Global spending on learning management systems (LMS’s) will grow at 10.4 percent to more than $1.8 billion in 2012-2013 — down from the growth rate of 14.7 percent in 2011-2012.
Summarized in a Bersin & Associates complimentary WhatWorks brief, “Learning Management Systems: Finding Your Way Through the Maze,” the findings also show that despite on-going consolidation in the market, customers find it an increasingly complex and difficult market to navigate.
“The LMS market continues to be one of the most complex and dynamic in the industry and, with over 500 providers, buyers need help more than ever before,” says Josh Bersin, chief executive officer and president. “This annual study delivers a combination of detailed data and practical wisdom that makes it the definitive guide through this market maze.”
The study found that as features commoditize and providers multiply, with growing numbers of easy-to-implement software-as-a-service (SaaS)-based systems and flexible pricing models, LMS buyers face an extensive number of available choices and differentiating providers grows harder even though basic functionality is fairly common.
“With more than 500 learning management solution providers to choose from worldwide, the task of finding the right solution for our needs is overwhelming,” says Jason Lei, a senior analyst for JetBlue Airways Corp. “By providing independent analysis of this huge market, Bersin & Associates’ LMS research has reduced the time needed to review and select providers.”
The report concludes:
>> Slower market growth and the commoditization of LMS features make this a buyer’s market. Much of the overall growth of the 2012 global LMS market is coming from outside of North America and in small and midsize companies. Between 2012 and 2013, the study predicts relative growth will slow to 10.4 percent from a relative growth rate of 14.7 percent in 2011-2012. Slow growth of the global economy, saturation of the market for large and global enterprises, a proliferation of providers with easy-to implement SaaS-based systems and flexible pricing models will contribute to a slowing of growth. These factors, along with the commoditization of LMS Features, will give buyers an edge in this market.
>> This is a global market with no clear leaders. With more than 500 providers worldwide, none of whom has greater than nine percent market share, emerging providers may have similar or greater capabilities than market leaders. A buyer no longer needs to stick with a major global provider. A buyer may find the right solution in their own backyard.
>> New social capabilities are reinventing the learning management market. Nearly half of large organizations are purchasing social platforms at the departmental level to learn about them and to test their effectiveness. These social capabilities are not yet integrated into mainstream platforms. Organizations that understand the most effective social applications for their strategy will be best equipped to evaluate next-generation providers as they integrate these capabilities.
—More info: www.bersin.com