Analysis of the Global Learning Management Systems Market Traditional Dichotomy Between Walled Garden and Open-source Products Gives Way to Middle

Transcription

1 Analysis of the Global Learning Management Systems Market Traditional Dichotomy Between Walled Garden and Open-source Products Gives Way to Middle Ground of Configurable Solutions January 2015

2 Contents Section Slide Number Executive Summary 3 Market Overview 8 Drivers and Restraints 18 Total LMS Market - Forecast and Trends 40 Market Share and Competitive Analysis 46 Academic LMS Segment Analysis 50 Corporate LMS Segment Analysis 65 Trends Analysis 81 Demand Analysis 84 The Last Word 90 Appendix 93 2

3 Key Findings Learning Management Systems (LMS) crossed $ billion in revenue in The LMS market is broadly characterized by rapid technological innovation, a variety of business models for delivery and pricing, and prevalence of high levels of customer dissatisfaction. The LMS market is broadly segmented on the basis of end users into corporate LMS and academic LMS. Corporate LMS provides an effective means for ubiquitous delivery of elearning content to employees on the fly. Further, corporate LMS is integrated with talent management software to unite learning with performance objectives. Academic LMS serves as an excellent means to deliver multimedia and interactive course content to the present generation of digitally connected students. The need for this shift in learning/teaching methodologies is the result of change in expectations of students and their parents from educational institutions. Across both verticals, LMS systems deliver value by improving the effectiveness of delivery of learning and training content across multiple devices and in multiple formats through learning-focused collaboration and social learning in and beyond the classroom. 4

4 Key Findings (continued) The corporate LMS segment generated $ billion in 2013 and is likely to grow at a CAGR of % ( ). In contrast, the academic LMS segment generated $ million in 2013 and is likely to grow at a CAGR of % ( ). Most of this growth will come from emerging economies in Asia and Latin America. Major technological trends in the LMS market include mobility in learning, social learning and collaboration, personalized learning environments, learning analytics and reporting, ecommerce functionality, and the growing preference for adoption of Software as a Service (SaaS)-based delivery models for deployment. The market is highly competitive, fragmented, and warming up to higher levels of consolidation. There is a high level of commoditization of LMS features. The gap between small, emerging providers and market leaders in terms of product features and capabilities has diminished, making LMS a buyers market. Nonetheless, customer dissatisfaction is rampant in the LMS market, particularly due to shortcomings in reporting capabilities, user experience, and customer support. Thus, opportunity for new as well as replacement sales is plentiful for a well-crafted solution. 5

5 Market Engineering Measurements Market Overview Total LMS Market: Market Engineering Measurements, Global, 2013 Market Stage Market Revenue Market Units Average Price Per End user Market Size for Last Year of Study Period Growth $ B M $ $ B (2013) (2013) (2013) (2018) Base Year Market Growth Rate Compound Annual Growth Rate Customer Price Sensitivity Degree of Technical Change Market Concentration % % % (CAGR, ) (scale:1 [Low] to 10 [High]) (scale:1 [Low] to 10 [High]) (market share held by top 3 companies) Decreasing Stable Increasing For a tabular version, click here. Note: All figures are rounded. The base year is

6 CEO s Perspective The corporate and academic LMS segments are distinctly different in terms of feature requirements, sales strategy, and competitive differentiation. Crossover is highly challenging. The market is highly competitive, fragmented, and warming up to higher levels of consolidation. Mergers and acquisitions will play a key role in ensuring vendor competitiveness. LMS is usually sold as part of a larger solution set (like a talent management suite in the corporate market) and is sometimes bundled with content. Effective strategy demands partnerships with technology vendors and content providers. A large number of clients are dissatisfied with their current LMS and are looking forward to a replacement. Vendors must invest in improved reporting capabilities, appearance, ease of use, and support. 5 Emerging economies in Asia and Latin America present an attractive business opportunity. Product localization and regional system integrator partnerships are the keys to global growth. 7

7 Market Definitions A Learning Management System (LMS) is a software application or a Web-based technology to plan, implement, automate, organize, track, and assess a specific learning process. An Academic LMS is an LMS deployed in an educational setting such as a school or university. It is essentially a course management system that allows the instructor to build course content and monitor student achievement. Academic LMS systems are also designed to facilitate instructor student and student student communication. A Corporate LMS is an LMS deployed in a corporate setting. These systems usually lay emphasis on self-directed learning as an instructor might not always be present. They are primarily used for corporate training and talent development activities and are usually integrated with talent management suites and other HR systems in the organization. A client may refer to an educational institution or a company where an LMS is deployed. An end user refers to a student or instructor in case of the academic LMS segment and an employee in case of the corporate LMS market. 9

8 Value Proposition Corporate LMS provides an effective means for ubiquitous delivery of elearning content to employees on the fly. Further, corporate LMS is integrated with talent management software to unite learning with performance objectives. Learning and development departments also benefit from increased employee engagement and retention, associated with the implementation of LMS. Moreover, reduction in training costs is a key business imperative that justifies the business case for LMS. Academic LMS serves as an excellent means to deliver multimedia and interactive course content to the present generation of digitally connected students. The need for this shift in learning/teaching methodologies is the result of change in expectations of students and their parents from educational institutions. The reason for this change is that students are exposed to multiple alternatives for enhancing their knowledge, such as free online courses on the Web, social media, blogs, wikis, and learning apps. Moreover, student engagement seeks to improve through delivery of such forms of content and through learning-focused collaboration and social learning in and beyond the classroom. There is a high level of commoditization of LMS features. The gap between small, emerging providers and market leaders in terms of product features and capabilities has diminished. This makes LMS a buyers market. Buyers have a number of options to choose from in terms of pricing, delivery, and features. In addition, customers are becoming increasingly price sensitive. Major technological trends in the LMS market include mobility in learning, social learning and collaboration, personalized learning environments, learning analytics and reporting, ecommerce functionality, and growing preference for adoption of SaaS-based delivery models for deployment. 10

9 Similarities and Differences between Academic and Corporate LMS Systems Feature Academic LMS Corporate LMS Ability to launch and track an elearning course Training event management Integration with talent and performance management tools Social learning: Communication and collaboration with the instructor and other learners Content management Testing and assessment of learners Analytics and business intelligence Reporting Mobility Adherence to elearning standards such as SCORM, AICC, and IMS Industry-specific compliance management Security, scalability, and configurability Low to Moderate High 11

10 Regions Covered North America and Latin America (NALA) Asia-Pacific (APAC) Europe, the Middle East, and Africa (EMEA) 12