UK E-learning Market Briefing (May 2006)

The headlines this month:

  • Strong growth for Redtray and Atlantic Link, and the completion of the Futuremedia/ebc merger
  • A new IDC report points to growing maturity in the e-learning market
  • Open University is about to launch one of the world’s largest LMS implementations based on Moodle, the open source LMS.

Movers and Shakers: The Future is Red

Recent developments have propelled Redtray and Futuremedia into the top tier of UK bespoke e-learning developers.

Redtray’s acquisitions of Knowledge=Power and BlueU, combined with strong organic growth, resulted in 700% growth to take their annual turnover last year to £4.5m.

Futuremedia also completed the acquisition of ebc which will in our estimation take the new company’s bespoke revenues to around £4m.

In our view there are few companies winning and delivering over £4m of bespoke e-learning in the UK. The market is dominated by relatively small companies and it is interesting to see both Redtray and Futuremedia emerge as major players in this market.

These remain challenging times for e-learning companies as the market continues to be very competitive and there appears to be an increasing move towards self-authoring of content. This can be seen in the growth of companies such as Atlantic Link which provide user friendly authoring tools, and the increased adoption of Macromedia tools such as Captivate and Breeze. (See Mark Harrison’s piece on the future of e-learning, which was developed using Breeze, in Kineo Knowledge this month).

We would tend to agree with Atlantic Link’s Mike Alcock when he says, "We really do believe that we are seeing a sea change in the way online training is delivered in companies. Even if companies are not writing their own material they certainly expect it to be written using authoring tools that allow easy extension and amendment of courses by non-IT specialists. We also find that once the software is being used in a company there is a rapid expansion in the number of licenses purchased, as they find that the flexibility of the software can deliver solutions in other areas."

Maturity - In the E-learning Market?

The latest IDC report points to a maturing market “as the buyer and vendor communities engage in more realistic discussions about e-learning's capabilities." Following the hype e-learning is being recognised as an integral part of performance solutions rather than "a mere training tool." Many contributions to this site have said the same – e-learning is about enabling improved performance, not training.

Open (Source) University

May also sees the launch of the Open University’s new virtual learning platform which is based on Moodle, the open source Learning Management System. This development is one of the largest LMS implementations and is testimony to the robustness and scalability of Moodle, which is also being used by Capita for their Teacher Resource service. The growth of such robust and free open source tools continues unabated.

A recent article in the Financial Times highlighted the different approaches being taken by Universities to e-learning. They argue there are two approaches emerging:

- Those who want to build on their on-campus MBA programmes and brands. These include such schools as Bradford or Warwick in the UK, and Babson and the University of Texas at Dallas in the US.

- Those that take the needs of the working manager as their starting point. The University of Phoenix, Edinburgh Business School and U21Global are good examples.

For the first group, rigour and accreditation are the main selling points. For the second, scale and flexibility are paramount.

Kineo and Intel recently collaborated to examine the future of e-learning for the higher education market and identified some similar points and some additional ones, and concluded that open source poses a major threat to the dominant players.


Steve Rayson

May 2006