The LMS market – bigger and better or just bigger?

In a bid to keep pace with developments, I have been reading a few research reports and papers on various themes of the eLearning industry. The visit to Learning Technologies is still running through my mind as I continue an attempt to complete my mental sketch of the status of the market. It is clear that the industry is growing – getting bigger. Bigger trade shows, bigger stands, more exhibitors. The existing players are consolidating and that acquisition activity indicates a confidence from sources of funding. The current industry is growing. I wonder though, that it is an existing shape getting larger rather than changing shape or developing in new ways?

As providers grow, they are adding features and functions to their systems but are the customers (to say nothing of learners) doing new work with them?

Maybe.  A bit.

One of my self-study texts has been the Saffron Interactive report by Edward White, “The LMS: Are we experiencing a sea-change?”  (To read the whole report, I think you need to get in touch with Saffron and request the PDF). It is the fruit of an extensive survey it aims to dig beneath the headline growth of the LMS market from $2.65bn in 2013 to (a forecast) $7.8bn in 2017 (hence the acquisition funding). Whatever the definition of an LMS in those figures, there are a lot more of them and they are a lot bigger. So, all good then?

Not so. The survey asked that nagging satisfaction question about recommendation: “How likely are you to recommend your LMS to a friend?”*  It seems that only 15% answered positively, 57% said they were unlikely to. Yes. That’s right. An industry sector growing by almost 200% in four years (really?) has a satisfied customer base of 15%. As the youngsters say, “what’s up with that?”

Whether there is a sea change on the horizon or not, the providers need to find one. Edward points to user expectations now being set by social media tools and content discovery experiences.  This is an area in which all corporate technologies suffer by comparison with personal tools. There is also an anxiety about the adaptability of these platforms to future needs. This is where the industry growth looks really interesting. Existing services are selling more but, according my highly unscientific scanning of the exhibition floor and other news, the start-up and new entrant scene is still quite modest.

There was no start up zone or innovations space at the Learning Technologies exhibition. That may be a flaw of the organisers or an indication of an immature market. Either way, that looks like it could and should change. There are plenty of dissatisfied customers out there and there seems to be investment funding around too. Smart new players picking off areas of poor performance in incumbent businesses at lower cost and higher quality should be queueing up very soon if they are not already.  That is the familiar pattern of industry evolution in the digital sphere.

Now, where is that drawing board…


* In my world, this would be a most unusual question to ask a friend but I think we get the point.

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