The War for Corporate Learning Platforms Gets Hotter
The market for corporate training and education (including onboarding, leadership development, and compliance) is well over $240 billion around the world, and as much as 14% of this goes into technology. A variety of small and large companies are chasing this $20+ billion market and the war is hotter than ever.
At the core of this market is the 20+ year old learning management system. These platforms, which were created as the system of record for training administration, are vital. Companies need these systems to administer, track, and report compliance – so they are not going away. Once considered a key employee-driven system, however, they have now become “systems of record,” so their strategic value has dropped. And as new systems that take over the learning experience grow, the LMS market is under attack.
The hottest new part of the market are Learning Experience Platforms (LXP), which I believe I named about four years ago. These are intelligent learning portals that use a variety of approaches to making all forms of learning content (articles, videos, courses, podcasts) easy to find for employees. Once considered a layer that sit on top of the LMS, these are now becoming integrated systems of record too. The two biggest players in this market today are Degreed and EdCast, but many more (Instilled, Valamis, Percipio, Cornerstone) are growing also.
Degreed, the company that has grown the fastest, acquired its smaller competitor Pathgather and recently acquired Adepto, moving into the market for talent mobility and integrated talent management. EdCast, by contrast, has moved into the market for enterprise knowledge and skills management, releasing a variety of features to integrate the platform into Microsoft, Salesforce, ServiceNow, and other workplace environments. Both are growing at double-digit rates and have a large market opportunity ahead.
Both understand the need for LMS functionality, so both are building out LMS features as well. Just as Cornerstone and Skillsoft moved from LMS into LXP, both Degreed (through their relationship with Learnupon) and EdCast (through their acquisition of Leapest) are getting into LMS functionality quickly. Why? Because customers just don’t want two systems of record.
Remember, also, that LXP platforms are not “content” systems at all – they sit above the content. So there is a new breed of LXP coming, which is best exemplified by Instilled, which lets you publish and index video, transcribe and translate content, edit, coordinate, and amplify video and slides – all within the LXP. Companies like Shell and Comcast use these types of platforms for an entire Capability Academy of self-authored learning. (This is the type of tech Microsoft is now embedding into Teams.)
Not to be left behind, Workday, SAP, Oracle, and Microsoft (LinkedIn) are also entering the market. Workday’s new Skills Cloud (which I will write about separately) is an aggressive new technology that could upend the market completely by embedding intelligent skills inference into everything you do in Workday. SAP is now partnering with Percipio, and has a robust LMS and wide variety of learning tools (SAP Jam and EnableNow) of its own. Oracle is building its own new learning platform. And Microsoft (LinkedIn) announced they are also building an LXP. With Microsoft’s massive success with Teams (and Project Cortex) I believe Microsoft could eventually become one of the biggest players in the market, but that is yet to come.
Among smaller companies, there are some other very important players.
NovoEd, a company that started as a MOOC platform at Stanford, is becoming an industry standard for what I call “program management” platforms. These systems, along with vendors like Nomadic (the company I work with for the Josh Bersin Academy), Fuse Universal, 360 Learning, CrossKnowledge, Bridge, Intrepid, D2L, and content providers like EdX and Udacity, offer end-to-end platforms that manage entire learning programs. This part of the market is hugely important, because without these program management features there is really no “place to learn.” The LXP will get you to the content, but it doesn’t facilitate your real learning experience.
I believe these program management systems are becoming critical to the future because they are the core of your Capability Academy, which really makes up the core of deep skills development. So I expect these vendors to continue to grow, and eventually may be acquired by others.
Surrounding these core systems there are a massive number of other tools as well. Vendors like STRIVR Labs (the leader in immersive learning and VR), Filtered Magpie (the leaders in learning search), and a wide variety of tools for video management, assessment, and content development continue to grow. In my last research study I found that the average L&D department has 22 different vendor platforms, so all these matter to a degree. While off the shelf content is a huge and growing market, your ability to build and deploy internally authored programs is still the most important thing you do.
On the core LMS side, the market has not slowed down at all. SAP, Oracle, Workday, and Infor all have home-grown LMS platforms, and each is evolving rapidly each year. In many ways the future of the LMS is “embedded into the core HR system,” so I would not be surprised to see this market become integrated into ERP in many large companies. (SuccessFactors HXM, for example, will be a pretty impressive learning platform based on what I saw recently.)
That said, there are a vast number of learning features needed in the LMS (managerial approval, resource management, development planning, competency management, compliance reporting, certification, badging, e-commerce, training credits, and more) so there will always be third party vendors. So I suggest companies use the LMS they have, and just negotiate the best price you can so you can spend money on the “experience” layer systems which are more important to end-users.
In the early days of the LMS market companies like Saba, SumTotal, and Plateau essentially took over the market and created a category for others to follow. Today the learning platform market is so big and broad, it’s hard to find a vendor with the market power and vision to be called the “leader.” In fact I talk with many vendors who believe they can “lead” in this market, and I usually advise them “just go out and find your niche, the market is big enough for many good companies to grow.”
Where is all this going? We are going to release a new Josh Bersin Academy program in 2020 to help you understand the learning stack, but in the meantime let me give you a few insights.
- Vendors like Degreed, EdCast, 360 Learning, NovoEd, and big vendors like Workday and Microsoft are becoming very important. You really have to select an LXP, a program management platform, and an LMS that scales and fits your needs.
- VR and Immersive Learning have the potential to change the landscape. STRIVR and others (even Microsoft) are reinventing how we interact with content, and they are platform companies too. I urge you to do a pilot or more in this area in 2020, you’ll be surprised how robust this solution can be.
- Today you have to focus on “learning experience design,” which essentially means selecting tools that employees love to learn. I think Degreed and EdCast’s success has been their simple, YouTube-like interface, which is just familiar to your employees. New products like Docebo (next-gen LMS and AI-based learning platform), Bridge (from Instructure), Percipio (from SkillSoft), Fuse (one of the best video and social learning platforms I’ve seen), and NovoEd will dazzle your employees. You should look at them and see which one you like, and pilot them with employees.
- Think about Learning in the Flow of Work as a serious effort, and look for products that seamlessly plug into your other systems. I do believe we are not far away from a world where a learning recommendation will “pop up” in Outlook, Salesforce, Teams, or Slack, whenever you need help. Our Josh Bersin Academy plugin to Microsoft Teams, for example, lets you “ask the JBA” any question you want about HR. That type of interface is working and available now, so depending on what productivity tools you have, make sure these integrations are in your plans.
- Don’t get overly enamored with content libraries. They’re great to have, but they don’t move the needle as much as you may hope. I often consider them the “flea market of learning,” lots of stuff to buy, but you do have to shop around (ok maybe “supermarket of learning” is a better analogy). I would focus on the key content providers you need for your Capability Academy, and then find the libraries that your employees like, and use tools like GO1 and OpenSesame to find the most useful content ou need. I’m doing an analysis of content utility with the folks at Filtered, and we’ve found that off the shelf-content is considered significantly less “useful” than programs you build yourself.
- Buy an LMS from a company that understands your future. There are more than 200 LMS vendors out there, and I think they fall into two categories. Those which are robust, full-featured systems often embedded into your core HR system. And then the smaller, more limited vendors that specialize in certain markets and niche industries. Before you decide where to put your energy, decide if the vendor seems to understand your particular needs. If they do, they’ll likely grow in the direction you want.
Over the next few weeks, I’ll to dive into these vendors in more detail, and give you lots of case studies to read about. In the year ahead, as reskilling and upskilling continue to grow, this market will be more important than ever. Just stay out of the middle of the war and you’ll find yourself well equipped along the way.