Skillsoft buying SumTotal – My Take

Like many of you, I was surprised to find out that Skillsoft is in the process of acquiring SumTotal. The reason for the acquisition at least from a press release and information on the purchase (and available for viewing on the Skillsoft site), screams of HCM (Human Capital Management)

HCM, among other things is all about HR (human resources), HRIS (human resources information systems) and the wherewithal of all that is part of it.  Here according to the documentation listed on the Skillsoft web site, is what they see as the real value of the SumTotal acquisition (text listed is actual wording on their document):

• Skillsoft and SumTotal provide highly complementary HR solutions
• Combination of Skillsoft and SumTotal offers comprehensive, content-rich HR solutions

The document provides other information, including “Why Skillsoft intends to purchase SumTotal”.  Among the statements as to why, is “Comprehensive HR suite, including learning, talent and workforce management”.

HR and Learning – Internal

As a former training director and manager, who often reported directly to the CEO or COO at various firms, HR and Training were separate entities. In fact, each had a separate department.

Overall, this hasn’t changed in the industry.

Yet for some reason, Skillsoft sees HR and Learning interconnected, which to me, makes virtually no sense.

No offense to those in HR, but a person who runs HR sees training in a different light than someone who runs and is the stakeholder in training.  The same can be said from a learning perspective.

I am always bothered when vendors see the entities as one in the same.  They are not.

Ask yourself, how many HR people do you know that are aware of ADDIE?  What about Gagne (if you are one who still sees it as an appropriate mechanism behind learning)? 

Ask yourself, how many Training folks are experts or knowledgeable about benefits, compensation, employee regulations, etc.? 

If you currently oversee Training do you?  Do you know the labor laws for you state, region and if applicable (country)? 

HR and Training – External

Who provides learning or training (some people see a difference between) to customers?  Last time I looked it was training or at some companies – L&D (if training is not an entire entity of itself).  It wasn’t HR. 

B2B training? HR or Training or L&D (depending on the company)?  Usually the latter i.e. training or if it does not exist, L&D.  The same applies to B2C.

I never even have heard of a HR employee or department/division head providing training to customers.   If I was a customer and again, no offense to people in HR (some are my closest friends are in HR), I wouldn’t want an HR person providing training.

This gets back to the whole shoving of learning under HR angle.  I seriously wonder if those vendors who push this angle, have ever worked in training at a company (inc. non-profit) or at an association. 

I mean when their own people train their customers, do they come from HR or Training (or again as stated above L&D)? 

HR is #1 and Training is #2 (i.e. under HR) – and not what might have popped into your head at this exact moment

There are plenty of companies who have the HR department at the head of the class and training under it (as opposed to two entirely separate entities).  But, ask anyone who works in training – their perspectives on training and their approach is different than someone in HR.

Even if you have an L&D department and it is under HR, it still applies. 

I understand that at many firms the term “training” has disappeared and been replaced with L&D. Heck, I have even seen workforce management.  Let’s say you are L&D, and provide learning to customers. 

Are your “trainers”, people with an HR background?  If you were a customer receiving training on your products/services, would you want someone training you, with a pure HR background?

I doubt it.

Getting back to Skillsoft and SumTotal

I provided the previous points, because I believe that the “learning” within HR, is troubling, especially with B2B and B2C. 

To think that a vendor such as SumTotal, who sells SumTotal Learn and offers a multi-tenant platform with e-commerce, would see learning as an entity with HR.  Because frankly, in my opinion, it is ridiculous.  And before you say, well he is anti-SumTotal, let me remind you of a couple of facts:

• I have SumTotal in my top 25 learning management systems mid-year rankings of 2014
• There are plenty of other “LMS” vendors who pitch learning under HR or as a true component of HR)

As for Skillsoft, they are a content provider.

Skillsoft at this present time, does not sell Skillport as a separate LMS. 

Rather, they have told me, they will toss it in (my words, not theirs) to customers who purchase courses (they did not say whether there was a min. requirement) and either do not have a LMS or want a secondary LMS, for perhaps (again my words) a specific department. 

My Take on the whole acquisition

I have no problem with Skillsoft buying SumTotal. Honestly, I could see them buying some other big name LMS vendor.  In fact, I am still waiting to see, if that occurs – uh, not Skillsoft buying this vendor, but someone else.

Will there be a Ripple Effect?

Overall, not really.  Sure, there will be people who will think – here it comes – consolidation – but the data does not back that up. 

As noted last year, the consolidation rate was .0025% in the entire industry (calculated on number of acquisitions based on 580 systems in the market – at that time).

That is not a big number in terms of consolidation.  I haven’t run the numbers for 2014 (I will in Dec.), but I would be shocked if it was 2% (partially due to the number of LMSs, learning systems or whatever they want to call it, in the industry. 

At present, I have in my private directory, 625 systems and I continue to see new ones popping up.  In fact there are more newbies than ones disappearing off the planet.

So, from that angle, I don’t see it.

HOWEVER

Depending on how Skillsoft plays this, there could be a ripple effect that will benefit consumers.

IF Skillsoft includes some courses as part of you buying SumTotal, regardless of it is one module or all modules (SumTotal Learn for example, is a module), then I do believe you will see

• More vendors including courses at no additional charge into their LMSs  (Right now, there are some vendors, not a lot, but some, who include courses in their systems as part of the purchase)
• The courses/content will either come via the vendor themselves – as in they have created courses/content bundles OR via a 3rd party partnership with another course/content provider

Ripple Effect for LMS Partners

I do see some potential takeaways with the buy

• Potential for some LMS partners to pull out of partnership deals with Skillsoft

I mean would you want to buy courses from someone who is now a competitor of yours?  And the last time I looked, there are plenty of vendors who see SumTotal as a legitimate competitor.  

Equally, I know vendors who are partners of Skillsoft and are competitors (how they see it) with SumTotal.

If I was them, I would bolt. 

• Dropping of potential deals or deals in the works, with LMSs who are seeking 3rd party content/courses to offer in their course marketplace OR as available for customers of the system (assuming that the vendor does not show or have a customer marketplace per se).

Again, for myself, this would be a no-brainer.

• Other 3rd party providers stepping up their game to attract new partners

Another “no duh” moment. 

But here is the thing, while there are plenty of the 3rd party providers out there, many are not aggressive or are actively going out and seeking partnerships with LMS providers. 

In fact, it is usually the other way around. 

If I was a 3rd party provider, I would be start making a lot of calls to see if I could strike new partnership deals with LMS vendors.

If I knew of LMSs who are current partners with Skillsoft, I would target them first.  But that is just me.

Bottom Line

How will other LMS vendors react?

Will they add some courses/content into their system at no charge to their clients?

If yes, will they retro it (i.e current customers get it to)?

Or only offer it to new customers?

For me, it is an easy decision.

Include it to both – current and new.

Because at the end of the day, what makes a LMS successful is the content.

And why let someone else have all the fun and more importantly, new business

When it could be you.

E-Learning 24/7