The 2016 LMS market is not what you think.
We have spent the last two years interviewing hundreds of global learning technology professionals on both the vendor and practitioner sides of the fence. We ask them all about business drivers, trends, market opportunities, use cases, demand, competition and measurable successes. We incorporate what we learn from each conversation into our analysis and understanding of the learning technology market. It’s not what we thought – it’s much better.
Here are our top ten 2016 trends, observations and predictions for the LMS and broader learning technology market.
10) Culture Shift Driving Epic Innovation in the LMS Market
Culture shifts happen slowly and then instantly. The cloud, mobile devices, social media, ecommerce, Google and bandwidth have changed everything especially the way we all learn. Simultaneously, there has been a shift from having a career at one organization to having a career comprised of numerous strategic roles at many organizations.
Now individuals and not organizations are responsible for lifelong learning and continuing education. Today’s learners, of any age, want to consume just-in-time resources and to leverage the collective knowledge to get to best content instantly, inexpensively and reliably. To address the culture shift, hundreds of learning technology providers are taking bold and unprecedented leaps and are creating net new opportunities in the market. The next nine LMS market trends, observations and predictions are in response to the culture shift.
9) 4 Main Types of LMS
For decades, there were only two types of LMSs – academic and corporate. The unique capabilities required to support students vs. corporate learners were too great to overcome and there was little crossover of demand.
In 2016, it is not so simple. We discovered the current 2016 market is made up of 4 broad types of LMS including corporate, academic, continuing education and association LMSs. All four groups share much functionality but each type contains functionality, use case workflow, integrations and specialties not required in the other three types. The unique requirements for each type is the sweet spot where all the innovation in our industry is happening.
8) Free Trial, Cloud LMSs Disrupting the Market
Only a few years ago LMS buyers could only gain sandbox access to an LMS after a lengthy sales cycle. Today, based on our recent survey of 75 LMS vendors, 37% of LMS vendors offer an instant free trial of their LMS directly from their website without speaking to a sales professional. This means that buying organizations/individuals, tire kickers, students or competitors can click right now on leading free trial LMS providers such as AbsorbLMS, Docebo, LearnUpon, Lesson.ly, Litmos, Service Rocket, Skilljar, SmarterU, TalentLMS and sign up without a credit card to try the LMS from both an admin and learner perspective. After some trial period the free trial customer can optionally convert to a paying customer. The barrier of entry for new LMS providers and new LMS buyers has never been lower.
7) Workday LMS Poised to Disrupt in 2016
In 2015 Workday announced that they are building their own LMS from the ground up. Workday, accustomed to disrupting the broader finance and HR enterprise software industry, has decided to now target LMS. This is big news. The behemoth TM providers such as Oracle or SuccessFactors devalued the LMS when they incorporated their LMSs into broader HR software suites and took their foot off the innovation accelerator.
This has led to a stampede of innovative LMS vendors entering the marketplace to win stand-alone LMS opportunities. Expect the Workday LMS to be cool, social, mobile and also anticipate Workday winning stand-alone LMS opportunities which is something most talent management LMS providers don’t often do. We predict this new dynamic will force the TM providers to modernize their LMS offering or acquire standalone, NextGen LMS providers like Expertus, Docebo, eLogic Learning, tessello or Growth Engineering to catch up.
6) Revival of the Rogue LMS
I remember when every business unit or geographic location of a large organization bought and maintained their own LMS. Over time, LMS vendors grew their solution capability to support the needs of the whole and the many simultaneously and the end of the departmental LMS era commenced. LMS vendors sold the fiscal and operational advantages of one enterprise LMS supporting all employees, contractors, channel partners, prospect and customers.
In the last five years the cloud (free trial) LMSs were invented and changed everything. Cloud LMSs are inexpensive to own and quick to install. If a business unit or region feels unloved by HR, they just get their own rogue LMS. This is especially true for those groups responsible for training external, non-employee audiences. Some rogue LMS enablers include Mindflash, Litmos, Docebo, Accord, Skilljar and Talent LMS.
5) The LMS Fight for Professional Continuing Education
Professionals in almost every industry (doctors, lawyers, architects, auditors, barbers, real estate agents) have mandatory training requirement to maintain their right to practice their profession. To complicate matters, each state, province or country has its own regulations and licensing rules on most professions.
Managing that complexity from an LMS standpoint is difficult and most free-trial, cloud LMSs can’t come close and the more traditional vendors do it poorly. However, the market is huge with millions and millions of global adults consuming CE annually. There is really only a handful of LMS vendors that specialize in the complexities of continuing education including Abila, eLogic Learning, WBT Systems, Digitec Interactive, WebCourseworks, EthosCE, Cornerstone, SumTotal, Saba and YM Learning.
4) Vacuum of Professional Service LMS Vendors
A byproduct of the free trial LMSs is that these vendors don’t build out professional service expertise. If you are a mid-sized or larger company shopping for your second or third LMS, most free trial LMSs are not a great fit because buyers need more services help. Migrating from a previous LMS or managing the complexities of multiple business units, integrations and languages is too much to figure out solo.
Sophisticated buyers with deeper requirements need an experienced professional service team to guide them through the process to ensure success. Professional services depth and breadth is a big differentiator in the marketplace and an easy place for a buyer to go wrong. Vendors that provide full-service capabilities include Blue Sky Broadcast, Blackboard, CommPartners, eLogic Learning, Expertus, WBT Systems, YM Learning, Cornerstone, Saba and WebCourseworks.
3) Content, Content Everywhere
As organizations arrive at the realization that creating anything but proprietary content for their employees is foolish, content focused companies have flooded the marketplace. The problem previously was off-the-shelf content was terrible but now content exists on most topics at a variety of price/quality points.
There are many different approaches, strategies and business models for getting content to organizations and their employees. Vendors like BizLibrary, Grovo and Skillsoft provide an LMS that includes prepackaged content and the ability to support proprietary content. Other vendors assume they have all the content you need to meet compliance or talent requirements like SurePeople, NavEx Global, 360 Training and QuestCE. Content aggregators such as OpenSesame, Udemy, knoitall, Coursera, Lynda, Degreed and EdX are creating libraries of the world’s best content from private, public and university sources. The content wars will rage on through 2016 and beyond.
2) Content Curation = Crowdsourcing Content
If you can’t find off-the-shelf content, let your learners find it. Curation is a fancy word that means taking the best user-generated content and elevating it to featured content, formal content and sharing it more broadly – crowdsourcing. For example, having your customers share projects, templates or workarounds they developed with your software product has broad appeal to other customers as well as internal product development and marketing teams.
Curation is cutting edge and there is no consensus on the right way to do it. To curate content it is important to have a learning platform that is completely socially enabled so that learners have profiles, contacts, news feeds, liking, posting, tagging, sharing and rating to facilitate the identification of great content. Companies including tesselo, BraveNew, MindTickle, AccordLMS, Docebo, CommPartners and unleesh are leading the way in curation innovation.
1) Doubling Down on Extended Enterprise
In 2015 our #1 prediction was the explosive mainstream emergence of extended enterprise learning – the business of training your non-employees. We will leave it as number one again this year because it is rampant in corporate, academic, association and continuing education sectors of the LMS market. The biggest 2015 proof point was that LinkedIn purchased Lynda.com. Lynda is a large, very successful content aggregator. It allows individuals or corporations to consume unlimited content for only $25 a month. Now this service is offered to LinkedIn’s 400 million users creating one of the world’s largest extended enterprise initiatives. For every one million LinkedIn users that buy this service, it generates $300 million in annual revenue!
Extended enterprise learning projects don’t have to be big though. Small training organizations, teachers and subject matter experts can easily find their way into the business of learning using platforms from LMS vendors like LearnUpon, AccessPlanIt, aNewSpring, Thought Industries, LogicBay, NetExam, Latitude Learning, Firmwater, Administrate, ViewCentral, SchoolKeep and Yardstick.
We don’t have a crystal ball. We do have a ton of current data, experience and research. The broader culture shift is driving the innovation that exists in the learning technology market. As the training content creation burden shifts from companies to content providers and individuals, new markets are evolving with patches of opportunity growing everywhere. This won’t be sorted out in 2016 or even this decade. Learning technology is now mainstream. Fun times ahead.
Thanks for reading!
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In a complex market packed with 700+ possible solutions, how can you be sure your next learning platform will work for your organization? What kind of functionality is essential? Do you know what’s available? What budget parameters makes sense? How can you avoid overpaying? Do you even know if an LMS is the best solution?
Where should you start?
Before making your next move, why not tap into the knowledge and experience of a successful independent learning technology consultant? Join John Leh, CEO and Lead Analyst at Talented Learning as he tackles today’s trickiest LMS buyer challenges:
- How to make sense of today’s expansive LMS landscape
- How to determine if you can afford a new LMS
- Why requirements definition is essential to sort through the learning tech “specialist” market
- How to narrow your options from 700+ vendors to a qualified shortlist
- When and how to use an RFP (or not)
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