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What Factors Are Shaping the LMS Market? 2018 Learning Systems FAQ

LMS market trends 2018 - mid-year questions and answers with independent learning tech analyst John Leh

As an independent learning systems consultant, I’m often asked to share my opinion about what’s happening in the LMS market. Last month, I published a mid-year learning technology trends update. At that time, I promised to share additional thoughts about what these trends mean for LMS buyers and sellers.

Below are 10 of the most common questions I’ve received this year. Keep in mind that I view the LMS landscape through an extended enterprise lens. In other words, I’m most interested in learning solutions designed for business customers and channel partners, association members, continuing education participants and the public-at-large.

Regardless of whether you’re an LMS buyer, seller or user, I hope you’ll find this Q&A helpful. If you’d like to talk directly about how these topics apply to your organization, feel free to contact me anytime.

LMS Market Trends 2018: Top 10 Questions

1) Are you seeing a shift in demand for LMS platforms?

Interest in learning systems remains strong. One way I gauge overall market demand is in the volume of requests we receive for LMS selection guidance. Needless to say, business is brisk.

Volume-based SaaS licensing models are the primary driver. This pricing strategy puts cloud learning platforms within reach for small and medium-sized businesses that want to train customers, business partners and other external audiences.

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Thanks to simple, transparent licensing, platforms like Adobe Captivate, Docebo, Litmos, Schoox and TalentLMS are attracting tens of thousands of customers who could never afford to invest six figures in a traditional LMS.

And interestingly, now that volume-based SaaS licensing has energized the extended enterprise LMS market, employee training solutions are following suit. This means talent-oriented learning systems are no longer the exclusive domain of Fortune 1000 companies with deep pockets. Today we see companies of all sizes delivering customized educational programs to employees as well as external audiences – all from the same scalable learning platform.

2) How is innovation moving learning systems forward? What does this mean for the LMS market?

Innovation continues at a blistering pace. The more solutions I evaluate, the more difficult it is to process it all. Of the 700+ LMS solutions available, most are differentiating themselves by innovating in at least one way – user experience design, admin, analytics, mobile apps, social functionality, personalized content, built-in authoring tools, API-enabled integrations, gamification, bulk ecommerce capabilities and more.

Of course, no vendor can innovate effectively in all areas at once, so each chooses matters most in its niche. Collectively, these choices advance the overall learning systems market. But with so many players and nonstop change, it’s tough for any given buyer to find the best solution for their particular needs.

3) What kind of functionality is attracting the most attention?

I see progress on multiple fronts, for example:

  • eCommerce:  Organizations everywhere are trying to determine the best way to monetize their instructional content. Many are interested in selling to groups as well as individuals. That means they need secure, reliable, robust ecommerce functionality.
    Interest is coming from all corners of the LMS market – corporations as well as associations, non-profits, academic institutions, commercial training companies and even entrepreneurial subject matter experts. In fact, organizations that once managed educational portals as “walled gardens” are now opening these sites to large customers and/or resellers and are offering custom learning experiences at a premium.

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  • Interactive Video:  It’s no secret that video content is hot. And now that video-based instruction has become so easy and inexpensive to produce, the next step is to jazz it up. For example, you can make learning experiences more interactive by syncing video with written transcripts, embedding questions, linking to limited-time resources and adding social comment functionality. You can even monitor attention levels to measure effectiveness and continuously improve content quality.
  • Mobile Apps:  Not long ago, custom mobile learning apps seemed like a passing fad, but now they’re making a comeback. When smartphones first took the business world by storm, talent management vendors created apps with limited functionality to cover for browser interfaces that weren’t mobile-responsive. Then the “mobile first” cloud LMS became the norm. Now, custom apps are being developed for learners who travel heavily, work remotely, are frequently offline, or have unique “on the go” business requirements. Apps are especially attractive because learning organizations can track activity and engagement in detail. Some specialized app developers include BlueDrop, Digitec, Instancy, Kineo/Totara, Maestro, NetExam and WebCourseworks.
  • Exam Prep:  The certification training industry continues to expand, along with services that prepare individuals to pass exams for academic admissions or professional certifications. Many associations and commercial continuing education providers offer online test prep content packages, while automated practice engines like BenchPrep are also helping learners develop mastery in target subjects. It’s also possible to administer exams remotely and manage certifications digitally, as individuals pursue their chosen career paths. With so much interest in professional reskilling and upskilling, we see huge growth potential in this niche.

4) Is all of this innovation changing the LMS buying process?

Selecting an LMS is just as challenging in 2018 as it was in 2008, but for different reasons. With so many choices today, it’s easy for buyers to be overwhelmed and underinformed. Without a formalized buying process, it is easy to make a poor choice – and many do.

I’ve seen complex global corporations assume that a simple, low-cost SasS solution will suffice. I’ve also seen small regional organizations invest too heavily in a full-blown talent management system.

Other LMS buyers make the mistake of picking requirements from spreadsheets filled with scores of possibilities. Everything seems valid (“Sure, let’s add this too…”). Before you know it, you’ve created a massive list of random features. Impressive perhaps. But useless.

Fortunately, I see more and more organizations relying on use cases to guide their LMS requirements. Who is your audience? What do they want to achieve? What behaviors do you want to change? What kind of results are you seeking and can measure? Starting here makes it possible to prioritize your needs.

In any case, if a buyer is even somewhat serious, a formal buying process is essential.

5)  Is LMS switching behavior on the rise?

It’s a good time to be an LMS selection consultant. Switching LMSs is definitely a popular trend. With so many learning solutions available, now is an ideal time to reevaluate your needs and decide if LMS replacement makes sense – functionally or fiscally.

LMS consolidation is a common reason why organizations switch platforms. As companies grow, their needs change. Mergers and acquisitions can create a collection of mismatched systems. And sometimes outdated platforms are no longer supported by vendors and upgrades are impossible. If you add-up the high cost of maintenance, duplication of content, lost efficiency and lack of user engagement, it’s easy to make the business case for LMS consolidation.

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Many other organizations are stuck with a full-blown talent management system of record that doesn’t support customer or channel training. Since switching isn’t possible in those situations, it’s best to invest in a separate external-facing system specializing in that LMS application.

Professional associations and non-profits are also in an active switching mode. A decade ago, progressive associations invested heavily to make a corporate or academic LMS work for member-oriented learning. They had no choice.

Now more than 30 pure-play association LMS solutions are available – all designed to support community growth, collaboration and continuing education ecommerce at every price point. With so many viable options, associations are rapidly moving away from traditional employee-oriented LMSs to specialized suites of applications designed to encourage lifelong learning and generate substantial streams of revenue.

6)  Are LMS deployments really more measurable than they were 5 or 10 years ago?

For sure. Organizations don’t buy extended enterprise learning platforms without a measurable reason. Now, with advanced reporting and analytics available in many LMSs and CRMs, and with third-party reporting tools such as Visier and Watershed, organizations can track, compare and drill-down on learning-related metrics with a level of sophistication they could only dream about in the past.

It can be really easy. Isolate two groups – one trained and one not – then measure activities you can track in other organizational systems. For example, are partners selling more or less? Quicker or slower? This improved insight makes it relatively simple to pinpoint what’s working, how well it’s working, and what needs to be improved. It also makes business impact easier to analyze – which helps justify increased investment over time.

Training organizations that actively measure, predict and improve never have a lack of budget or organizational support.

7)  Does anything surprise LMS buyers these days?

I’m old enough to remember when nearly everyone hated their LMS. It’s not like that anymore. Just listen to my podcasts with learning leaders from all kinds of organizations, and you’ll find out why they love their systems so much. With so many choices catering to every type of buyer, buyers are surprised by the progress of the industry and the sophistication of the solutions.

There’s no longer any reason not to find a solution you’ll love. That’s definitely a welcome change for anyone who has struggled with old-school systems. However, if you’re not careful, it’s still easy to find an LMS you’ll hate.

8) Are you surprised about any current LMS market dynamics?

After two decades in this industry, you would think nothing surprises me anymore, but I’m wowed every day.

I am very impressed with the recent rise of learning experience platforms (LXPs/LEPs) such as DegreedPercipio and EdCast. These platforms are adding value by automating content personalization.

I’m also excited about how APIs are making it remarkably easy to integrate authoring tools and other high-value functionality into core learning platforms. Reporting and analytics are driving learning into a core strategic differentiator in the market and the confluence of LMS, ecommerce, learning experience, marketing automation, CRM and artificial intelligence in the best extended enterprise applications gives me goosebumps.

That’s just the tip of the iceberg.

9) How are LMS business models changing and how is this affecting the market?

Vendor business models are generally becoming simpler, and that’s a good thing for both buyers and sellers. I think this is a natural by-product of increased specialization. For example:

  • Employee LMSs generally build licensing around the number of employees in your company
  • Association LMSs focus on the number of unique learners that use the LMS within a specific timeframe
  • Ecommerce LMSs tend to base their licensing on the volume of courses sold

If a licensing scheme doesn’t align with your learning structure or seems overly complicated, keep looking. I guarantee you’ll find a better fit.

10) What advice do you have for anyone purchasing a new or replacement LMS?

If you support organizational learning programs of any kind and you haven’t invested in a new LMS in the last 5 years, you’re behind. The market has changed dramatically. Specialists are the new norm. You should expect high efficiency, economies of scale and measurable results.

Now that 700+ platforms are available, it may not be obvious which ones are ideal for your particular situation. However, I’m confident that you can find your LMS soul mate.

 

Conclusion

That’s it for my answers to your top 10 LMS market questions. Did I miss something you’d like to understand better as a buyer or seller? Feel free to contact me to discuss your needs and concerns at your convenience.

Thanks for reading!

 


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How to Drive Online Learning at Scale: Corporate Market Strategies for Associations

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Selling online learning content to individuals is challenging enough. But selling that same content in bulk through corporate customers or partners can be even more demanding. What does it take to succeed?

Join John Leh, CEO and Lead Analyst at Talented Learning, as he hosts a live virtual panel with experts who have developed and managed profitable B2B online education programs:

  • William Hold, Chief Development Officer, The National Alliance for Insurance Education and Research
  • Linda Bowers, CTO, WBT Systems

In this dynamic one-hour roundtable, you’ll learn how to:

  • Build a viable business model for bulk sales
  • Develop effective pricing and marketing strategies
  • Compare tradeoffs of selling through sales reps versus online channels
  • Delegate content administration, reporting and user provisioning
  • Integrate core learning systems with CRM platforms and other operational applications
  • Achieve internal buy-in, drive project momentum and maintain organizational alignment

All live webinar attendees will receive 1 credit toward a Certified Association Executive (CAE) credential application or renewal.

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John Leh
About John Leh (161 Articles)
John Leh is CEO and Lead Analyst at Talented Learning, LLC. Named among the “Top 20 Global Elearning Movers and Shakers” in 2018 and 2017, John is a fiercely independent LMS selection consultant, blogger and podcaster who helps organizations develop and implement learning technology strategies – primarily for extended enterprise applications. His advice is based on more than 20 years of industry experience, serving as a trusted LMS selection and sales adviser to more than 100 learning organizations with a total technology spend of more than $65 million. You can connect with John on Twitter at @JohnLeh or on LinkedIn.

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