This week another little bomb dropped in the corporate training market. Skillsoft, the industry giant in packaged e-learning and training content, acquired Mindleaders, one of the company's leading competitors.
This acquisition comes after Skillsoft's acquisition of ElementK and 50 Lessons in 2011, and a string of other acquisitions including the acquisition of Books24x7, NetG, and other smaller content providers during the years.
What does this mean to the $13 billion corporate learning market?
1. Quality instructional content continues to play a major role in corporate training and talent management.
Companies need off-the-shelf training content. Whether it be IT training, project management, supervisory skills, or industry compliance programs, organizations need to deliver these programs to employees on a regular basis. Skillsoft has staked out a claim as the "one-stop-shopping" for this stuff. The company already offers thousands of online courses and books and now adds more to this catalog.
Mindleaders, a mid-sized training content company, built a robust library of content in compliance applications (food safety, adult healthcare, etc.), and also partners with branded publishers to produce titles in leadership development, talent management, and other content areas. (Mindleaders has more than 4,000 courses.) Together this makes Skillsoft an even more indispensible vendor for the corporate training department. But even as this grows Skillsoft's library, the number of new content sources in the market continues to put pressure on the company to innovate.
2. New forms of online training are starting to encroach on the corporate e-learning market, led by MOOCs and easy-to-author tools.
The catalog e-learning market is now more than 13 years old (the word "e-learning" was coined in 1998, when this market was red hot). Over this period of time technology, bandwidth, and devices have dramatically changed. Courses built ten years ago are utterly boring today. We now expect online training to use video, run in mobile devices, and be totally integrated with social tools and online collaboration. To Skillsoft's credit, the company has evolved as well, now offering more than 12 different modalities in its content.
While Skillsoft has grown, new innovative companies like Lynda.com and Khan Academy now offer video-based education and training which is more "modern" and "engaging." (Skillsoft is moving in this direction also.) In fact corporate buyers tell us that Lynda.com's courses are so much fun that they see them as a recruiting tool. Lynda.com, which is a private company in Southern California which develops movie-studio quality content, is growing at more than 100% per year, largely because of its highly compelling online experience.
Enter the Free Open Online Courses
We must also understand that MOOC (Massive Online Open Courses), which are considered disruptive to universities, may chip away at the corporate e-learning market too.
What is a MOOC? It is a free and open course available online, often authored by a college professor or world expert (and delivered over months or longer). Any individual can go online now and take courses at Coursera, Udacity, Codecademy, Skillshare, P2PU, Udemy, and take courses authored by professors at major universities or world-class experts. These platforms enable professors (or other subject matter experts) to create courses which are then made available for free. Hence the term "massive" and "open." And universities like MIT, Stanford, Penn, Cornell, Michigan and others are jumping into this, giving these courses a certified brand.
Making this all easier, startups like OpenSesame are providing corporate "bookshelves" of these courses, making them easy for business managers to find.
Back to the Future
The idea of free, shared courses is not new. Back in 1999, before the internet was mature, there were a flurry of companies that tried this model (Click2Learn, now defunct, for example). A company called Desire2Learn just raised $80 Million in venture funding. The company looks almost exactly like Click2Learn from 15 years ago. The problem with the MOOC model is that "Free Content" without a strong brand and certification is far less valuable to use. And much of the "Free" courses just are not very good. (Read this interesting article from EdTech about the lack of real instructional design in many MOOC courses.)
So this time around we can expect big Universities to get behind many of these things, giving them the credibility people need to actually take advantage of these courses. The end result: many new forms of online learning are becoming available, and companies like Skillsoft which rely on the traditional model, are going to feel immense amounts of pressure.
(I cut my teeth in this market during my time at DigitalThink, an early pioneer in corporate e-learning, so I've seen this story before.)
This space is exploding and will not only transform education, but will dramatically impact corporate e-learning. I personally believe these types of systems are the biggest threats to Skillsoft and other packaged vendors.
3. What about Skillsoft?
All this begs the question of what's next for Skillsoft. Most big companies have Skillsoft licenses, so the company is now an institutional part of the training industry. Skillsoft's content library is the biggest in the industry, and the new version of Skillport (the company's LMS) has made major steps forward in ease of use and flexibility. And the company now offers content in nearly every major category, including leadership development, IT and technical training, and many compliance areas.
And as Skillsoft continues to grow its offering (Books 24×7 and Leadership Advantage are some of its hottest offerings now), the company continues to innovate. Skillsoft's offerings are pragmatic, business-focused, and built on a blended learning model. And the company now offers social features and video in many of its content libraries.
Today it is relatively easy to build online content. Unlike the market 12 years ago, we are now in a world where vertical and specialized content is easy to find and easy to build. So, similar to the market for books, music, and any other type of media, as the market becomes big more titles can be published. Skillsoft, maintaining its position as the "biggest" provider, will have to continue to expand its titles and integrate them all into its platform.
The world of online learning has become red hot again. Watch for a lot more to come.