UK E-learning Market Update (Oct 2006)

A new Research Report (Oct 06) from Ambient Insight says the e-learning market is growing but prices are falling fast.

According to Ambient Insight "pricing pressures, competition, Open Source solutions like Moodle, server appliances with pre-installed content, and inexpensive hosted services are driving prices down very fast."

According to their newly released market forecast, the eLearning industry has begun to grow again after several years of stagnation. The industry was stalled for four years following the U.S. economic recession. Prior to the recession, the early adopters in the enterprise corporations defined the industry. Now eLearning is no longer just an enterprise trend. Wide adoption is now occurring across all the buying segments.

The research predicts that the market for eLearning will grow by 30.8% over the forecast period. Other key findings include the major shift in buying behavior and buyer demographics, a transformation of the supply chain, the robust growth in BPO “smartsourcing” services, innovative business models, and new revenue opportunities for nimble suppliers.

Consolidation in the UK – Finally Happening?

Back in May we announced that the future was red with the rapid growth of Redtray. The company has continued to grow and recently announced its acquisition of Bourne Training.

It also appeared in the Sunday Times list of fastest growing companies with revenue up from £400,000 to £4.5m over two years. Nice.

Bourne is yet another Redtray acquisition following BlueU and Knoweldge = Power in recent years.

The key question is whether this acquisition strategy will work in the bespoke e-learning and development sector. In the LMS space mergers and acquisitions have reduced the number of competitive players significantly. In the bespoke space this hasn't really happened as traditionally new companies are started as fast as others merge or go bust. It will be interesting to see Redtray's figures over the next few years.

Maybe things are changing and we’re finally seeing consolidation in the bespoke space. Key indicators of a change are Maxim/Adval going into receivership, Futuremedia's acquisition of ebc and Redtray's acquisitions. However, there are new companies emerging and the market still feels very competitive (take it from us!). On the upside, however, there is a lot of activity in the market and many companies are very busy.

Also whilst on positive news, we hear of a recent bespoke e-learning contract for over £500k, more news next month but good to see such contracts are still around in the e-learning industry. Grab them while you can…

It’s also good to see our friends at Academy Internet are also growing significantly. This follows the transfer of ex-Adval/Maxim staff to their team.

We also hear rumours of some plans for entry to the UK market of a major global player. They have been major players in the US and beyond, so it’ll be fascinating to see what plans they have for the UK market .

Looks like it’s going to be an interesting run-up to Christmas….

Finally, Training Outsourcing released the findings of their latest Global Survey on 17 October 2006. The top challenges identified by respondents were:

  • Budget constraints (48%)
  • Content localisation and translation (40%)
  • Effective learning delivery (39%)
  • Maximisation of e-learning (34%).

So no surprises there!

Training delivery (36%), content development (35%), and technical services (26%) are the most frequently outsourced services.