ELearning Market Update – December 2011

This month we report on further consolidation in the learning technology market as SAP buys SuccessFactors and we look forward to Learning Technologies, the main European elearning event in January.


Firstly, let’s start with news of further market consolidation in the Learning Technology space. Last month we commented on Lumesse’s acquisition of Edvantage. It seems more people are in the present-buying mood at this time of year... this month SAP announced plans to acquire SuccessFactors for approximately $3.4 billion (almost 10 times their 2011 revenues). SuccessFactors themselves only recently acquired Plateau LMS, so this is a triple consolidation.

We are becoming used to such consolidations, but you still have to ask the question – why did SAP decide to buy SuccessFactors? Josh Bersin, a man who follows such market developments closely, put out a commentary very quickly and stated ”this is not an acquisition initially designed to create a next-generation talent management solution but rather one to help SAP build a winning cloud-based ERP solution.” SAP want to grow their OnDemand offering and quickly.

The acquisition will create cross selling opportunities for SAP, but there is a risk that the innovation which drove SuccessFactors will slow down at SAP. Bersin states there are hundreds of “decisions about how to integrate SuccessFactors products with SAP products. And all this effort typically slows down innovation and takes lots and lots of intellectual energy.”

It is not clear what this will mean for Plateau customers as existing SAP products overlap with Plateau. Bersin argues “Plateau customers have now gone from being the primary customer of their vendor to being the secondary and now third in line in priorities and investments.”

What is clear is that we can expect to see more consolidation in the market. There are two schools of thought. One argues for a closely integrated suite of HR systems and the other argues that talent management systems can sit alongside HR systems and share data. The latter school argue that there doesn’t have to be such close integration and that independent talent management vendors will provide more innovative solutions.

The same arguments apply to learning systems. Do learning systems have to be integrated into larger systems where they inevitably have a lower priority, or will faster innovation and better learner experiences come from independent learning systems that can also integrate and share data? It will be interesting to see how the market develops.

If we can dare a little impartiality, we think one of the other big stories reflecting on 2011 was the launch of Totara, a custom distribution of Moodle, developed by us at Kineo along with our partners at Catalyst and Flexible Learning. It’d been an interesting year making waves in the LMS market; we report on year one separately here.

We are looking forward to seeing what innovations are on display at January’s Learning Technologies conference and exhibition. This year’s event promises to be bigger and better than ever, with over 200 companies displaying their wares at the exhibition.

We love Learning Technologies and to help promote this year’s event we are giving away a free conference place and free gift, either the new Nintendo 3DS, Amazon Kindle or Apple iPod nano, worth over £1,000. All you have to do is to give us your top tip for attending Learning Technologies or your best elearning design tip. Take part in our competition to win the place here: http://www.surveymonkey.com/s/Y2HLZ6M

Don’t worry if you don’t win – it’s not really about the tips. The exhibition is free to attend and we will be giving away our new Guide to Designing Mobile Learning and a chance to win an iPad. So come and visit us on stand 64; we look forward to seeing you.

By Steve Rayson