Back at the start of 2012 I attempted to make sense of the jumble of mergers and acquisitions across the digital learning market.
At that time I commented on the convergence of education and corporate sectors using Bluedrop and Serebra as illustrations. This trend continues including, for example, the high volume of Moodle implementations in the public and private sectors – away from their education sector heartland. This is helped no doubt by the emergence of commercial wrap-around solutions but there is also the factor that Open Source is now trusted by major organisations (and ISVs including Microsoft) as well as interfaces and plug-ins for .NET technologies. We are also seeing IWB specialists SMART and Promethean increasingly penetrating the corporate market.
The social media sector similarly continues to show an appetite for growth, demonstrated by the recent acquisition of Yammer by Microsoft.
I also commented previously on the inexorable growth of big organisations in the Talent Management market by acquisition of niche players. In January the wedding of Kenexa and Outstart (respectively Talent Management and LCMS giants) was announced. Since then the resulting combined organisation has been bought by IBM. The earlier acquisition of Plateau Systems LMS by SuccessFactors, to contribute SuccessFactors Learning to the whole Talent Management Suite, was followed at the end of 2011 by SuccessFactors themselves being swallowed up by SAP … with the whole integration process still under way it seems.
On the plus side it seems as though every major acquisition (there are few genuine “partnerships between equals”) leaves doors wide open and rooms empty for niche players to step into. The LMS market, for example, continues to witness mergers and acquisitions across all sectors but to stay steady at the 250 – 280 suppliers level. Why so many? Well possibly it’s to do with increasing digitisation of learning, training and assessment, with increased volumes and complexity of different regulatory and compliance systems and, particularly, the variety and sophistication of Open Source communities and their work.
Across the road in classroom world, the traditional classroom model has been successfully disrupted as commented upon by Clayton Christensen in “Disrupting Class”, which in 2008 was seen as somewhat heretical or hysterical. Nowadays the digital campus and classroom are a reality, as are Open Content and services such as the phenomenal Khan Academy. I am currently working on networked digital classrooms for manufacturing and assembly workers … an unimagined concept until very recently.
Consulting and classroom training companies continue to acquire what they see as eLearning companies but they are frequently disappointed and frustrated by the difficulties presented by moving into product markets, by the sales cycles and most tellingly by the price pressure driving down margins.
And so it goes … and will probably continue…
By Glynn Jung, Non-Executive Director
The constant mergers and acquisitions activity that we commented on at start of the year continues.
Four moves in particular interest me as illustrating current trends:
• Bluedrop & Serebra – the convergence of education & corporate sectors;
• Twitter & Summify – personalising social media;
• Kenexa & Outstart – feeling the pressure and hoping the grass is greener;
• Assima & Kaplan Technologies – consolidation and expansion.
Bluedrop and Serebra – the convergence of Education and Corporate sectors
In a surprise reverse buyout Bluedrop Performance Learning acquired Serebra Learning in January. At first glance the core one-stop SaaS offerings from these Canadian companies (CoursePark from Bluedrop and Campus from Serebra) would appear to be mutually incompatible but on closer examination there are sufficient differences between the two companies to make merger attractive.
Serebra has become a major player in Higher Education and Further Education and its functionality, course content and customer base reflect this education provenance. Bluedrop has carved a similar niche for itself in Defence, Aerospace, Energy and Health but with added expertise in low-cost simulations. The combined expertise of these two companies, sort of niche versions of Lumesse, should put them in a position to exploit the growing cross-fertilisation of Industry and Education as well as the increasing commercialisation of the education sector globally.
Twitter and Summify – personalising social media
Summify is particularly interesting for two reasons. Firstly it’s proof of the increasing innovation coming from Romania technologists (though the company has been physically located in Canada).
Secondly it’s one of the first of a new breed of “content curation” companies collecting news stories that are being shared on your social networks and putting them into a daily summary. The short-lived Summify service has made a name for itself by aggregating the most important news items from your Twitter and Facebook accounts and displaying them in easily digestible portions.
Twitter was the original “follower and followed” service but it’s not made the same progress as Summify so the acquisition and integration of the two offerings are wholly understandable.
Kenexa and Outstart – feeling the pressure and hoping the grass is greener
Two industry giants, Kenexa in HCMS and Talent Management and Outstart in LCMS and Learning Systems, have confirmed they’ll be tying the knot very shortly, mirroring the takeover in February by Oracle of Taleo. The Kenexa statement read “With the addition of OutStart’s capabilities, Kenexa will be able to offer customers an award-winning suite of SaaS learning solutions plus learning expertise and a great team with more than a decade of experience in learning management.” Commentators suggest that the learning & accreditation markets are suffering serious disruption at the moment and OutStart’s particular emphasis on knowledge sharing within organisations is ripe for innovation, something the combined expertise could deliver. As ever – the question is whether the two tribes can co-exist in a single corporation and at what point will clients feel the impact of the takeover.
Finally: Assima and Kaplan Technologies
My personal view is that Kaplan’s entry into the technologies market was ill-advised and a costly mistake. Both STT and Atlantic Link were always an odd addition to Kaplan’s Education, Academic and Professional Academies businesses … you rarely, if ever, see such a mixture succeed any more than that created when publishing companies buy eLearning generic eLearning companies.
Assima on the other hand is an organisation steeped in technologies and the sale of product-based services: like STT it was spawned from the SAP and ERP industry, (where it was originally known as DACG), and it understands how to use technology in learning and performance support on a major scale. Assima previously shunned the “conventional” eLearning market due to its core focus on Software implementation and exploitation, particularly using sophisticated EPSS, Simulators and Context-sensitive learning. But it makes sense to broaden the offering to its established international corporate clients by moving into eLearning.
By Glynn Jung, Non-Executive Director
The big-scale version of training outsourcing – LBPO (Learning Business Process Outsourcing) – continues to grow as a financially attractive option for employers with large and distributed workforces. Chats with some employers suggest there may be a gap for new mid-range LBPO suppliers who not only manage the contracts and services from a number of suppliers to an organisation, but also offer platforms, systems and rapid content development services.Well, acquisition and consolidation in the e-Learning market have been hotting up through 2011, (as in fact has happened during previous recessions), as investors look to exploit opportunities in new tools, technologies and sectors for workforce skilling, as major suppliers look to extend market reach and as niche suppliers find development funds being switched off.
In terms of mergers, strategic investments & consolidations in 2011 we witnessed upheaval in all sectors and territories.
These included Lumesse acquiring Edvantage, SkillSoft acquiring Element K from former owners NIIT and BB acquiring both Elluminate & Wimba.
Taleo acquired learn.com and SuccessFactors acquired Plateau Systems, subsequently themselves being taken over in December by SAP.
Kaplan never seem far from their next purchase and LBPOs such as GP (formerly GenPhysics), KnowledgePool and Demos are no slouches in the consolidations markets; GP in fact acquired R.W.D. Technology’s consulting business earlier in 2011.
EPM and BPM giant OpenText picked up Operitel for its e-Learning management expertise that will be bolted into OpenText products in the future. Operitel’s LearnFlex includes social and mobile learning management fully integrated into SharePoint.
Trivantis also announced the official acquisition of its partner, Flypaper Studio. The deal couples Lectora authoring software with Flypaper, a full-featured Flash interactions builder and digital signage platform.
Investment Group acquisitions included UfI Ltd. and learndirect by LDC, GlobalKnowledge by MidOcean and with BB itself being acquired by Providence Equity.
Earlier hopes of SkillSoft’s intentions in terms of protecting and integrating the best of E-K’s products into their own portfolio now seem to have been a tad optimistic … anecdotally what I’m hearing is that all E-K products, including the third-party products, will be taken off the market as soon as practical and that SkillSoft are energetically pursuing a campaign of converting E-K clients to the SkillSoft services.
As the number of large generic catalogue suppliers continues to diminish I’ve increasingly received questions from my clients about their future supplier strategies and seeking my thoughts on how I see the market shaping up.
My first observation is that new portal suppliers will enter the mid-size catalogue sector, offering a limited number of value-for-money suppliers’ products.
I further suggest that clients will either return to contracting directly with preferred niche suppliers such as Happy, CrossKnowledge, ILX, Flow or Cegos, (those are just top-of-my-head examples), or will sign up with a new breed of smaller scale LBO partners. Certainly the issue of same look and feel for all materials seems to be largely irrelevant these days and increasingly people are weighing the pain of managing multiple suppliers against the value of getting exactly what they want. I’d like to hope that this will ultimately deliver smaller content libraries targeting real needs in an organisation rather than “just-in-case”.
Finally I suggest that there’s always room for new suppliers, both in existing generic sectors and to exploit the convergence of Higher Education,CommercialColleges,BusinessSchools, Business and Industry. Some of the most exciting innovations in blended learning are taking place in the public and education sectors where we see new commercial spin-offs or partnerships delivering much needed revenues.
In this I anticipate the emergence of generic content reflecting particular industry sectors or jobs, with scenarios, vocabularies and graphics relevant to these sectors and roles. Many of us had anticipated that this could be a spin-off from National Skills Academies but that didn’t really happen.