The ever-changing market for Learning Management Systems (LMS) continues to evolve. Last year, Taleo, the largest provider of recruiting software, spent $100 million acquiring mid-market LMS vendor Learn.com. The company's strategy, which we supported in earlier blog posts, is to expand across all elements of the talent management domain and develop an offering which gives customers a "one stop shopping" solution.
The LMS market, which we have been deeply involved in for more than 13 years now, is now nearly $1Billion in size and continues to grow at low double digit rates. (Read our LMS 2011 industry study for all the details.) While it is not growing at nearly the rate of other segments of the market, the LMS market continues to grow and the space is reinventing itself as corporate training moves rapidly toward collaborative and social learning solutions.
Learn.com was a relatively small SaaS company (revenues around $30M) when they were acquired by Taleo, and their sales, engineering, and leadership team was very strong. The company had a deep understanding of the corporate training market, which brought a good set of needed skills to Taleo. But as with any merger, there were many parts of the company to integrate (engineering, sales, marketing) and a new product roadmap to build. Taleo rapidly developed an integration plan (many of the Learn.com resources were moved into Taleo's mid-market business unit) and has now started to operate and sell the Learn.com product set as an integrated part of the suite.
We had a briefing with Taleo this week and it appears that progress is excellent. In Q4 of 2010 Taleo booked $8.2 Million of LMS revenue, which is a 17% increase from its LMS revenue in Q3 and shows significant year over year growth from the prior Learn.com year. As a standalone LMS company, Taleo is now a significant player and its revenues are now high enough for the company to start to build a groundswell of LMS-related partners and consultants.
While it may appear that learning management systems are easy to build, in reality they have hundreds of important and complex features. With the engineering resources of Taleo, we can expect to see the Learn.com platform continue to evolve and in particular add more global enterprise-class features. It will take time for the entire sales and marketing organization at Taleo to fully understand the corporate training market, but clearly the company is off to a great start.
The LMS market continues to be highly competitive: Plateau, SumTotal, Saba, Halogen, and CornerstoneOnDemand (about to go public), and dozens of other companies compete with deep levels of expertise and product functionality. And many companies continue to buy standalone LMS systems for important applications like customer training, reseller and dealer training, and departmental training solutions. But Taleo is clearly now in the game, demonstrating to customers that the days of a standalone LMS are slowly going away, and it is now possible to buy an end-to-end talent management solution from a single supplier.
PS. Come Join us at IMPACT 2011, our upcoming Research Conference, to learn more about the rapidly changing LMS market as David Mallon presents out latest research on collaborative corporate learning and the state of learning technology. It is not to be missed!