Google recently announced its acquisition of San Francisco-based Kaggle. Founded in 2010, Kaggle describes itself as a platform for predictive modeling and analytics competitions and consulting.
Organizations and individuals may submit projects as contests and set a monetary prize for solutions. Individuals or teams within Kaggle’s worldwide crowd of 600,000 data analytics experts propose solutions, and the originators of the projects select a winner and award the prize money. Kaggle also offers a talent solution that allows organizations to find and evaluate potential hires based on their actual projects and software code. Small to large companies across a range of industries have used Kaggle — including State Farm, Facebook and Google, which used Kaggle extensively before the acquisition.
While one part of the news is Google’s acquisition, the other part is the growing importance of digital platform-based service providers that rely on crowdsourcing.
Google’s acquisition of Kaggle, for an undisclosed sum, makes sense in a number ways:
- First, Google certainly "does" analytics and machine learning, and it has developed a close relationship with and reliance on Kaggle over several years. In this context, the acquisition is likely a match made in heaven (or at the very least in the cloud).
- Second, as my colleague Pierre Mitchell pointed out recently, Google is also acquiring an enormous reservoir of data science talent. Given the serious data scientist talent gaps businesses are struggling with, this a significant coup for Google.
Google is not the first large company to acquire a crowdsourcing platform. Just several months ago, we covered Wipro’s acquisition of Appirio, which included TopCoder. Topcoder, which boasts a crowd of 1 million developers, is a contest platform for software development and data analytics. Also in 2016, Ernst & Young acquired Poland-based crowdsourcing platform MillionYou. Other companies like Deloitte and its Pixel and Cognizant and its crowd-testing platform, have established their own crowdsourcing solutions.
So while not the first, Google’s acquisition is further demonstration that crowdsourcing is an important development that procurement practitioners — and especially those in the contingent labor area — should be aware of.
A Brief History of Crowdsourcing Spend and Talent
Platforms like Kaggle that rely on crowdsourcing can trace their origins back to Amazon introducing Mechanical Turk around 2005. Since then, and especially in the past seven years, various other crowdsourcing platforms have entered the market, including Applause, for software testing; Tongal, for marketing; and Contently, for writing. Crowdsourcing in the consumer product industry is used regularly by top players in the space and has been growing at a high rate. The crowdsourcing platform space has also become mature enough to have multiple players in specific categories (for example, a Kaggle competitor is CrowdANALYTIX).
For some fundamentals on crowdsourcing platforms, refer to our research brief “Clarifying Crowdsourcing: Contingent and Services Procurement Examples, Definition and Analysis.”
It is also important to understand that many of these platforms integrate artificial intelligence and machine learning. For example, Kaggle uses AI and machine learning to breakdown projects. For more on this subject see “Crowdsourcing and Cognitive Computing: Are You Ready for the Future of Work?”.
While digital workforce platforms in general are not a passing fad and show promise to become more prominent in many organizations’ supply bases, at this point those that rely on crowdsourcing appear to be having the most success in terms of recognized value, adoption and growth. Accordingly, the importance of a platform business like Kaggle cannot be assessed in isolation, but rather in a broader context.
Spend Matters Take
With respect to the acquisition, we offer the following observations:
- The acquisition makes a great deal of sense for Google, as it fits into and supports its extensive efforts in AI and machine learning, and Kaggle brings extensive talent into the fold.
- The acquisition also makes sense for Kaggle, which according to industry scuttlebutt, has had difficulty growing its enterprise market segment and, after $16 million in private equity, achieving profitability. Being a part of Google not only provides access to a large enterprise client base but also eliminates a great deal of “supplier risk” and potentially gives enhanced value-add through Google product synergies.
- Finally, Kaggle is another development signaling Google’s interest in the human capital/talent sourcing and engagement space. Cloud Jobs API is another initiative that, Google explains, provides intuitive job search results that anticipate what job seekers are looking for and surface targeted recommendations that help prospects discover new opportunities, using machine learning to understand how job titles and skills relate to one another, and what job content, location and seniority are the closest match for a job seeker’s preferences. For more on this, see our earlier coverage: The Evolving Landscape of Workforce Sourcing: Google and Amazon Arrive.
With respect to the emergence of digital work platforms that rely on crowdsourcing, we would note the following:
- Over the past several years, there are many signs and use cases that indicate that numerous organizations (even large ones) are finding value in these types of platforms.
- Though approaching mainstream status in just a few industries, such as consumer products and IT, these platforms are probably viewed by most organizations as experimental.
- Still, we believe that the value is clearly being proven, and these platforms will increasingly become an important part of an organization’s supply base. Acquisitions such as Kaggle’s will make adoption easier (less risky) for organizations.
- Based on all of the above, contingent workforce and services procurement practitioners should start to become more familiar with these platforms.
- It will also be important to understand that crowdsourcing platforms like Kaggle and others fall within a much broader landscape of different types of platforms that can satisfy different requirements with different models, not only crowdsourcing as such.
For more on a broader category of platforms that Spend Matters defines as “next-generation digital service providers,” some of which rely on crowdsourcing, refer to our recent research briefs:
- Clarifying Crowdsourcing: Contingent and Services Procurement Examples, Definition and Analysis
- Next-Generation Digital Service Providers: The Who, What and Why for Services Procurement (Part 1)
- Digital Service Providers: Do They Require Your Attention and Why? (Part 2).