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05.16.14 | blog
Author: Jared Fletcher

Is Crowdsourcing a Result of Cloud Computation?

With the continued push into an entirely digitized era, companies are embracing cloud computing to enhance their business operations. Yet, most executives are still grappling with the question around how to virtualize their business processes and respective people, while generating innovation. For the last decade, the idea of cloud computing has been a part of business conversations, with debate over whether the unknown applications were effective; in fact, at first, cloud computing was not proven successful and many people discounted its potential. In the last few years cloud computing has become mainstream, forcing executives to look back and question their everyday business processes. Not only does cloud computing and crowdsourcing (i.e. the people piece of the equation) increase utilization rates, but they also decrease operational costs, as workload balances are consolidated, there is quicker provisioning and deployment, and enhanced resiliency and availability.

Cloud computing itself is innovative – a new business model and industry disrupter. Consider this example, since 2006, Netflix has been a crowdsourcing innovator, offering $1 million to any group of people who developed a better algorithm for recommending movies to users. After analyzing results from 40,000 groups in 186 countries, a group of seven mathematicians and computer engineers were able to crack the code, developing a software that had an accuracy rating 10% higher than Netflix’s original software. Through maintenance of their technology and people in the cloud, Netflix was able to allow groups insight into their algorithms and operations to better understand the business processes to develop the software. In fact, three years ago, Netflix decided to develop an open source software strategy, where their business operations are held entirely in the public cloud to set a standard of best practices for other companies looking to host their processes in the cloud. In other words, Netflix has allowed the public to understand how the most successful video streaming website is run. This open source approach fosters collaboration, allowing developers, as well as the public the chance to come together and help develop ideas for other Netflix crowdsourcing initiatives. If there’s one thing Netflix does really well, it’s understanding the user, what they want and how to provide it. How do they truly achieve this? Crowdsourcing.

The important take away from this example is that Netflix could never have achieved this level of innovation without the 40,000 groups of people from across the globe that came out to help achieve a common goal. Motivated by the prestige of winning the challenge, polishing their reputation, and the large sum of money, the crowd delivered results, amplifying Netflix’s business operations for a relatively inexpensive cost. The alternative being, spending much more than $1 million to have internal software engineers and developers create the prediction algorithm, which could have taken much longer than three years, considering the expanse of the teamwork.

Basically, the benefits of crowdsourcing in the cloud are invaluable.

Crowdsourcing provides on-demand talent. Adding a few extra employees to your team may increase your work capacity, but it will come at a significant, fixed cost. Crowdsourcing is a cost effective solution, allowing organizations to distribute and solve problems, tapping into a virtual pool of talent that can be utilized whenever needed.

Innovation is consumerized. Similar to the consumerization of technology by cloud computation, crowdsourcing has consumerized innovation. Enabling two-way fluid communication between organizations and their crowd, businesses are able to understand market viability and consumer insight as the result of a partnership with the crowd.

Similar to the Netflix example mentioned above, by allowing customers to take part in innovation, your organization will see a significant return, garnering input from the people that determine your success – your customers.  

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