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February 15, 2022

BT invests in ‘elastic teams’ start-up Distributed to aid digital transformation

£30m investment in freelance software developer platform will help BT Digital extend its 'internal pool of talent', as tech teams increasingly look at freelance options.

By Pete Swabey

BT has invested £30m in Distributed, a UK start-up that provides on-demand access to freelance software developers, it announced today. The investment will help the telco, which is undergoing its own digital transformation, extend its internal talent pool, the company said.

The news is further indication that freelance workers will form a significant part of the UK’s digital talent pool following the pandemic. The UK’s share of the global online freelance developer community has doubled since 2018, recent data shows, with many leaving full-time jobs as part of the ‘great resignation’.

BT Distributed

BT launched a new digital-focused unit in January last year but has competition for experienced talent in its areas of operation is strong. (Photo by Claudiodivizia/iStock)

BT Digital, a unit focused on digital innovation that the telco set up last year, today announced that it would gain access to Distributed’s “on-demand elastic teams” in exchange for its £30m investment, as well as a seat on the company’s board.

“Our investment in cutting-edge start-ups like Distributed will help us extend our internal pool of talent, accelerate our transformation and help to make BT – and the UK – a key hub for the digital innovation economy,” said Harmeen Mehta, chief digital and innovation officer at BT Digital in a statement.

Distributed provides its clients with remote teams of freelance software developers on a project basis. Developers are “pre-vetted”, the company says, and code is delivered through a “proven delivery and QA process that means all code is peer-reviewed twice before being committed live”.

“Distributed’s service is different from typical freelancer marketplaces offerings, as all team members are managed by London-based technical project managers and quality assurance leads,” according to services giant Capita, which enrolled Distributed into its start-up accelerator scheme.

A spokesperson for BT Digital told Tech Monitor that using Distributed will be a “core part of our operating model” for the next three years. “The external talent we’ll be able to access through Distributed will complement our permanent teams today and in the future,” the spokesperson said. “Distributed will offer us flexibility as well as access to niche tech skills as BT enters into exciting new areas.”

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BT’s digital transformation

BT is currently undergoing a significant digital transformation of its own. The company established BT Digital as a part of a strategic overhaul in January last year.

“The creation of BT Digital will enable us to focus on the areas where we can have the greatest impact, delivering digital platforms that bring together best-in-class services for our customers, and fully embracing new technologies such as AI and machine learning,” CEO Philip Jansen said at the time.

In 2018, the company had announced plans to cut 13,000 jobs and shutter its London headquarters, prompting the Communications Workers Union to threaten the first strike at the company in 30 years. Since then, network infrastructure division OpenReach has announced plans for 5,100 new jobs, but some workers have complained that its plan would force them to relocate.

Like all companies, BT has struggled to recruit staff with the technical expertise in BT Digital’s areas of focus, explains Robert Pritchard, senior analyst at GlobalData. As such, its investment in Distributed make sense, he says. “I’d regard it as a complement to [BT’s] existing base, giving it flexibility and agility on a project-based approach.”

BT’s use of remote freelance software developers to fuel its digital transformation may be a sign of things to come. The latest figures from the Oxford Internet Institute’s Online Labour Index show that more coding jobs are posted on online freelance platforms than any other kind of work.

The index also shows that since 2018, the UK's share of the software developer community working on those platforms has more than doubled, from 1.34% to 3.03%. This growth has been driven in part by the 'great resignation': 14% of recent sign-ups to Worksome, a UK headquartered platform, had left full-time jobs in the wake of the pandemic.

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