Software developers worldwide are taking advantage of a Web-based exchange where they sell their expertise in Java, Linux and other software technologies directly to companies and other developers for anywhere from a few dollars to several thousand dollars.
Companies that use the HotDispatch Inc. exchange set the fees they are willing to pay for an answer to a question - even as little as US$35 - and usually get a response within an hour, HotDispatch officials say. But in India, where 26 percent of HotDispatch's member developers are located, $35 is more than what the World Bank estimates most people live on in a month.
A 24-year-old developer in Bangalore, India, for example, reported earning $3,500 since he became a member in January, according to HotDispatch. The WAP (wireless application protocol), C++ and Java programmer visits the site in his spare time selling programming tips and bits of code. Another developer in Bucharest has used the site to shop around a meta search capability he built, according to company officials.
Since HotDispatch.com opened for business in November, it has signed up nearly 25,000 members, most of whom are professional developers, information technology professionals or students. About half of the members are located outside the U.S., not only in places like Bangalore and Bucharest, but also in Israel, Russia, Germany and other countries. Membership isn't required, but it helps increase developers' chances of earning money because the registration form includes a profile of their skills that is used to match them to appropriate projects.
Webmasters, graphic designers and system administrators who are writing applications or looking for a developer to do a project are the typical "shoppers" who scan the site.
The fee they offer is paid to the first developer who provides the answer, and HotDispatch guarantees the developer gets the payment no matter what country he is in, said Mike Kaul, chief executive officer of HotDispatch. HotDispatch earns money by collecting 15 percent of the fee off the "requester," which is the company or individual that posed the question.
"You put your problem on the site with an offer to pay a certain amount for it, and you quickly get multiple responses from around the world. You can choose which solution serves you best," Kaul said in a telephone interview. As soon as the requester is satisfied, HotDispatch bills it and pays the developer.
Sites like HotDispatch.com point to a major change in the way application development is being done, said Tracy Corbo, senior analyst at Hurwitz Group Inc. Application development used to take place in very isolated environments, but the distributed nature of the Internet is enabling a shift to what Corbo calls online component brokering.
HotDispatch complements sites such as ComponentSource.com and Flashline.com, which offer components of code in "chunks," she said. With the high demand everywhere for computer programmers, HotDispatch has an interesting approach to finding talent, and it avoids the difficulties of hiring foreign nationals to move to the United States.
"Resources are such an issue that you can't ignore this," Corbo said.
It's especially useful for companies that have a very specific problem in their environment based on a specific configuration, she said.
Companies can also post projects at HotDispatch.com. These are bigger jobs advertised for thousand of dollars, and HotDispatch also charges 15 percent when a transaction is completed. Developers looking for work can browse through projects at the site, which also automatically notifies those member developers who have the skills needed to do the project. The highest value project ever offered at HotDispatch.com was worth about $8,000, Kaul said.
HotDispatch was founded in January 1999 in Cambridge by Massachusetts Institute of Technology researchers Hazem Sayed and Andrew Blumberg who reckoned that software developers ought to be able to sell their expertise online. They went to Sun Microsystems Inc. with their idea and the company loaned them equipment to build a prototype of the Web site. Eventually, they moved the company to California and received $6 million from the well-known Silicon Valley venture capital companies New Enterprise Associates (NEA) and Accel Partners.
Stewart Alsop, general partner at NEA, and Mitchell Kapor, a partner at Accel and founder of Lotus Development Corp., sit on HotDispatch's board of directors, said Kaul, who ran the electronic business division of Attachmate Corp. immediately before joining HotDispatch. He also is a former vice president of advanced technologies at Oracle Corp.
Kaul said HotDispatch serves as a marketplace for developers and IT managers in two other ways. Companies that have a large community of developers can also rent HotDispatch's infrastructure and use it as an application service provider.
HotDispatch also offers "office fronts," which are akin to a developer hanging out a shingle to advertise a particular expertise or application. The office fronts let an individual developer or group of developers describe their abilities in a separate part of the site.
In August the startup signed a deal with Palm Inc. that calls for Palm to provide a link on its Web site to HotDispatch.com. The move is expected to benefit both parties as well as developers, said A.C. Ross, vice president of business development at HotDispatch.
The link is aimed at helping Palm maintain the loyalty of Palm developers and accelerate the development of Palm applications, according to HotDispatch.
While the number of Palm developers continues to grow - Palm's latest estimate in March was 50,000 worldwide - rivals in the handheld market segment such as Handspring Inc., Sony Electronics Inc., Nokia Corp. and Qualcomm Inc., which have licensed the Palm OS, are drawing many away.
Palm confirmed that the link will be launched, but said a date for creating it hasn't been set. The company plans to release details about the link very soon, said Gabriel Acosta-Lopez, senior director of platform alliances and partner services for Palm.
"As soon as we launch, we will be very specific about what it will be and it will be very beneficial to the Palm developer community," Acosta-Lopez said.
Ross said the arrangement with Palm is significant for HotDispatch and is similar to arrangements that HotDispatch already sealed with IBM Corp. and Sun.
"A large part of our strategy is addressing the needs of large corporations," Ross said. "Palm adds a great deal of credibility that you can actually go get help and get your problem solved online."
HotDispatch, in Mountain View, California, can be found on the Web at http://www.hotdispatch.com. Palm, in Santa Clara, California, can be found on the Web at http://www.palm.com.