500%! Basically member departures, non-renewals and no new members led to this and sent a clear message about how the for-profit direction changed everything for many institutions.
When you look back a few years, the number of Kuali members before the for-profit Kualico/Kuali Inc. was 86. Now it is just a little over 20! If you exclude the institutions whose members are the Kuali foundation directors, there are 10. Those institutions represented by the foundation board members seem stuck as they try show that there are still some members sticking around; some of them probably reluctantly. Of course many of the biggest cash sources and important members have departed and yet they are still listed as partners on kuali.org.
What about the upcoming Kuali Days 2016? The homepage for the conference features a prominent countdown clock, but what is really going to happen when it reaches zero? Does it look similar to the picture below?
What I would like to touch on first is that the power of events like these lies not in the speeches, or the workshops, but in the mere achievement of bringing people together. Like a positive feedback loop, the more people that attend, the better the event becomes, just by the nature of each attendee offering something new and unique. Kuali recognizes this, but their feedback loop has moved in the wrong direction, and that is likely why their slogan for this year is “Be different. Together.” A very compelling theme, or at least it would be if it weren’t so similar to Android’s recent ad campaign. Even as moving as it sounds, it appears to go completely against what the Kuali community has been doing for the past two years. They state on their website:
“Celebrate the power and potential of the extraordinarily innovative Kuali community – the foundation, company, members, customers, and interested newcomers at Kuali Days 2016. The conference reinforces the Kuali attitude of daring to be different, encouraging and depending on the ideas, opinions, and shared experiences of the greater community. Be different. Together.”
First of all they confirm what I have been blogging about Kuali and how the for-profit direction changed everything. Notice that in the order of the words, “company” meaning Kuali, Inc.; the for-profit software company, appears upfront. If you say their slogan out loud, you can even hear a faint cry for reconciliation in those words, hoping that things could go back to the way it used to be before everything went so awry. I also find it rather ironic that Kuali decided back in 2014 that the community itself wasn’t sufficient and that KualiCo would take them to the next level; however it certainly appears they are clearly struggling in their ability to perform and they now want to “Celebrate the power and potential of the extraordinarily innovative Kuali community” once again. This new ‘daring to be different’ mentality is practically laughable when you consider the unwritten disclaimer that accompanies it: “*As long as it fits within the plans and is profitable for KualiCo.” I simply don’t like the mixing of the community and the for-profit company. Apparently, many institutions feel this way, as the number of members went from 86 to little over 20.
Charging membership and project fees and then turning around and giving that money to a for-profit company has always been my beef in this change. This happening while Kuali tells their members that they can take the software and run it themselves; this is disingenuous. Nobody does that nowadays since almost everything is going to the cloud.
Back in the days of on-premise, licensed software, a conversation about a value proposition with an institution went something like this:
Commercial Vendor: We can give you the software with an initial license of $X and charge you 20-30% of $X per year maintenance. You will run our software on your own servers.
Kuali: You can download the open source software, free of licensing fees (you will save $X) and we will not charge you any maintenance fees (you will save 20-30% of X). You can leverage your internal IT team and install the software and run it on your servers. If you like this concept, optionally you can become a member of the Kuali consortium and pay membership fees which are substantially less than the licensing cost. If you want to influence the direction of the software, you can pay more in the form of project participation fees.
Fast forward to today’s profit motivated Kuali in the age of cloud-hosted software:
Commercial Vendor – We can give you the software in the cloud and charge you implementation fees of $X, then yearly subscription fees of $Y per year.
Kuali – We can give you the limited version of the software for free and you can run it in house (good luck!). Or, we can give you the software in the cloud and charge you implementation fees of $X, then yearly subscription fees of $Y per year – an approach identical to commercial vendors. Oh BTW, this is different than the vendor lock-in we talked about in anger for many years.
I have begun calling Kuali’s above tactic “crippleware”. Yes, there is a free version sometimes called freemium, it has some features, but for an organization it is basically useless. However, because they give away the free crippled version they still try to hang on to the open source mantra. If you want something that is really usable for your organization you have to pay. I think I would rather call it what it is…commercial software.
Ellucian a few years ago created a community source effort (I believe at the time, it was caused by the enthusiasm for the old Kuali Community) in which you could write code and donate it back to the community and then Ellucian would provide resources to maintain that code. I thought at the time…Hmmmm great we get to do R&D for a publicly traded company and then in some cases get the privilege of paying them for innovative work that we did. Then came Kuali’s commercialization.
Kuali’s formula after their for-profit direction is more problematic than that of a commercial vendor such as Ellucian, because Ellucian never asked for membership or “project contribution” money to develop software with the intention of selling the result back to you as SaaS products.
So back to the question “Why would anyone want to be a member of Kuali and go to Kuali Days? By now, they are practically a closed-source solution and act like any other commercial vendor that is just looking to lock in their client base. Once again, numbers don’t lie and losing $15 million of member institutions’ money and going from 86 members to little over 20 without some of the most important members is a very ominous sign. My sources tell me that the Foundation staff and board members have been calling H.E. institutions and asking them if they would attend Kuali Days 2016. I understand they are even calling institutions that are no longer members. I was also told that when they call, they are claiming that there will be over 300 people attending. Let’s do the math: discount the claims a little and say that 300 people attend; a far cry from almost 900 a few years ago; prior to the for-profit direction. Looking at the attendee lists from the past, Indiana University has always sent over 100 people to these events. They may send even more to this event to give the illusion that there are actually some people attending. There are nine other institutions represented by directors on the Kuali foundation board. Those directors are stuck on a sinking ship and will try to send as many attendees to Kuali Days as possible. That is another 150 people collectively I would suspect. We are up to 250. On the commercial side, Kuali Inc./Kualico will undoubtedly will send as many people as possible, perhaps 20. After the foundation staff, etc., we are really left with 20 people that are curious; if Kuali is lucky. Again, this is what happens when you go from a truly open, community software to commercial software essentially funded by the public sector dollars.
Kuali’s formula, even though they are commercial now, is asking for membership money to develop software with the intention of selling the result back to you as SaaS products. No responsible institution would do this.
Anyone who is curious about attending Kuali Days ought to think again.
Why bother?
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