Back in 2008-2009 my then PI tried this: it worked for a while, but then it proved to be untenable. Not because there wasn't enough money (there was) but because the university did not like the idea to get someone on board just to help researchers develop software, and thus there were so many roadblocks at one point that it was impossible to go on.
I don't honestly know how much I can disclose (FTR, I was not the one doing that job - I was working as a postdoc there at the time), but I'll try to summarize it briefly:
- PI got a couple of EU funded grants
- PI wanted to build a program / programs out of some ideas he had before moving to the institution he was currently employed at
- PI hired a software developer (actually a software engineer) to do this job
- Statistician drafted algorithms, developer created the software
- I used the software for my Ph.D. thesis, got hired at the lab of the PI as a postdoc, new requirements arose due to the way I used it
- Developer made a preliminary version of a new version of the software following discussions with me
- University made it very hard to keep developer on the team, due to bureaucracy and kind of hostility towards this kind of employment
- At some point (I can't recall the details exactly, but it was something that spanned almost one year), the form of keeping the developer on board was no longer possible
- PI offers an alternative contract, but it is financially wasteful to the developer (not the fault of the PI, but the way certain things work in my country)
- Developer leaves the project
Also the university, to my knowledge, complained that the developer cost a lot (IIRC, the project was paid at market rate, so in line with other, non academic software projects).
I can't comment on the quality of the software we used (sadly it was never open sourced) as it was in Java and I only have a passing understanding of the language, but the approach of having a dedicated developer IMO worked (and also net quite a number of publications over that period).
