Bringing global IT skills to SMBs

Microsoft, Yahoo and several other top vendors are making it easier for small and mid-size companies to hire specialized IT consultants located anywhere in the world by working with providers of online employment marketplaces that use eBay-like features to match workers with employers.

Mountain View, Calif.-based Elance Inc. announced today that it is working with several companies to list the specific skills needed to work with their products, while rival oDesk Corp. in Menlo Park, Calif., says it also has a similar agreements with multiple vendors.

Elance and oDesk both provide a means for businesses to hire workers, especially in IT, and pay them either for a project or at hourly rates. The freelance workers must take tests to prove their skills, and are also subject to eBay-like customer satisfaction ratings. Their increasing relationships with vendors raise the possibility that global competition for IT work is expanding down to the smallest of businesses.

The consultants available through the online marketplace can be located anywhere in the world — the U.S., India, Eastern Europe and so on. The services are delivered virtually via cloud platforms created by Elance and oDesk. Ths services enable businesses of any size to tap into a global labor pool to find the skills they need at potentially competitive rates.

“We think this opens up a whole new market for small business customers to get the help they need,” said Michael Schultz, a director of product management and marketing at Microsoft, during a press briefing this week organized by Elance.

Unlike larger firms, “small businesses have never really had much leverage or leeway to be competitive with their bids,” said Schultz. He said small businesses needing help with Microsoft platforms typically seek technical expertise locally . They often have trouble finding the right skills for their job or a competitive price for the work, he added.

Whether the vendor's support for the online marketplaces are a sign that globalization will filter down to the smallest businesses remains to be seen.

The increasing use of H-1B visas has brought globalization, at least in part, to mid-size firms via niche IT contracting shops that utilize foreign expertise. Large companies have always had the ability to tap offshore talent, whether through Indian offshore firms like Infosys, or though large U.S.-based vendors like IBM, which operates large offshore development operations.

Elance says about 61% of its providers are based in the U.S., and oDesk said its providers are roughly split in thirds, between Asia, Eastern Europe and the U.S., although it said the U.S. was its fastest growing provider base.

One reason the technology vendors are working more with companies like Elance is the emergence of cloud platforms hosting development tools and/or applications, said Fabio Rosati, the CEO of Elance. User companies need to find people who can work on the specific virtual platforms created by individual vendors, he said.

The vendors have control over their technology platform group and determine admission criteria to vet the skills levels needed. The vendors “wanted to control who is in the group,” said oDesk CEO Gary Swart.

Both Elance and oDesk are private and highly competitive and both claim to be the largest and have different metrics, such as size of project and approaches for measuring their size. Regardless of the claims, each firms lists thousands of jobs — nearly 27,000 on Elance, and almost 13,000 on oDesk — and have been growing in the recession.

Among Elance's partners are eBay Inc. unit PayPal, Adobe Systems Inc., Palm Inc., Facebook Inc., Sun Microsystems Inc., Yahoo Inc., American Express Inc., and Salesforce.com. ODesk's list of partners include Yahoo, Facebook, Sun, RedHat, Intuit and others.