Where the Corporate LMS Market is Heading (2022 and up) – The Amazing E-Learning Roadshow
Do you ever sit there and think to yourself, okay, I have to write this, I’m not sure where to start, where to begin, but I know in my heart, this is where it is going. You say to yourself, I have mixed feelings about this, but the trend lines, the data is all pointing this way – the systems, the business environment is all aiming this way.
And yet, you know what you will write, will not be all rosy for everyone. You know that it is a time to reflect and ask yourself, “will it change?”, “is there something that can be done?”, “Why do people like Coke Zero. Anyone who says it tastes like it has sugar in it, clearly has never had a Coke, with sugar in it.”
By now, you are thinking, “Oh, he is about to say the LMS market is finished, OR that they are dinosaurs doomed, and thus us naysayers have been right all along,” sorry to disappoint, but no, no, and no.
I’m saying none of that. Nor is this post about any such thing as that. LMSs are not disappearing. LMSs are not becoming performance support systems, nor performance management/talent management systems, nor heavily focused on HR, nor heavily focused on compliance (unless folks want a system focused on compliance – then yes, you can find quite a few – and not all our LMSs).
What is everyone talking about these days?
Skills. Skill identification. Skill development. Skill building. Skill gaps. Skills tied to job roles. Skills tied to career mapping. Skills around strengths. Skills around weaknesses. Skill validation. Skills tied to your interests. Interests tapped to skills. Skill libraries. Competency model for skills. 3rd party integrations with skill-specific solutions such as EMSI and Burning Glass. Scrubbing LinkedIn for the identification of job roles and skills. Looking at job boards to pull out data for jobs (thus roles/titles) and skills needed.
Skills tied to content. Skills tied courses. Skills tied to webinars. Skills assigned. Buying 3rd party content that aligns to skills.
You might think to yourself, this must be a fad, at some point, people will focus on something else, and this skill drive will follow so many other “hot” then not so “hot” angles.
The Year Of
2012- Mobile Learning. Who can forget how hot this was? It went on for a few years as “mobile this, mobile that, mobile first, mobile responsive”
2017 – Micro-Learning. The darling. Micro learning this. Micro-learning content does that. Micro, micro, micro.
2018 – Video – Video reigned supreme.
2019 – Machine Learning, which vendors nowadays spin as A.I. It is all about machine learning. This is the key to learning and training success. A.I. this, A.I. that.
2020- Playlists/Channels – Looks like this, hey Netflix like that. We can do this, we can make it look like that.
2021- The real kickoff around skills.
Are those previous hot items being seen in systems today? Absolutely. Are they getting better and better? Well, depends on the vendor, some are, some are not. Some vendors tapped into this capabilities way before the masses, some didn’t. You would buy an LMS, even in 2000, and it could help you identify skill gaps – so that isn’t new. You assigned courses to folks to acquire skills or provided them an opportunity for personal and professional development – ala acquiring new skills.
So the skills in general isn’t new.
What is new, is the way skills drives everything, and feature sets, capabilities and so forth is tapped into skills, which leads to what will become of the LMS market specifically.
My initial thoughts I wrote about where I stated that the LMS market will still be the biggest segment by 2025, and that will still be true.
And I noted that Talent Development Platforms would be the second biggest segment, followed by skills platforms, I realized the third “skills platforms” are already bouncing into the other types of learning systems – LMSs, LXPs, and so forth around content, with minor exceptions.
In the skills platform segment, you will find two types of systems
- Skills measurement – No content here. Total skills validation – self-ratings, manager ratings, generally speaking the UI/UX is not great. But the folks who want it, aren’t buying it for fancy. They are buying it for metrics that they believe will identify skill patterns (S/W).
- Skills platforms tied around content. Generally speaking, the UI/UX is far better than anything you will find with the first bucket. Feature sets seem pretty similar to one another (a separate post will cover this, in May), but there are some interesting items. Pluralsight for example is all about technical skills. Some skill platforms focus only on soft skills. Some try to mix. Some have virtual labs, some don’t.
Many of the higher-rated skills platforms focus specifically on technical skills. Some are trying to do both, technical and professional/workplace skills. Features ubiquitous in the LMS market are appearing as well. For many, it is too early to see a true mesh, but the functionality is slowing heading that way.
It has already begun…
As you can see, getting to the point (you need some background first – i.e. what is above), is not so simple, but here it is
The LMS will change. Learning once at the forefront – you know those bogus terms that it was all formal (not true) and not informal (not true, it always was a feature), are not the key takeaways here, because assigned learning and self-selected learning will stay, and grow – depending on how the client wants to use the system.
But LMSs will splinter into three groups. A one size fits all for learning/training will change.
Group One (aka G1C) – Customer Education
These systems are over 80% focused on customer education (aka customer training), partner training, B2B/B2C. They may do some business with an internal/external (this means employees and customers are on the system, separated by tenets – parent/child) but the core is still customer focused. Some will even accept employees only (internal) but we are talking less than 15%. The feature sets will adapt to this specific segment. Today, that is partially true, but so much more has to be done, especially around metrics and segmentation of data/sales/capabilities of each tenet and so forth. If you are an association, these will be the systems you want. Skills exist – solely because of market demand, but interests weigh equally. Select a skill or interest and here is some content. But the core is content tied around whatever the company (i.e. the client) is selling/providing to its customers and partners (i.e. products, services, ideas, whatever). Today it is proprietary-based specific, but down the road, as 3rd party content providers see the revenue potential, some systems will allow you – the client – to sell said 3rd party content – to your customer base. Of course, you can provide your customers, free content and even 3rd party – you just can’t charge.
Of the three groups, from a vendor perspective, this segment has the most potential revenue-wise, the highest loyalty, and the greatest growth (especially if you find a company that has customers, and still wants to provide learning/training to their employees, but customers are the keys – and trust me, there are plenty out there). Content curation exists here too. Machine Learning is a bit behind, for the most part, Digital Coaching/Video Skills Validation/Scenarios though will be high in the coming years. As the systems skew further and further towards customer education, it will be clearer and clearer for consumers. Gamification still plays, and a whole mantra of sharing the knowledge and discovery will play into it.
Skill platforms that are skill-specific will play in this group. This will be especially true for technical skills who target a direct-to-consumer model or a B2B/B2C model.
Group Two (aka G2S) – Skills Tied Around Job Roles/Career Mapping – Employee heavy focused.
They exist today, and while they are not as big as group three, they will eventually become a TDP (whether they promote this externally or not, is the unknown).
The segmentation will break, of course, you will have systems more tuned in with the small business market or Enterprise or Large Enterprise. Some will try to play in all three, that exists today and won’t change.
But they will become more along the lines of what a talent development will be – that is to say, learning + Skill Mapping and Job Roles + 3rd party content. Right now, they are not fully there yet, but so many have crossed the boundary and pushed a heavy dose of skills tied around job roles as the key – the big takeaway. The missing part overall is the lack of extensive skill functionality – only a few have what I consider the skills capabilities essentials, and the 3rd party content marketplace (uh, the client buys it and gives it to their learners for free). Content curation is a mixed bag for right now, some do a great job, most don’t. A.I. is all over the board. Gamification and the usual stuff exists. A few will go into specific “learning insights” to delve further into the whole skills tied around those job roles or job opportunities if you will. The systems will not add recruiting, nor other HCM functionality.
Although some will eventually offer a streamlined tied to you applying for opportunities at your company, from within the LMS – going to your HCM – which handles all of that. In fact, a few systems already offer this (included, uh, except you pay for the HCM or whatever other SaaS recruiting solution, etc.). The “interests” i.e. folks who are interested in learning a skill not tied to the job role, will be the wild card. Some systems will offer this as a wide across feature (an option for administrators) and push the split approach in a manner of speaking. Others will push the skills tied to the specific job role, and if you want to learn skills not tied to the role – it’s an option, but most of their clients do not use it for that.
E-Commerce will still exist for those that have it today, but if its not a need, then it’s not there. There isn’t anything stopping a client from using Group two, for their customers. But those folks who buy systems in group two, are not buying it for their customers. These systems will be 90%+ for employees (internal).
Skill platforms that are skill agnostic will slide into Group two, but will not be a full blown TDP. They will focus on what they do best, add the 3rd party content and virtual labs (where warranted), and a few other items – but they will be employee driven, and that is the takewaway.
Skill measurement platforms which do not have content at the present time (there are two outliers who do), will eventually add the 3rd party content/client can upload their own content. This in inevitable, not because they want it to be, but because customers will ask for it. And to compete, as Group two add similar metrics, the employers who are using SMP as just a data sheet, will have to validate themselves to decide do they just want this OR get all that? They will not go full TDP here, because of their approach and focus, but they will not stand by and solely be a data validation angle either.
Group Three (aka G3)
Similar to group two, but they will try to play 50/50. This will be a struggle I believe, because in the end, as it relates to R&D, they will need to make a decision on which way they want the system to skew or slide to – I mean yes, you can be general enough for everyone, but with skills there are limitations.
This group is what I see as the wildcard, depending on how well they can straddle the two groups. A vendor such as Schoox for example, which skews heavily towards employees, does offer e-commerce and has multi-tenant. They haven’t reached an extensive e-commerce capability as of yet. Let’s say they do by end of 2022. And let’s say they continue heavy with the talent development platform side. Then yes, they would be in this third group.
Of all the groups, the third group will have the most vendors. And some will do a far better job than others. The challenge is trying to dip their toes into group two, without pushing so heavily, that they lose out deals to group one, and fail to maintain enough of a balance to stay within-group three. I think the more realistic number of percentages will be 70-30 or 60-40 for group three. They will eventually have enough on skills that warrant interest, and not wane interest, as well as sort of the “one size” tries to fit all.
From the LMS Side where do they fit today
Let’s be clear, this is a forecast of where the LMSs are heading. It will not be tomorrow. Or next week. Or even by the end of this year, showing the clarity, but you will see it – if you look close enough.
Looking wide though, you won’t see it. By the end of 2022, it will come into more of a sharper focus.
2023 – Total focus.
That isn’t to say, that a vendor will think they are not any of the three groups, but when you dive into the details, you will see, and yes, they will be in one of them.
Each of the three groups can have the LXP layer (although honestly, Group one, it will be less so – they will need to add it, to compete against group three – especially when it comes to 3rd party content – but the Netflix or playlist look is already appearing in group one systems.
Who plays in Group 1 today
The top two are Thought Industries and Intellium. Eurekos will rumble in there shortly.
The funny thing here is that many former LXP vendors are actually sliding into this group. Skill platforms are here already. Degreed of course stands out here. As of right now, Schoox is here too (But they are a wild card, my gut says they will stay more in Group two). Cornerstone Learning likely will end up here, although with Cornerstone Develop and if they wanted to – they could slide into Group three (hence another wildcard).
SAP Litmos. Docebo. Absorb. EdCast Spark. EdCast XP (Wildcard, because today, they are truly more on group two, with the career mapping add-on, but they have customer academy for extended enterprise aka B2B/B2C, customer education). Fuse is here too. Brightspace by D2L (Corporate) is here.
The wildcards like EdCast for example, may look at having an edition that is solely for customers, and then another version that aligns more with Group two. To me, that is the right move. The same with Cornerstone.
If a vendor is still an LXP, then yes, they are still an LXP. This is after all talking about LMSs (including those who left LXP but have many features similar to an LMS – just not all).
Will there be outliers?
Yes, but within three years, I believe they will slide into one of the three groups. I mean you can be in group two and be streamlined, just as you can be in group three and be robust. Robust and streamlined are based on what the vendor wants to build/do, and customer demand or interest. Therefore, in Group two for example, you will have robust and you will have streamlined. You will have pricey and not.
The same for group one and group three.
This may not be the forecast that folks want to read or hear (podcast version coming next week), but it is coming.
A seismic shift.
Tectonic plates tapped by skills. Customers. Employees.
Great insights, very informative!
Why do you think it is now the “year of skills”? Do you think it has anything to do with the pandemic accelerating the shift to digital, thereby revealing/causing competency gaps?
Looking forward to the podcast.
No. Online learning has been around since the late 90s, and LMSs and e-learning, in general, were established to identify skill gaps and to help improve skills. What’s new is the “visual” push-on skills. The industry bounces from something hot to hot yearly. Skills is the driver today. In two years? Who knows. The pandemic only boosted learning system sales as folks wanted a now. Most white-collar workers take online courses at home, not in the workplace (before the pandemic), so while remote workforces were new – in terms of totality, the accessing of online learning from home was not. Let’s not forget that ‘skill-building doesn’t focus on the blue-collar workforce and this a huge problem. I mean when was the last time you saw someone in the warehouse floor have an opportunity to learn skills to work in the office? They should, but for whatever reason, companies perceive that if you are on the warehouse floor you have no ambitions or interest to do anything else than what you do on the warehouse floor.
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