The LMS Market Remains Hot with PeopleFluent Deal (but not as hot as Facebook)

The LMS market remains very hot, and so does Facebook (below). Comments on both.

This week Peoplefluent (a $100M+ talent management software company, built from the combination of Authoria and Peopleclick) announced the acquisition of Strategia, a small but very successful enterprise learning management systems company. Strategia was a Canadian enterprise LMS company with large clients like Bombardier.

What this acquisition shows is two trends in the market. First, companies no longer want to purchase talent management software from multiple vendors – so Peoplefluent found that its customers and prospects were demanding an integrated LMS.

Second, it points out the continued growth and health of the learning management systems (LMS) market. While not every LMS vendor is growing at the same rate, vendors like Taleo, CornerstoneOnDemand, Saba, SumTotal, Meridian, Certpoint, Oracle, and SAP all report growth in their LMS businesses. We have not resized the market for 2012 quite yet (it is very close to $1 billion), but I would venture to say we will see a good 10-15% growth this year. And this does not include the new business being generated by companies like Blackboard, Wisetail, Litmos, Adobe, Citrix, Skillsoft, and all the new startup social learning platforms.

As we have talked about for years, the learning management systems (or “learning platform” market) is very big and continues to grow. New applications like extended enterprise training (training of customers, resellers, channel partners) and resale of electronic content (companies like The Economist who are launching new e-learning offerings) is growing even faster than the corporate market. And the need for easy-to-use, dynamic, highly personalized electronic content is accelerating due to the growth in mobile platforms like the iPhone, Android, and iPad.

Some day the corporate LMS market and the market for electronic books will further converge, and some vendors are moving in that direction… and right now nearly every vendor is building in new social features, mobile device support, and further features for customization and personalization.

It’s a good time to be shopping for (and selling) learning platforms – and with the training spending up by 11% this year (read the just released 2012 Corporate Learning Factbook for more), we expect this market to continue to accelerate in 2012.

LMS Market vs. Facebook

Now about that Facebook IPO. The times are a changin.  $3.7 billion in revenues, $1 billion in profit, $1 million of revenue per employee, 850 million user accounts, 450 million daily users.  And… 12% of revenue in 2011 came from Zynga the online game company. Facebook is a money machine.

The surprises here:

* The revenue and profit model for a company like this is like no other. The social graph creates orders of magnitude more value than a linear “user” based business model, if you can sell advertising.

* Games are much bigger than we even dreamed. When 12% of Facebook revenue comes from silly online games (like Farmville), that tells us how desperate we all are for games.  I know that in my particular case I play Words with Friends, ShapeShifter, and Flight Control whenever I want to relax. I think the rest of the world does too.

From the standpoint of the Learning & Development market – think more than ever about building and using the social graph in your own organization, and bring gaming and gamification to every L&D program you can.

PS.  Come to IMPACT 2012, April 10-12 in beautiful St. Petersburg Florida. The conference will sell out and we will discuss all these issues among 450 of your senior peers.