Quick question for LMS industry watchers: Do you recall any learning platform that was purchased by a software giant — only to go its own way a few years later? I can’t. But that’s exactly what’s happening at Litmos LMS.
Last December, after operating for 5 years as a division of SAP, Litmos was acquired by Francisco Partners. And now, we’re fortunate to hear the inside story. Today, Litmos is stepping forward as a standalone company and CEO Mike Scarbrough helps us understand why the future looks bright.
This is a fascinating look at the not-so-straight path some technology companies take as they grow and evolve. Join us and learn what to expect, going forward…
THE LATEST FROM LITMOS – KEY TAKEAWAYS
To keep pace with fluid market dynamics, modern LMS companies need a robust infrastructure, as well as the flexibility to evolve rapidly and the expertise to adapt successfully.
It’s smart for any company to build on its core strengths. That’s why Litmos is leveraging its cloud technology, deep content assets, and strategic partnerships to offer scalable solutions for internal and external training needs.
Innovation matters only if you apply it in ways that add business value. This is the philosophy Litmos is using to determine its roadmap for features based on AI and other tech advances.
THE LATEST FROM LITMOS – Q&A HIGHLIGHTS
Welcome Mike. I’m sure our listeners are curious about what happened when SAP sold Litmos to Francisco Partners. Could you fill us in?
Yeah. SAP was running Litmos in a typical way. Developers, salespeople, customer support people, and others were working for Litmos. And all the shared services like accounting, HR, and marketing were done by SAP — not the Litmos division.
But Litmos wasn’t SAP’s highest priority. So eventually they realized they needed to get serious about rolling Litmos into something bigger, or exit. Ultimately, they decided to exit. That’s when Francisco Partners stepped in.
And what brings you to this CEO role?
For about 15 years, I’ve been a serial CEO, working with companies owned by Francisco Partners. We’re usually ranked number one in the private equity world. The firm has multiple strengths:
A cadre of top-tier managers that we can draw from to lead our portfolio companies.
We don’t invest in everything. We focus on several industries — mostly SaaS software solutions — and ed tech is part of that.
We’re involved in a number of successful companies. So we really know this space and have a successful track record.
We come to the table with a lot of experience doing divisional carve-outs, which is what we’re doing here with SAP.
And I think we’ve got a huge opportunity with Litmos.
So we’ve been hiring for key management positions, separating the IT infrastructure from SAP and standing up all of our business systems. We’ve been establishing our roadmap and communicating our vision and strategy internally.
And today, we’re starting the process of communicating with everyone else — our customers, our potential customers, and the rest of the learning and development community. We want people to understand our vision and strategy, so they know where we’re headed.
Wow. That must be quite a process. Congratulations. So let’s talk about the scope of the Litmos solution, going forward. Are we still talking about an LMS?
Most people think of us as an easy-to-use LMS that focuses primarily on learning related to HR compliance. We certainly do that. But we do a lot more than that now…
For example, content creation is a big component of what we do. We have our own content, and we have content creation tools that let people create their own content. We also have connections to marketplaces.
Also, we can operate in an OEM capacity. So if you have a learning content business and you want us to be your infrastructure partner, we can serve as the content delivery “plumbing” behind the scenes.
Right. There’s a really big market for learning systems to support training companies, associations, and even customer education organizations that want a branded front end, without having to build a backend LMS…
Yeah. We call those external use cases. When you’re training or onboarding employees, that’s an internal use case. But you may also want to integrate a training solution into your customer portal so your customers can learn about your goods and services — how they work and how to apply best practices.
This usually requires customization so the front end looks and feels like your website. It also needs an API layer so you can integrate it into your website. We have a lot of knowledge and expertise with this, so we help companies with that kind of implementation. It’s very similar to the OEM thing, which is more like an industrial-strength version of that same idea.
Can Litmos manage internal and external audiences concurrently in the same implementation?
Yeah, absolutely. That’s how a lot of organizations do it.
Let’s clarify something you said about content. LMS integration with third-party content libraries is fairly common. But creating your own content isn’t. And you create your own content, yes?
That’s very unique.
Yeah. There are tens of thousands of possible courses in our catalog. And an organization may have thousands of learners. So, how do they effectively match the two?
Often, there’s a core curriculum around things like HR compliance or safety training. And we have our own catalog that focuses on our own specialized knowledge, or courses from content studios we’ve purchased. The concept is like Apple TV or Paramount. So we have unique content, and we have a delivery system. Together, they create a compelling offering.
We’re not here to sell you anything. We’re here to help you solve your problems. So whatever you need, we should make it available. We might provide it directly, or it may come from one of our partners. Either way, we will guide you to it.
But yes, we’re adding lots of services.
Great. That’s such an important differentiator. Okay, now that Litmos is private again, what does the company look like in terms of revenues and number of employees? Anything you can share…?
John Leh is Founder, CEO and Lead Analyst at Talented Learning and the Talented Learning Center. John is a fiercely independent consultant, blogger, podcaster, speaker and educator who helps organizations select and implement learning technology strategies, primarily for extended enterprise applications. His advice is based upon more than 25+years of learning-tech industry experience, serving as a trusted LMS selection and sales adviser to hundreds of learning organizations with a total technology spend of more than $100+ million and growing. John would love to connect with you on Twitter or on LinkedIn.