The Future of Consolidation in Global Work Marketplaces as Buys vWorker/ RentACoder

By | November 26, 2012

How far will consolidation go in service marketplaces?

The state of service marketplaces
Service marketplaces – exemplified by platforms such as Odesk, Elance, and – comprise the most prominent space in the crowdsourcing landscape, with over $1 billion in work done over these platforms to date.

In Chapter 16 of Getting Results From Crowds Second Edition (Chapter 13 in the First Edition) we provide a table comparing the five largest service marketplaces. The 3 largest platforms, mentioned above, are compared, together with vWorker and, which are considerably smaller. UK-based People Per Hour has risen rapidly over the last few years to be positioned immediately behind that group, with a number of other niche players beyond that.’s acquisition of vWorker
Last week announced the acquisition of vWorker, which it will immediately merge into the main site.

From the beginning was designed as a roll-up, starting with the acquisition of Swedish platform in 2009, followed by numerous others, notably including Scriptlance, LimeExchange, and Clearly its intention is to continue down that path.

vWorker was originally established in 2001 as RentACoder, focusing on software developers. It rebranded and diversified its skills base to other categories in 2010. I used RentACoder numerous times and found it offered good talent and innovative processes.

Future consolidation in service marketplaces
One of the very interesting questions, and one which could have a significant impact on the future of work globally, is the degree to which the service marketplace space consolidates.’s acquisition of vWorker maintains the leadership trio, together with Odesk and Elance., once a major player, appears to have been continuing to lose ground relative its competitors, though it is interesting that PeoplePerHour has grown healthily through and from its initial focus on the UK market.

The acquisition of vWorker puts significantly in the lead in terms of numbers of freelancers, however its average transaction size is substantially less than Odesk, which leads the market by dollar volume. Elance is a significant player on both fronts.

There are two major plausible scenarios from here.

Just as eBay emerged some time ago as the one dominant product auction marketplace globally, it is possible that we see consolidation in service marketplaces to end up with one obvious dominant player. As a two-sided marketplace, there are advantages to both sellers and buyers in shifting to the deepest market. Market dynamics in other online markets suggest this is a quite feasible outcome, however it may take some years to pan out.

The other reasonably likely scenario is that we get a group of 2-3 leaders, followed far behind by a few niche players. Because demand for services is often focused on particular skill sets, it is possible for more than one generalist platform to succeed, with relative strengths of platforms becoming more evident. The other issue is that if skill pools are sufficiently deep within a market, there may not be a need for consolidation, as buyers will always have sufficient talented workers to draw on.

Challenges for specialist marketplaces
Certainly it will become significantly harder for specialist marketplaces to succeed, as the generalist marketplaces will usually have more depth than even a successful niche player can attain. There is the potential for geographic and language-based platforms to emerge, though’s move to function across 10 languages, and similar moves from other major players, suggest that these spaces may also be hard to move into.

The future of distributed work
There is no question that today’s service marketplaces will develop into major factors in how work is done globally. The degree to which the marketplaces consolidate will play a significant role in the nature of the emerging global work economy, and also shape the landscape for individual workers. It will be fascinating to see how this plays out.

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