What would you pay somebody to do if not work? The twists and turns of the market economy are wonderful, but even amidst all the brilliant business ideas of the techno boom at the turn of the millennium, there are still people out there who actually support themselves by honest work! This notion, which is so self-evident it could sound sarcastic, is an example of the selling-services business model. Established software companies initiate and make a computer program which they then sell packaged in colourful boxes, whereas in the pay-for-work model software is specifically commissioned. It works something like this: brilliant Open Source programs are available on the Internet free for anyone to use. If, however, what you need is not yet out there, programmers can write it for you - provided you pay, of course.

One example of the successful implementation of this model was the Kroupware project commissioned by the Federal Republic of Germany. In the summer of 2002, Germany commissioned a groupware solution running on Linux and the corresponding client or desktop software for use on both Linux and Windows from three companies closely associated with the KDE project (German Efrakon and Intevation, and the Swedish Klarälvdalens datakonsult).

A groupware solution is the kind of e-mail program that contains not just e-mail but other functions that are useful in an office, such as a calendar, contacts and, in some cases, chat groups. The best known groupware solutions used by companies are Microsoft's Exchange and IBM's Lotus Notes. Although there are a number of e-mail server programs available for Linux, nobody had yet made this type of multi-tasking tool. But the German authorities wanted to take their groupware needs into the world of Open Source.

The three companies with the winning tender named the project Kroupware.1 They decided to build the software around well-known Open Source programs, such as Apache's web server, the e-mail server Postfix, the OpenLDAP directory server and the IMP Webmail. The desktop software was created from existing and well-functioning KDE project modules, the e-mail program, calendar and contacts, which with a little work could be made into an entity resembling Microsoft Outlook. Naturally, some functions had to be created from scratch, but a lot of the work had already been done and could be put to direct use, which meant the Kroupware project was completed in record time in the summer of 2003. The resulting software was finally called Kolab.

Finishing such a complex software project within one year is somewhat unheard of in the IT world. Even more incredible is that the work was done by three relatively small and unknown consultancies. The fast pace of the work was only possible because the project could build so much on top-quality Open Source work that had already been done.2

The Kroupware project breaks with familiar market-economy mechanisms in an interesting way. The Federal Republic of Germany got the groupware application it wanted, but because the Kolab software is Open Source anyone who subsequently needs a good groupware solution for a Linux platform can copy it for free from the Internet! Is it fair that a software solution paid for by the German taxpayers could then be used by others free of charge?

Offhand, that may seem unfair, but in the world of Open Source such an outcome is standard practice. Since the beginning of hacking, Open Source hackers have always made programs to suit their own needs. With little interest in who else may or may not benefit from their work, their primary interest has essentially been to solve their own problems. As a client, the Federal Republic of Germany accepted this logic, and they aren't likely to have any reason to complain. Not only did they get what they wanted, they got a high-quality solution, they got it cheap, and they got it fast. What could be unfair about that?

Actually, Germany didn't have to pay for all of Kolab. After all, most of the Kolab software was made up of existing Open Source programs, the creation of which required many thousands of man-hours worth of blood, sweat and tears - or rather, loads of excited hacker spirit. For all this work - worth millions, if not billions - Germany didn't have to pay a single pfenning, nor for that matter even a single cent.

It is important to keep that in mind if we are to understand how Open Source works at its best. If we spend all our time jealously guarding how others might end up with more than we do, life can grind to a halt while all available time is diverted into sorting out disputes and backing out of dead ends. If instead we all focus on solving our own problems, everybody can be a winner.

Verdict: The pay-for-work business model that has proved to work very well is completely consistent with hacker ethics and utilises the strengths of Open Source. It's also worth mentioning that all the other models we've looked at have their financial roots in something other than programming. That is, their main business is consultancy, and programming is more or less a hobby done on the side. In the Kroupware project, however, programmers were actually paid to write code, which seems a very healthy thought! The pay-for-work principle appeals to everybody's common sense, particularly when we've seen the number of millionaires, on paper, created by the technology explosion.

However, the Kroupware project does leave some questions unanswered. The Federal Republic of Germany is a big enough client to be able to finance such a commission single-handed. But what about smaller clients? Must smaller companies and consumers wait for crumbs to fall from the tables of the big corporations and nation states, or could the same model work on a smaller scale? Such questions are what we'll look at next.

• 1There is a tradition in the KDE project to give all programs names beginning with the letter K, hence from groupware you get Kroupware. What was originally a fun idea has paled over the years.
• 2Hackers like to quote Isaac Newton, who wrote, "If I see further, it is because I stand on the shoulders of giants.'