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Managing the Human Cloud

First came outsourcing of IT and business processes. Next came offshore outsourcing. Now comes the human cloud. A third-generation sourcing ecosystem already being used by companies as diverse as Rief Media and Aegon, the human cloud is centered on an online middleman that engages a pool of virtual workers that can be tapped on demand to provide a wide range of services to any interested buyer.

Although jobs involving content generation, sales and marketing, and design and optimization currently top the list of tasks that can be performed by cloud workers, a recent industry report identifies at least 15 major labor categories that could be sent to the human cloud.

The human cloud is growing rapidly. Year-over-year growth in the global revenue of human cloud platforms was 53% for 2010 and 74% for 2011. The number of platforms and middlemen has also skyrocketed. Using a narrow definition, we counted more than 100 active platforms in 2012, up from perhaps 40 in 2011.

Some analysts see the human cloud as potentially more disruptive than the previous two sourcing waves. They believe it will reshape established business processes, redraw organizational boundaries and — most importantly — profoundly change global labor markets. However, the road ahead could very well be bumpier than these analysts believe. As with the past waves of outsourcing, harnessing the power of the human cloud will require the evolution and adoption of a new set of best practices and structures by the key sourcing stakeholders — the buyers and the suppliers.

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