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Summary:

There is a new workplace infrastructure, and it has moved out of the office and into the cloud. The human cloud lets SMBs and enterprises hire top talent, reduce overhead costs, and use online technology to assemble and manage teams to work done.

Lukas Biewald and Fabio Rosati

There is a new workplace infrastructure, and it has moved out of the office and into the cloud. The human cloud — the virtual workforce — lets SMBs (small and medium businesses) and enterprises hire top talent, reduce overhead costs, and use online technology to assemble and manage teams and get work done.

According to Fabio Rosati, president and CEO of Elance, who spoke alongside Lukas Biewald, CEO and founder of crowdsourcing labor site Crowdflower at GigaOM’s Net:Work conference, the human cloud provides the benefits of a workforce without the friction: no concerns about geography, instant access to the right talent, and the ability to hire-on demand and perform “labor arbitrage.” Over a thousand people are hired daily on Elance’s online marketplace and system for workers and work, with hundreds of thousands of jobs posted annually. Hundreds of millions of dollars worth of hours being billed through Elance alone, and Rosati predicts that this number is heading into the billions in short order.

With the human cloud at the ready, companies “don’t have to predict capacity,” said Biewald. Companies can “turn on and off people” like they’ve been able to turn computers on and off, hiring someone only when needed for what is needed, even if for just a few hours at a time.

One of the biggest changes working with the human cloud is trust. Rosati attributes the sophistication of technology as a contributor to what is perceived more and more as a secure method of work. Biewald’s company Crowdflower is seeing their customer base quickly expanding from smaller startups to much larger companies, with the most rapid changes occurring in just the last six months. Companies are trusting the human cloud.

Rosati is already seeing a hybrid model in enterprises combining both on-site teams when appropriate and tapping into the cloud when needed. Companies will be going through the steps of trying it out, learning from it, then seeing how far the model can be pushed. And more workers like the model, says Rosati whose company surveyed workers and found that 70 percent prefer working independently online over traditional full-time employment.

What does the future bring for the human cloud for the enterprise? Rosati predicts greater regulation in 2011 for cloudworking because as more and more larger companies adopt the virtual work model, they’ll demand it.

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