A “Choppy” Market with momentum……..but as we move into 2014 we are filled with optimism for the e-learning market and Learning Light will be publishing their 4th UK and European e-learning market report in the second quarter of 2014. In the meanwhile below you can find details of the 2013 publication “e-learning lessons for the future” – a global investment review published by IBIS Capital with “subject matter expertise” from Learning Light.
While we become increasingly optimistic about the e-learning market…..it is by no means a smooth sailing experience, it is still market with a few crests and troughs!
This 100 page report provides an industry overview,explains the key market factors, looks closely at market trends, offers insight into e-learning innovation, looks at Mergers and Acquisitions and valuations and presents an exceptionally well researched view of the future.
Its is made up of the following sections:
- Introduction to e-learning
- Education trends and the Adoption of Technology
- e-learning subsectors:
- Content
- Management systems
- Distribution
- Pearson case study: a Leader in education
- Valuation and the M&A Activity
- Buyer Landscape and the Strategic Rationale
- IBIS Capital’s lessons for the Future
Summary
In November 2010 Learning Light produced its third report on the state of the UK e-learning market, and indeed provided a snap shot analysis of the European market as well.
The report has attracted considerable interest, and we thought it opportune at the half year point to offer an update as to how we see the market developing, and indeed in response to the ever growing requests for our views on 2011.
Our research put forward reflects a mid year update of the UK market only, based on our forecasting model with inputs from the overall economic performance of the UK, rises in adoption levels of e-learning, close tracking and analysis of public sector procurement patterns, and of course conversations and observations of what is happening in the market.
In January 2011 we observed Learning Technologies and were impressed by the vibrancy and energy of the market.
At the mid year point we remain cautiously optimistic to the markets performance. Yes we have seen ups and downs – the sad demise of Peakdean for instance, but the innovation and development of new products and services continues to impress us.
In this interim snapshot report as we have undertaken our research interviews we have attempted to discover some less well known organisations as we have continued to explore this fascinating industry as well as the technologies that have impressed us so far in 2011.
In short we sum up the market as choppy.
Our thanks go to Creative Sheffield and Webanywhere Ltd for supporting this research.
A PDF version of this report for download will be made available shortly.
Market Growth
We have conducted research with 12 companies for the half year update – 33% of our sample for the 2010 full year report.
Companies reported a mixed picture, with a still “choppy” market, but one that was felt to be maintaining momentum. It was commonly felt that April was a poor month, and economic uncertainty was dampening actual demand.
However, enquiries and interest levels were continuing to grow in number, which augurs well for the future.
Based on an extrapolation of trends from our 2010 research, the continuing uptake of e-learning in the corporate market, with a bigger share of training budgets being allocated toward e-learning, and the increasing interest we are witnessing from a number of organisations seeking to commence e-learning programmes, and finally a more positive outlook for government expenditure on e-learning we forecast growth of over 12% in 2011.
Our most optimistic forecast would put the market value at £544 million for 2011, over 13% growth year on year.
What appears most pleasing and encouraging is that public sector procurement has held up to levels higher than we anticipated. We track 3 CPV codes and quarter 1 of 2011 (the last quarter of the financial year) showed good levels of activity. Indeed in Q1 we tracked 32% of the total number of opportunities placed in all of fiscal year 2009-2010. The e-learning message must be recognised by the public sector.
In calendar 2010 there were 31 OJEU UK procurements for the CPV “e-learning services”, in 2011 to date (end June 11) there were 21 OJEU procurements for e-learning services.
This reflects a still strong procurement pattern into the new financial year.
Trends
What are the underlying trends that we believe are driving the market forward:
An invigorated and expanding LMS market
The Totara – Moodle continuum is undoubtedly driving market up take.
The solution(s) offer either a very effective tactical and practical launch platform – ideal for compliance and induction in the case of Moodle, or in the case of Totara an enterprise standard LMS with most of the required features to allow effective Learner Management.
Totara is not without its critics and does not pretend to offer the full solution provided by many of the larger LMS platforms, and has some way to go to add the full suite of functionalities of enterprise standard LMS’s. However, for many mid-sized organisations Totara has undoubtedly hit a sweet spot in the market.
We anticipate (and are indeed seeing) many organisations dipping their toes into the market (or replacing older often in house developed products) with Moodle or Totara.
We are keen to understand how quickly Totara will align to Moodle 2.0 and allow upward migration as organisations seek to scale and grow their e-learning provision and require greater levels of learner management.
Overall the LMS market continues to confound and confuse with levels of innovation and differentiation. Vendors are addressing the market challenges posed by Totara and a range of other open source solutions in a variety of ways.
Some vendors are following the vertical market and configuring the offer to meet specific needs, others are differentiating by adding social media and social learning functionalities, and others are aligning the LMS to the latest technologies being colonised by the e-learning industry – mobile/smart devices and video driven content. The trend from the USA is strongly toward talent management.
The smart vendors in our view are aligning and integrating with other solutions: HR, ERP, CRM etc….
Content, Content or Content, which to choose…..?
These developments can only be positive for the industry, as the demand for content will grow and grow.
The question is – what sort of content will be commissioned: outsourced content or in house developed content or open content or even user generated content?
Our view, (we are sure we share with most other commentators) is that obviously it will be a mix. The challenge in mixing (not blending) the content provision will be the key challenge to the e-learning industry. The role of the learning designer will be the key differentiator in creating the engaging and effective e-learning required.
So no…..the importance of content won’t go away, its just changing fast.
If we look briefly at the work of ADL and the future of learning content we can see that this will be and has already been a key accelerator for much of the industries innovation effort – producing content that is designed centred “ilities” supporting the concepts of “Flexible”, “Interoperable”, “Re-purposable” and “Accessible” learning content.
We also believe the demand for new genres of learning content will grow strongly. We report from our research a surge in demand for high quality immersive learning utilising 3 Dimensional technologies as well as serious gaming and simulations also proving to be genres in demand…..(at last we may add) as serious gaming finally moves from the status of “perennial potential” to a learning reality!
Cloud based content solutions also appear to be making good headway in the market.
Mobile Learning
In our 2009 research report we thought mobile learning a “maybe just maybe”, In 2010 we thought of it as a definite and in 2011 we see mobile learning as a major driver for the growth of the e-learning market.
The driver is not one of simple learning enhancement and support driven by a requirement for portability and availability made possible by smart phones and pad devices, but also one of learning “additionality”. The PC will still remain key to many learners for some years to come.
We are particularly taken with the concept of second screen learning, in that learners will use mobile devices i-pads, smart phones etc… in conjunction with other forms of learning.
We do not see mobile learning as a straight replacement to existing e-learning genres, and accordingly we do not advise organisations to rush headlong into mobile learning solutions because they can, but to use mobile learning in appropriate additional ways to enhance the learning mix.
One principle game changer is the arrival of tools such as Epic’s GoMo and the continual evolution of Rustici’s SCORM solutions that will allow e-learning to be adapted for delivery over almost any mobile device.
HTML5 coupled with Cloud based services will further embed e-learning into the all- pervasive always on internet. Indeed the terminology of mobile learning/ e-learning will lose differentiation, as will the nature of the device that the learning is undertaken upon.
Content can now increasingly be authored or in many cases converted to become fit for all purpose all range device delivery.
Virtual Classroom
We see 2011 as being the breakthrough year for virtual classrooms, as organisations move on from webinars (which are increasingly commonplace) to more interactive environments offered by virtual classrooms.
Technology such as photo realistic avatars will overcome the claims that these environments do not support the social aspects of face to face events. This coupled with the growing importance of social learning will lead to greater learner acceptance.
The issue will be effective delivery and this will require carefully designed learning events delivered through virtual classrooms. The temptation of the trainer to “wing it” will be a considerable risk, as learners are likely to disengage very quickly.
Social Learning
This brings us to the next emerging paradigm made up of Social learning, the e-learning industry has become very excited with social learning, and we see many of the most original thinkers who gave “definition and shape” to what is meant by e-learning exercising their minds around social learning.
Secondly, as noted above we see many e-learning vendors adding social media solutions to their products and services mix……and as we put it “colonising” the technologies for learning purposes.
It may be useful to begin with a definition of what we mean by social learning.
Tony Bingham and Marcia Conner offer in their work “New Social Learning” a succinct definition of what we mean by social learning…..or perhaps firstly what is not social learning….
“It is not a delivery system analogous to a classroom training, mobile learning, or e-learning. Instead it’s a powerful approach to sharing and discovering a whole array of options.”
They go on to say:
“The new social learning is enabled by easy to use, socially focused and commercially available “Web 2.0” tools and “Enterprise 2.0” software that moves services, assets, smarts and guidance closer to where they are needed – to people seeking answers, solving problems, overcoming uncertainty , and improving how they work.”
Our view….
While we are as an industry fascinated by the latest trends in learning – social learning being hugely interesting at present (and Jane Hart is doing a wonderful job in sharing this), Learning Light believes the 4 pillars that go to underpin the buyers requirements and therefore still define the industry offer remain
- Compliance
- Reduction in Cost
- Improving Learner performance
- Timing, alignment and communication to support change.
Witness the number of e-learning developers who have launched courses aimed at the bribery act. The ability to track and report learner performance remains upper most in many procurers mind.
These are obviously not mutually exclusive, and a well specified learning strategy can deliver effectively against all of these requirements, and getting the “e-learning mix” of technologies obviously including content, collaboration and communication environments (social learning) and control mechanisms will be the key to further industry growth.
Under-pining these trends we are seeing growing interest in how e-learning can address softer skills.
However, there is little doubt that levels of understanding among potential procurers are still disappointingly low, but sensitivity to price is incredibly high.
Interest Levels
We are grateful for the work published by the very well informed Ken Ross of http://nowcomms.com and colleagues looking at the search trends for e-learning (with or without dashes), and we believe that interest levels are running at higher and higher levels as more and more organisations seek to gain greater insight into e-learning and its capabilities.
Learning Light is being invited to speak at more and more events with many organisations asking for three simple questions to be addressed (and one key question): What is meant by e-learning? What are its capabilities? How can you make it work? And what does it cost?
Companies interviewed:
Our thanks go to the following for providing us time and insight into the market during our recent research conversations.
Andy Hasoon: Pixelleaning and Intellego
Conor Gilligan: Webanywhere
Duncan Norris: TWM
Elaine Teal: DayOne Technologies
Emil Reisser-weston: e-learningWMB
Lesley Ord: Virtual College
Mark Pearce: The Workshop
Patrick Fitzpatrick: PTK Learning
Scott Hewitt: Real Projects
Steve Holt: i-education
Tracy Capaldi-Drewett: Red Tray
