In its press release yesterday, “oDesk Reaches $1 Billion Spent Cumulatively via its Online Workplace,” the company not only announced its crossing of a key milestone $1 billion in cumulative gross billed revenue since its founding in the mid-2000s (reflecting the ongoing growth and maturation of the online staffing segment), but it also published a range of other very useful, insightful statistics that reflect the on-going maturation of the market segment and where it is continuing to take root in the economy (small and start-up companies).
Passing beyond cumulative billed revenue of $1 billion is no small accomplishment for the platform and no insignificant indicator of industry segment growth (as defined by SIA, the entire Online Staffing segment ($1 billion total in 2012) will likely be growing this year at a rate that exceeds 50 percent, perhaps 60 percent).
That oDesk — which we have judged to be the segment leader in annual gross billed revenues in recent time — has surpassed this threshold is not surprising. Whether any other large platforms of this type are on par with this cumulative contractor billing revenue achievement cannot be definitively confirmed. Freelancer.com has claimed already to have posted over $1 billion of project work on its platform (but is has NOT reported how much of that work posted on its site has actually been billed). Elance’ quarterly reports on various platform stats like contract earnings (including cumulative) suggest that it, too, is nearing this threshold. I was recently told that China’s “witkey” platform, Zhubajie, surpassed the $1 billion mark. Having said all of this, it’s not so important which platform is the first to have crossed the $1 billion threshold; what’s important is that a handful are now reaching this threshold around 2013 (just about 7 years since these platforms got underway).
Clearly, online-platform enabled freelance e-work is has become a well-established trend and an increasingly mature work arrangement model, at least as far as startups and other small companies are concerned.
One of the other statistics reported by oDesk was that “58 percent of businesses hiring on oDesk classify themselves as startups.” It’s known that a very large majority of the businesses that hire through online freelance platforms are small businesses, a segment that has not been a big buyer of other forms of contingent workforce services. But it is certainly important to realize that a large majority of these small businesses are innovative, young companies that are building these “work models” into their organizational DNA, and some fraction of these companies (even if a small fraction) are going to grow rapidly from tiny seeds into some enormous trees.
Although already known, the majority of services procured through oDesk and other platforms is IT-related (though it is also known that other forms of “knowledge work” (marketing, writing, etc.) are increasingly getting handled via these platforms). More interesting, perhaps, is that — at scale — the oDesk platform (and others like it) can perform another function: that of intermediating work arrangements for “long-tail” work (characterized by low or sporadic demand across many companies and, on the supply side, by low, often distributed, hard-to-find, highly specialized workers).
The picture revealed through these and other fascinating statistics provided by oDesk is one that strongly indicates a long, steep growth curve ahead for this online virtual-worker freelancer segment of platform businesses (as both demand and supply have room to expand globally, through job segments, and into larger enterprises—which have just begin to have a taste). It’s very hard not to conclude that this whole segment is very much still very young—perhaps not in its infancy anymore — but still far away from adulthood. And keeping that in mind, we should remember too that the die is far from cast in terms of how this game will play out. However, we can be sure the model of platform-enabled virtual work services (something we coined as “Talent as a Service” (TaaS) back in early 2012) is becoming a mainstream way of how work is arranged and gets done.
To gain access to the Press Release and the other information released by oDesk, click here.