Cornerstone Acquires SumTotal For $200 Million
Today was a pretty iconic announcement: after decades of investment, Skillsoft decided to give up on the LMS market and sell SumTotal Systems to Cornerstone for $200 Million.
While I don’t have any details on the deal yet, this pretty much ends the innovative phase of the Learning Management Systems market, clearly marking a new era.
SumTotal Systems is the combination of many older technologies: Click2Learn, Docent, GeoLearning, and dozens of other smaller companies. Over the years this company (I was actually involved in the selection of the name) became a holding company for many LMS technologies, constantly reinventing itself as corporate training evolved.
Despite many great efforts by Vista Equity and then Skillsoft, however, the technology stack is old and the LMS market has moved on. Companies no longer really want their LMS to operate as an employee-facing system and new platforms like EdCast (also owned by Cornerstone), Degreed, and Microsoft Viva Learning are taking over.
These new platforms are all skills-based systems, and now include vendors like Gloat, Eightfold, Hitch (now owned by ServiceNow), LinkedIn (LearningHub), and modern vendors like Docebo, Workday, and others. The traditional compliance-based LMS market, which SumTotal pioneered, has simply become a feature set of back-office software.
Interestingly, Cornerstone, which is now owned by a PE company, wants this recurring revenue. So in addition to acquiring Saba, Lumesse, Halogen, and other legacy talent platforms, the company will now own the recurring revenue from SumTotal. SumTotal has some large clients (airlines, some oil companies) so this makes financial sense.
If you’re a SumTotal customer, this is probably good news since you now have a focused technology provider as your vendor. For people looking for new learning technology, it’s more or less a non-event. Except for the fact that Cornerstone as a company is becoming more and more of a legacy technology provider. And this lets Skillsoft invest heavily in Percipio, its world-class learning platform.
I have high hopes for Cornerstone’s investment in EdCast, and look forward to sharing more as time goes on.
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