Stanford University, the epicenter of the modern massive open online course movement, said this week that it will develop online learning software with the only one of the three MOOC providers not founded by a Stanford faculty member. … Mitchell [Stanford's vice provost] said the university’s “initial interest” in the edX software is so Stanford can offer material to current students on its campus or to students who take Stanford classes for credit online. … "I expect that we ourselves or other partners will offer the edX platform in a software-as-a-service model,” he [Agarwal, the edX president] said. In other words, universities would pay if they or their faculty wanted to use edX’s software.
This is all about business models, about how the large sums of money can be recouped that are being pumped into developing platforms for MOOCs and in creating the courses that these platforms run. It seems that two approaches are emerging. The first one is attempted by Coursera and Udacity, which follow a traditional closed-source model for their platforms. Course developers who want to offer their MOOCs through these platforms pay in terms of a share of the future revenue (see also http://sco.lt/7IoKZN). This is the Apple iTunes model, as I argued earlier in a blog of mine http://tiny.cc/ralyuw). The other way is followed by edX and now Stanford (the university, in contrast with the for profit companies Coursera and Udacity that are run by Stanford professors or ex-professors). The source code is open for any one to use, revenue streams are generated by offering services around the code (installation, fine-tuning, additional plug-ins, etc).
This model allows the MOOC-providing university much more freedom, it is the model Stanford now has decided to favour. Crucially, even though the software that drives edX's and the future Stanford MOOCs, is open for other universities to use - after all that is what 'open' here means, they do not become part of the edX family of MOOCs or the planned Stanford family of MOOCs. Ultimately, therefore, the move to open source the platform code by Stanford and Harvard is mainly a means to avoid diluting their brand by associating it with a mere platform provider (to wit, Coursera or Udacity). (@pbsloep)