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New Bersin & Associates Study Shows Learning Management Systems Market in Transition

Firm predicts 2009 will be pivotal year for LMS solution providers to sustain market share and expand offerings to meet advanced market demands

St. Petersburg, FL – April 15, 2009 -- Bersin & Associates, the only research and advisory firm focused on enterprise learning and talent management, today announced the release of its latest study, Learning Management Systems 2009: Facts, Practice Analysis, Trends and Provider Profiles. The annual study, to be unveiled today at Bersin & Associates’ annual research conference, IMPACT 2009: The Business of Talent®, is the most comprehensive market review and buyers’ guide for learning management systems.

Findings from the study were presented at a press event, The Pivot Point for LMSs: Substantive Changes for New Era of Corporate Learning, earlier today, at The Renaissance Vinoy Resort in St. Petersburg, FL. Please contact diane.siroky@bersin.com for more information about the study.

“The LMS market, now about ten years old, is on the brink of a major transition,” said Josh Bersin, president. “Most learning management systems primarily manage formal learning – instructor-led events and traditional e-learning courses. But organizations today tell us that informal learning – such as with coaching, mentoring, collaborating, and information sharing – actually drives far greater business impact.

“Consequently, LMS vendors are under enormous pressure to develop and implement features to support informal learning. Additionally, they are competing with a wide variety of new, low-cost systems for collaboration which support many informal learning needs. While most LMS vendors are making major investments, they are not keeping up with customer demand for informal learning support. Therefore, we’re seeing buyers starting to tie together third-party and internally developed systems to meet their needs.”

Bersin & Associates began studying the LMS market in 2003; this is the company’s fifth published study on the LMS market.

The 180-page study is based on detailed briefings and product demonstrations provided by LMS vendors and an extensive quantitative survey of more than 525 LMS customers representing a broad cross-section of industries. Among the key findings:

  • The role of the LMS is evolving. In addition to managing formal classroom instruction, virtual classroom training, and e-learning, the LMS is increasingly viewed by companies as a platform that enables informal knowledge sharing, collaboration, networking, and performance support. Providers are responding by adding separate social and informal learning modules to their product suites and platforms, selling separate social software platforms, or finding OEM partners.
  • Corporate buyers want to integrate their LMSs with other talent management software. As a result, LMS vendors are rapidly expanding their offerings into performance management, succession management, and social networking to compete in the market for talent management suites. Likewise most traditional HR software companies are looking at ways to build or integrate LMS systems into their solutions.
  • The market continues to grow. The study shows a projected 8.4 percent growth over 2008, with estimated revenues for 2009 of $817 million (compared to 10.6 percent growth and revenues of $754 million in 2008).
  • Saba and SumTotal remain the two largest players in this market, each with market share above 10 percent. Oracle, SAP, and more than 60 other solution providers compete for the rest of the market.
  • Software as a service (SaaS) is the most popular delivery model for LMS applications, even for large organizations. Forty-seven percent of organizations with more than 10,000 employees report using a SaaS or hosted delivery model.

The study includes discussion of market drivers, major influencing trends, and predictions for what’s ahead; an in-depth analysis of LMS features from basic to advanced; best practices for system selection and implementation; and profiles and analysis of the top 30 solution providers.

Vendors profiled in the report are: ACS, Blackboard, Business Training Library, CertPoint, Cornerstone, Element K, GeoLearning, GeoMetrix, HR Smart, Learn.com, LearnShare, Meridian KS, Mzinga, NetDimensions, Operitel, Oracle, Outstart, PeopleSoft, Plateau, RISC, RWD, Saba, SAP, Silkroad, SkillSoft, Softscape, SumTotal, Technomedia, TEDS and WBT Systems.

“These are all the major players, accounting for more than 90 percent of all LMS revenues in the North American market,” said David Mallon, principal analyst and one of the authors of the study. “Because this study combines research-based guidance with objective vendor assessments, it is an invaluable guide to any company looking to understand this market, narrow the field of solution providers, and plan for a successful implementation.”

The study also includes discussion on implementation models and challenges; outsourcing options; developing and communicating a business case; and purchasing options for small business, mid-market, and departmental solutions. To help organizations navigate the complex market for learning management solutions and identify the short list of providers, the study includes Market Maps® which depict relevant differences among providers. In addition, product capability charts provide a framework for evaluation against a standard set of criteria.

Learning Management Systems 2009: Facts, Practice Analysis, Trends and Provider Profiles is available at no cost to all Bersin & Associates research members. Non-members can purchase the study for $1,495. For more details, including an executive summary and a table of contents, click here.

About Bersin & Associates

Bersin & Associates is the only research and advisory firm focused solely on research in enterprise learning and talent management. The company’s WhatWorks® research and research-based services are designed to deliver actionable and practical guidance and to improve operational effectiveness and business impact.

Bersin & Associates research members gain access to a comprehensive library of best practices, case studies, benchmarks, and in-depth market analyses designed to assist professionals in making fast and confident decisions. Research areas include planning and strategy, learning programs and delivery, talent management, leadership development, talent acquisition, technology and infrastructure, and measurement and analytics. Member benefits include strategic advisory services, briefings, forums, analyst interaction, and workshops. More than 4,000 organizations have used Bersin & Associates’ research to guide talent and corporate learning strategies.

Bersin & Associates is the host of the only research conference on enterprise learning and talent management, IMPACT 2009: The Business of Talent®, scheduled for April 14 -16 in St. Petersburg, Florida. This year’s conference features more than 60 senior HR and learning leaders; many sessions will highlight cost-cutting strategies and ways to improve business impact through innovative approaches.

For more information, go to www.bersin.com or call 561 455 0622, extension 223.