Degreed Acquires Adepto: The LXP Showdown Begins

Today Degreed, one of the leading providers of Learning Experience Platforms, announced its acquisition of Adepto, a London-based provider of contract and gig work systems. The company positions itself as providing a “total talent” platform, because they help companies manage the ongoing shift from “jobs to work” and what I often call the new “Pixelated Workforce.”

It’s interesting that Degreed decided to get into this market, because it’s an emerging fast-growing space. Some of the vendors focused on this space include Workday, Gloat, Fuel 50, ADP (Workmarket), and new entrants from Phenom People and Avature. As companies become more focused on the “gig nature” of their jobs and work, the need for these “talent marketplace” systems will grow, so Degreed sees a big opportunity here.

I just finished meeting with Degreed and the company has been very successful (growing at 100% per year, expecting to be over $100M in revenue by the end of 2020). Degreed has effectively “defined” the Learning Experience Platform space, and sees itself becoming “The System of Record for Skills” for their clients. This acquisition, which brings gig jobs and project work into the platform, helps move the company in this direction.

The Evolution of the LXP Market

The LXP market has been explosive, and its role is changing fast. Initially designed as an intelligent portal to search and find content, today the LXP is a real “Learning Portal” that lets people find content and courses, create and activate learning paths, assess your skills (Degreed has pioneered this in its Skills Certification engine), and match learning and skills to jobs and career paths. In other words, 

I just visited one of Degreed’s largest clients (a large bank) and they have seen an exponential increase in learning from Degreed. In fact, the company shared with me that almost 3/4 of their employees have logged in, and many are using the system multiple times per day. So why would Degreed buy a gig work management system?

The reason is simple:  while buying and LXP is easy and these products add a lot of value, getting the platform to drive deep skills and capabilities takes more. Once you start piling content into the platform you find that all content is not equal. Some simple things (an article) are easy to find and consume. Other things (courses, multi-module learning programs, cohort-based programs) are more complex, and the LXP becomes more like a portal. 

What this means is that LXP platforms, by their very nature, are missing functionality. They are fantastic places to search and tag things, create linear learning paths, and crowdsource the content and skills in demand. They aren’t a place to “learn” – so companies end up buying lots of other systems (NovoEd, Linkedin Learning, Skillsoft, Bersin Academy, etc.) which have entire learning experiences of their own. So to some extent there is a competition for “where the learning happens.”

Right now the market is dominated by two fast-growing players (and many more coming) – Degreed and Edcast.  Cornerstone, Percipio, Valamis, and soon LinkedIn are also selling these platforms, and one could expect Workday, SAP, and Oracle to build or buy one as well. EdCast has decided to go in a different direction, and is now becoming a “learning in the flow of work” platform that includes plugins to every other system (Teams, Slack, Salesforce), a digital adoption tool, and technology that lets you integrate all your content into Google itself. 

Where Degreed Is Going And The Vortex They Are Entering

I know the Degreed and Pathgather folks well, and their mission is to help companies assess and develop skills. They do this by focusing on the skills themselves, enabling companies to build out their LXP and then immediately see which skills are trending up, which are trending down, and where more development is needed. This is a hugely important problem, and they play an important role.

Their vision for the future is to add “projects and assignments” to this strategy. As you all know well, nobody learns just from a course – you really learn by “doing it.” So if you can find a “project” to match with your new skill, you can really reinvent yourself. That’s Degreed’s vision, and I agree with it 100%. (Read about the Full-Stack HR Professional as an example.) The problem, of course, is that most companies don’t have “projects” stored anywhere at all, and the level of infrastructure and investment needed to build all these “projects” and “assignments” and “journeys” is big.

Enter the Talent Marketplace, which I wrote about a few months ago. Companies like Schneider Electric, Unilever, Verizon, and just about every HR department I talk with are now trying to figure out how to build more facilitated talent mobility and gig work inside the company. And that is where Degreed wants to go.

The only challenge with this shift is that Degreed will now compete with a lot of well-heeled players. Not only does Gloat and Fuel 50 have a head start, but companies like Workday, ADP, and vendors like Avature, Phenom People, and others are also going there. These companies have skills matching technology too, and can also injest, index, and match people to jobs from the applicant tracking system. 

I’m not saying Degreed can’t do this, but they’ve now stepped into the talent management market and will be competing with some of their partners.

I believe the future of “Talent Management Systems” is here: it is this new world of job matching (ATS) connected to learning platform with mobility, assessment, and ongoing skills development in the middle. The Talent Marketplace IS the new talent management system, and that’s what companies like SuccessFactors and Cornerstone and Workday now understand.

Degreed is a well-run company with a tremendous vision. Will this stretch the company too thin and entice them to drift from their learning roots? Or will they turn into a true talent system of record? Let’s see where this goes, I’ll make sure I keep you up to date.

By the way, later this month we are publishing the HR Technology Marketplace 2020 Report, the results of an entire year of research on this space.. Stay tuned it’s coming soon! (Sign up here to get on the mailing list.)