Spend Matters 50/50: Upwork – A Provider to Watch in 2015

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Upwork (formed through the merger of Elance and oDesk in 2014) is the largest work intermediation platform (WIP) business in the world (based on annualized transaction value, currently running at over $1 billion). The antecedent platform companies were both started as online freelancer marketplaces around 2005, with Elance having had an earlier incarnation as a vendor management system (VMS) solution (its assets sold to Click Commerce, later acquired by Emptoris and then IBM). In 2015, the company took on the name Upwork and announced that it was developing a new platform that would supersede the original platforms.

Though a bit of a simplification, one could say there are 2 major parts of the Upwork business. The first, and by far the largest part, is the “global freelancer marketplace,” which allows businesses and freelancers (mainly knowledge workers), almost anywhere in the world, to match themselves and connect with one another, conduct projects/work activities and complete payments and mutual ratings – entirely online. Millions of businesses and workers have transacted business online in this way, and many small businesses have grown to larger sizes based on their “virtualized workforces” engaged through Upwork. The second, and smaller, part of the Upwork business is called “Upwork Enterprise,” and it positions itself as a so-called freelancer management system (FMS). This is essentially a private platform that allows an enterprise to directly engage, manage and control its own affiliated and vetted population of independent workers.

Spend Matters recognizes Upwork as a path-finding company that has demonstrated that platforms can support work arrangements entirely online and on a very large scale. The company has exhibited ongoing agility and innovation over the past 10 years and is positioned – with its vast network of millions of business users and knowledge workers, its significant intellectual property and human capital, its variety of services and capabilities, and its persistent direction to engage with large enterprise contingent workforce supply chains – to become one of the first WIPs that is accepted as a “direct sourcing” option for enterprises worldwide.

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