If you’ve been following the news and analysis from Talented Learning, you know that the thriving LMS market is comprised of more than 800 vendors, whose solutions can be grouped unequally and imperfectly into corporate, academic, association and continuing education type LMSs.
Although some functionality is common across all the types (for example, features that help you manage learning content and users), each type of LMS is designed to address unique use cases, functionality and integration with other related software.
Also, each type has risen from unique vendor experience and expertise that may not have necessarily inspired the others. This uniqueness is what differentiates each type of LMS, and is fueling exciting innovation in recent years.
To give you a taste of the many flavors of learning systems and the pockets of specialization that exist, let’s dig into the diverse and not-so-easy to digest corporate LMS market.
Corporate LMS Market Snapshot
For many years there were less than 12-15 viable, similar, one-size-fits-all, corporate LMS competitors.
Now hundreds and hundreds of LMS vendors compete in the corporate market. These vendors range from global software conglomerates to tiny, regional cloud startups.
Some vendors have full system-integrator type professional service teams, while many others are based on a self-service implementation model. A handful of corporate LMSs are free, the high end can cost over a $100/user/year. The business focus of the LMS could be compliance, talent development, enablement or commerce.
Today’s heterogeneous corporate LMS buyers have highly diverse needs and have learned painful lessons from the past. One-size-fits-all solutions are great when a company simultaneously has lots of learning problems, locations, business units and learning audiences.
But if a buyer has only one audience and a laser-focused business use, a one-size-fits-all is likely to be too big, bulky and expensive. Discerning, educated buyers want specialized vendor solutions to help them achieve their goals better, faster and more cost effectively.
The Rogue Extended Enterprise LMS Buyer: Rarely in HR
Extended enterprise learning is defined as any type of education a corporation provides to external audiences – including customers, prospects, channel partners such as dealers, franchisees, distributors and others. This helps organizations generate measurable direct and indirect income, improve customer satisfaction and expand their global reach.
However, those who own the responsibility and budget for channel and customer audiences often reside in different, unrelated organizational functions and/or business units.
Purchasing decision-makers for employee learning systems are typically in HR or training department roles. In contrast, the purchasing point for extended enterprise LMSs can be found in a variety of functions, including sales, marketing, product teams, channel management or customer service.
Specialized extended enterprise LMS vendors know this, and have developed their solutions specifically to target extended enterprise use cases and budgets.
With unique audiences and non-HR purchase points, these vendors have left employee learning solutions behind to serve rogue extended enterprise LMS buyers. Of course, this may mean that the same organization is investing in multiple LMSs – many times without even knowing it.
Is this a problem? LMS vendors aren’t complaining.
The diversity of employee vs. extended enterprise learning needs and audiences has contributed to the explosion of specialized LMS vendors who are shaping today’s corporate LMS.
4 Flavors of Corporate LMS
Interestingly, there is no universal blueprint that shows how vendors target corporate LMS buyers. Many viable and competing strategies exist.
Apparently, there’s ample room for multiple competitors. Here is a snapshot of the corporate LMS market by audience category:
CORPORATE LMS MARKET
Source: LMS Almanac
Based on our research, we believe there are at least four different types of corporate LMSs including:
- Employee LMS – The original LMS focused on employee compliance, training automation and in some cases talent management. Employee LMSs are often considered “boring” and “LMSy” by the end users, primarily due to the mandatory nature of the compliance training content these platforms manage.
- Channel and Partner LMS – Modern learning platforms, designed to build, grow and certify external sales and distribution channels such as dealers, franchises and retailers. Channel LMSs provide the most measurable and predictable ROI of any type of corporate LMS by simply comparing the sales performance of trained vs. untrained channel partners.
- Customer and Prospect LMS – Solutions designed around ecommerce and integration with CRM solutions. They are adept at helping organizations attract prospects, educate new customers and develop loyal, satisfied customer relationships. Customer-centered LMSs are often thought of as “learning marketing systems” and are not a bit “LMSy”.
- All-Purpose LMS – Designed to support any or all of the above, simultaneously. All-purpose LMSs are the biggest, most comprehensive, most configurable kind of corporate learning system but seldom can do it all at a high level. Jack of all trades, master of none. They can also be costly to license, implement and support but if deployed correctly offer significant economies of scale in cost, licensing and content sharing.
A key takeaway here is that there is a big difference between what an LMS “can do” vs. “designed to do.”
Many corporate LMS vendors think they are all-purpose but are really just employee LMSs that have external users or B2C commerce. Pure extended enterprise vendors bring a new level of ecommerce, interface design, social media, marketing automation and web expertise unknown to the typical HR-oriented learning system.
In future posts, we will dig into each of the above four types and provide more detail, characteristics, case studies, top vendors and more.
What does all this category analysis mean? Why does it matter? LMS vendors are now carving out a competitive edge through specialization.
Generalists tend to compete on price and broad functionality, while LMS specialists compete with incremental capabilities that add value by helping customers move the business needle.
For LMS buyers, this new market means more buying complexity, but also the opportunity to find matching business partner specialists that can help them compete better.
Sure, you can find any old LMS to help you manage learners and content, but if you want to use learning technology as a competitive differentiator, consider a specialist flavor. With the breadth and depth of variety available, this is a fascinating time to be an LMS selection consultant.
Thanks for reading!
Learn More: Webinar Replay
Stuck with a learning system that no longer meets your needs? Paying for annual maintenance and hosting, but haven’t upgraded in years and rarely use tech support? Want to expand your learning program reach to customers, channel partners or others, but can’t afford the incremental licenses? Ready to move up to a new solution, but unsure about what it should cost? If any of these scenarios are familiar, this webinar is for you.
Join Talented Learning lead analyst and CEO, John Leh, as he shows you how to take charge of the LMS replacement process and lead your organization into the modern learning age. You’ll learn how to:
- Analyze what you’re currently spending (and why)
- Define what you need in a new LMS
- Outline the best license model for your intended use
- Develop realistic budget expectations
- Create a business case your stakeholders can support
- Find vendor intelligence you can trust
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