Programming prizes on the rise: The risks of entering

Software development contests offer opportunities for programmers to distinguish themselves in the job market, if they can afford the risks

Looking for a new software project to get involved with? Maybe you're a student or an academic, or maybe you're just an out-of-work developer looking for something that will help keep your skills sharp and pad your résumé. You could go scouring for an open source project to get involved with, but laboring in obscurity for little reward can be frustrating. Instead, why not sign up for a programming contest? You'll gain experience and you'll also stand a chance to win a cash prize -- that is, if you can afford to take a risk.

Prizes designed to encourage innovation are all the rage in engineering and the sciences. A pioneering example was the Ansari X Prize, which offered $10 million to whichever private firm could build a working reusable spacecraft. That prize was awarded to Burt Rutan and Paul Allen's SpaceShipOne project in 2004. The X Prize Foundation has gone on to offer similar awards for innovations in genomics, automotive engineering, and undersea exploration, among other areas, and its model has been mimicked by other organizations across a variety of business and scientific disciplines. It's no surprise that software companies should want to do the same.

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Perhaps the best-known example of a software development contest is the Netflix Prize, which offered a bounty to anyone who could substantially improve the output of the Netflix movie rental service's recommendation engine. That contest awarded $1 million in 2009 to a team of programmers calling themselves BellKor's Pragmatic Chaos. Since then, several other companies have offered prizes of their own for software in a variety of categories. But are such contests really a boon to developers, or are they merely yet another blow to an already battered software development labor market?

A proliferation of prizes

Web and software companies offer prizes for a variety of reasons. Chief among them is simply to raise awareness, interest, and participation in a given software platform or service. For example, in 2009 PayPal launched a contest to encourage development of "next-gen payment applications" based on its PayPal X APIs. The top prize was $100,000 split between cash and waived PayPal fees, and it was awarded in March to the developer of an online, person-to-person rental marketplace.

Other companies offer a combination of prizes and incentives to woo developers to their platforms. Palm, for example, offered a $100,000 top prize to the developer whose app was downloaded the most times from the company's WebOS mobile app store, and it further spread the wealth with 220 smaller awards. Similarly, Intel has offered cash incentives to developers who build apps targeting netbooks based on Intel's Atom processor, in addition to a grand prize worth $50,000.

Prizes are also becoming a popular way to encourage developers to find bugs and security vulnerabilities in existing applications and websites. In 2008, an attendee of the CanSecWest security conference won $10,000 for discovering a vulnerability in the WebKit HTML rendering engine, which powers the Chrome and Safari browsers, among others; Apple promptly fixed the bug. Since then, other firms have offered even bigger bounties. In March, security vendor TippingPoint -- now a subsidiary of Hewlett-Packard -- offered up to $100,000 for bugs found in mobile and desktop browsers.

No prize at all

But the practice of offering software prizes is not without concerns. Originally Netflix had planned a follow-up contest to its original Netflix Prize, which would have awarded up to $1 million to developers who further refined the company's recommendation engine. That plan was shelved when the Federal Trade Commission launched an inquiry into the privacy implications of such a contest, which was quickly followed by an independent class-action lawsuit. Security-oriented contests often draw similar scrutiny, occasionally leaving participants vulnerable to prosecution.

Another criticism of innovation contests of all kinds is that otherwise worthwhile contributions can fall prey to bureaucratic red tape. For example, the second-place contestant in the Netflix Prize actually achieved the exact same performance increase as the first-place contestant. Unfortunately for the runners-up, they filed their entry a mere 20 minutes later than the $1 million prizewinner.

This raises questions about the fairness of programming contests in general, particularly in the current economic climate. Contests like the Netflix Prize are sponsored by commercial entities that stand to profit from the innovations produced by the entrants. Those who participate invest valuable time toward winning the prize, but if they fail to meet the deadline (or to produce the leading results) their efforts could go completely unrewarded. Depending on the terms of the contest, however, the sponsor might still be able to make use of the runners-up's innovations -- which, of course, would be a whole lot cheaper than hiring developers.

In this sense, programming contests create a situation not unlike that offered by 99designs, a "crowdsourcing" site that connects freelance graphic designers with potential clients. Just as in most ordinary business transactions, clients post details of jobs on 99designs and designers bid on them. The problem is that on 99designs, each bid must include a completed design as requested by the client, and only the winning bidder gets paid. The result is a potentially huge labor pool, most of which ends up working for free. For software developers already hard hit by offshore outsourcing, the idea that a similar practice could become the norm in their industry presents a grim prospect.

The payout and then the payoff

Still, real-world engineering can be considerably more costly than the software kind, yet while the risks are greater, truly innovative work outside the software field has often yielded significant rewards in addition to prize money. For example, for several years NASA has sponsored a contest to develop a new, more flexible glove for use by astronauts. The top prizes in 2007 and 2009 were won by engineer Peter Homer, who claims he produced his designs "working alone at his dining room table." Today Homer heads Flagsuit, a company aimed at commercializing his designs, which is already delivering gloves for the private space industry.

This is likely to be the best model for programming contests of the future. Given the changing job climate in the software industry, developers are under increasing pressure to distinguish themselves as independent contractors and entrepreneurs who offer services above and beyond what is available from offshore outsourcing shops. While contests like those from Palm and Intel merely encourage developers to produce software that sells well, the Netflix Prize and the PayPal X Developer Challenge aim to produce genuine innovation. The rewards for the winners of such contests are likely to be far more valuable than the prize money itself -- so may the savviest small business win.

This article, "Programming prizes on the rise: The risks of entering," originally appeared at Read more of Neil McAllister's Fatal Exception blog and follow the latest news in programming at

This story, "Programming prizes on the rise: The risks of entering" was originally published by Network World.

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