Monday, September 17, 2012

E-Learning Market - Guerillas in the Mist

Last week Skillsoft announced they were acquiring Mindleaders. This is the latest in a long series of acquisitions and Skillsoft has become an industry giant over the last ten years. Through the mists of the e-learning market we can see a familiar pattern emerging as the guerillas move in.

The e-learning market is going through a period of transformation as it matures and the guerillas have started started to consolidate the maturing market. However, are they ready to manage the upheavals to come?

Here come the Guerillas

Skillsoft's acquisition of Mindleaders ensures they remain the main player in their content space.   Mindleaders themselves were previously acquired by Thirdforce, who traded under the Mindleaders brand. Thirdforce had acquired a number of companies as they grew including Creative Learning Media and Electric Paper. Skillsoft have acquired most of their competitors such as Netg, ElementK, 50 Lessons and now Mindleaders.

Other guerillas have started to make strategic acquisitions in the learning and talent management space, for example:
  • IBM acquired Kenexa who had previously acquired Outstart.
  • SAP acquired Success Factors who had previously acquired Plateau.
  • Oracle acquired Taleo who had previously acquired Learn.com.
According to Bersin "older companies like Mindleaders and Skillsoft must grow through acquisition in order to maintain their lead among newer, faster-growing upstarts with more modern content." It does appear to be a tried and well worn path that larger companies buy up newer and innovative smaller companies.

Challenges to the Guerillas

The fast changing nature of learning technologies poses significant challenges for the larger more established companies. In recent years this has included:

- software as a service
- open source technology

In the future it is likely to include:

- responsive e-learning, one version that works on all devices
- online open courses and massive online open courses
- social and peer learning

There are two types of challenge. The first is protecting past investments, such as investments in content or systems. These have the potential to become out of date very quickly in the new world, for example the rise of multiple devices means e-learning content should be responsive and work on all devices. Older content simply won't have been designed this way and may as a consequence be a lot less valuable to companies.

The second challenge is from new business models such as open online courses and open source. Whilst there are still costs, these models allow companies to access lower cost solutions.

If the guerillas fail to move quickly and innovate we can expect to see further acquisitions of smaller more nimble companies.