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Wednesday, October 07 2009 @ 06:53 AM EDT

The CodePlex Foundation: First Impressions (and Recommendations)

Well, it’s been a busy week in Lake Wobegon, hasn’t it?  First, the Wall Street Journal broke the story that Microsoft had unwittingly sold 22 patents, not to the Allied Security Trust (which might have resold them to patent trolls), but to the Open Inventions Network.  A few days later, perhaps sooner than planned, Microsoft announced the formation of a new non-profit organization, the CodePlex Foundation, with the mission of “enabling the exchange of code and understanding among software companies and open source communities.”

Not surprisingly, more articles were written about the apparent snookering of Microsoft by AST and OIN than about the new Foundation.   But while the tale of the 22 patents is now largely over, the CodePlex story is just beginning.  Microsoft says that its goal for the new Foundation is to create an open and neutral environment, and that the formation documents posted and governance structure described at the CodePlex Foundation site can provide a foundation for such an organization.  The CodePlex site also makes clear that the Bylaws you can find there are just a starter set, stating, “Our governance documents are deliberately sparse, because we expect them to change.”

That’s good to hear, because I’ve reviewed all of the material at the CodePlex site, and I think that quite a bit of the governance structure will need to change before CodePlex can expect to attract broad participation.

Over the past 22 years, I’ve helped structure scores of open, consensus based consortia and foundations, and represented over 100 in all (disclosure: they include the Linux Foundation; a full list can be found here).  In this blog entry, I’ll show where I think the legal and governance structure of CodePlex has wandered off the open path, and offer specific recommendations for how the structure could be changed to give people (other than Microsoft business partners) confidence that CodePlex will be an organization worth joining.

Since there’s a lot of ground to cover, to make it an easier read I’ll use the self-interview approach that I’ve picked up from Steve O’Grady over at RedMonk.

Q:  What’s the sixty thousand foot guidance on how to set up an organization that will inspire confidence that it’s safe to join?

A:  It’s all about three closely related factors: appearances, control mechanisms, and broad support.  What you want to do is to create a structure that you demonstrably _can’t_ control.  If you claim that you want the organization you launch to be neutral, and then people find “gotchas” in the documents, you’ve lost the credibility war on the first day of battle.

It also helps enormously to launch with multiple partners, rather than try to add them later after people are no longer paying attention.  You’ll never get more press than on the day you do your public launch, and if both competitors as well as allies are standing next to you on the stage as co-founders, that sends a powerful message that the organization really is not under any individual company's control.

For this reason, new organizations traditionally operate in stealth mode until they sign up an impressive roster of co-founders, so that people pay attention, and figure that there is broad industry support for what you want to accomplish.  If instead you’re out there all alone, then people wonder why that’s so.

In this case, Microsoft launched without any co-sponsors (it has been theorized by many that the launch date was accelerated to offset the adverse publicity generated by the disclosure of the sale of the 22 patents), which I think was a mistake.  If you go through the CodePlex site, you also learn that, while additional sponsors will be welcome, Microsoft has provided $1 million in funding for the first year’s operation.  Microsoft will also provide the staff that will run the organization.

While it’s good that Microsoft is willing to provide so much economic support in times like these, it’s not helpful in building trust that the organization really will be independent and neutral.  For better or worse, if all of the money and all of the staff come from one company, it will be hard for most folks to believe that CodePlex it will really be neutral in action.

Perhaps most significantly, when you go through the formation documents in greater detail, you also start running into “gotchas.”  Some of these can be easily changed, and perhaps were meant to be open for discussion.  But others (such as the decision not to form CodePlex as a membership organization) are so fundamental that I expect that Microsoft doesn’t intend for them to change.

The bottom line is that forming a successful consensus-based organizations is a bit like stepping through the looking glass – you win by giving things away, not by extracting value from others or controlling them.  You have to create a place where people can be expected to conclude that it's safer to be a part of the organization, than to stay outside.  Consequently, if it looks like you've kept too much control, the best you can hope for is to form a glorified user group.  I’ve written extensively on how to form an organization that is convincingly open, for example here and here.

Q:  So now let’s cover the basics; how is the Foundation set up?

A:  Microsoft organized CodePlex under the non-profit laws of the State of Washington, which may be a good neutral choice, or may not.  Most attorneys (myself included) aren’t familiar with Washington law, so it’s hard to tell (I always use Delaware law when forming a new non-profit, since its laws are very flexible, and most attorneys have some familiarity with it).  Also, CodePlex has not been set up as a membership organization, which is very unusual for an organization operating in an area that usually relies on consensus in order to be credible.

Q:  Is that good or bad?

A:  In my view, it’s bad, because it means that the Board of Directors not only has complete control, but the Board is also self-perpetuating (i.e., the directors elect their own successors).  Moreover, there are no term limits on how long a Board member can serve.  In this kind of organization, the Board is not answerable to the participants, and the participants have no say or control at all over how the organization is managed or evolves.