Day: October 2, 2012

Crowdsourcing: The Cloud Computing of Business Practices

Crowdsourcing, the business practice of submitting tasks to or soliciting advice from the general public, has drawn a lot of interest lately. The “crowdfunding” website Kickstarter, for example, may be the most talked-about new company, having been featured in all the major publications like the New York Times, the Wall Street Journal, and Businessweek.

Crowdsourcing possesses definite financial and cultural value. A business can get tasks done more efficiently and for less cost with it. Crowdsourcing lets people contribute to the economy that would otherwise be idle, out-of-work, or over-protective of their ideas or money. It reinforces the “wisdom of the crowd” and “the customer runs the business” philosophies of social media. Some people might interpret from all the attention that crowdsourcing has received that it has replaced cloud computing as this era’s “game-changer” or most disruptive technology or business practice. But crowdsourcing and cloud computing are actually just the same approach to two different areas of business—nothing is novel or groundbreaking about the idea or the activity of crowdsourcing.

The developments of crowdsourcing and cloud computing were both caused or motivated by the limitations of the preceding business or technological models. For instance, before the cloud, companies had to purchase and manage their own on-site IT infrastructure hardware. When business was slow, most of a company’s computing resources (the processing power of its servers and the memory of its storage devices) would remain idle or unused. Conversely, the company’s on-site IT infrastructure would probably be overwhelmed once business picked up. But a cloud-based IT infrastructure does not require any new hardware purchases and has the flexibility to add or subtract computing resources on-demand.

On the other hand, a business that does not use crowdsourcing would have to hire a full-time, part-time, or contract employee to perform all of its operations and projects. With this model, about 90-95% of the company’s work will be completed in an efficient way. But 5-10% would either be too sophisticated or too simple to be done efficiently with internal workers. With crowdsourcing, a company can complete this 5-10% of work without diverting any of its own personnel and resources and without overpaying for either high- or low-level contractors.

The Netflix algorithm contest is a famous example of high-level crowdsourcing. In 2006, Netflix offered $1 million to anyone that could improve the accuracy of its movie recommendation system by 10%. Freakonomics co-author Steven D. Levitt praised the company’s decision on his blog, writing, “They could easily spend $1 million internally hiring some programmers or Ph.D’s to try to improve their algorithm, with uncertain results. Instead, by making it a contest and offering up data to outsiders, they will probably succeed in having 100 times as many person-hours devoted to the problem for the same price.” At the other end of the spectrum, sites such as CrowdFlower and Mechanical Turk pay online workers as little as $.01 per task. These are jobs—organizing a database, transcribing audio, performing basic research—that a computer cannot do, that a well-paid employee would rather not do, and that a manager would consider wasteful of their employees’ time and labor.

While crowdsourcing and cloud computing both developed as a result of the inefficiencies of their predecessors, they also both create efficiency by increasing the productivity of people (the crowd) and servers (the cloud); they both let any person participate regardless of location; and they can both be temporary. For example, whereas a company would normally have to purchase its own hardware (utilizing about 20% of the server at any given time), cloud computing lets an individual server support the IT infrastructure of multiple companies (utilizing 100% of the server’s resources at all times). A cloud-hosted infrastructure can be accessed via the Internet from anywhere, not just from a workstation connected to an internal network. Also, because of the cloud’s on-demand and flexible architecture, cloud-based solutions can be deployed or uninstalled within seconds.

Likewise, in the same way that cloud computing turns underutilized hardware into fully-utilized virtualized servers, a lot of crowdsourcing sites let people do something productive with their normally-squandered spare time and money. A profile by Salon writer Katherine Mieszkowski of a frequent user of the lower-end crowdsourcing website Mechanical Turk partly explains why anyone would want to do anything for $.01: “Curtis Taylor, 50, a corporate trainer in Clarksville, Ind., who has earned more than $345 on, doesn’t even think of turking as work. To him, it’s a way to kill time…Taylor travels a lot for business and finds himself sitting around in hotel rooms at night. He doesn’t like to watch TV much, and says that turking beats playing free online poker.” In addition, most crowdsourcing work can be done remotely. Crowdsourcing websites are also designed to be flexible: crowdsourced tasks can quickly be posted or taken down.

Looking for a low-cost way to for your business to perform restrictively simple or sophisticated tasks? Go to the crowd. Looking for the most cost-effective and reliable way to host your IT infrastructure? Go with an IronOrbit Private Cloud. Our Virtual Desktops are fully scalable and therefore capable of supporting businesses of any size. With our advanced Orbital Security System and 100% Uptime Guarantee, a business’s files and applications will always be secure and available.