There was a time when LMSs - those big software suites that coordinate and help master big deployments of e-learning, training and development - were the next big thing in IT training. But this year there wasn't a separate stream on it at the big Learning Technologies conference and exhibition - and only one out of 45 sessions even had 'LMS' in its title. Has LMS 'failed'?
That's way too strong a way to characterise the state of play. But there is no denying (see box) that the market for commercial LMSs is, if not dead, then pretty quiet. And while there is clear interest in open source alternatives and companies still see the need for a way to manage their e-learning deployments, both what buyers want from an LMS and where they will get this functionality from is rapidly changing.
It's not so much that LMSs have gone away but that it may make increasingly less sense to talk about them. Or as learning technology consultant Nige Howarth of Inspired Age summed it up for IT Training, 'You used to be told about aircon or power steering as great extras when you bought a car - now you just automatically assume they will be there when you pick one up. LMS is increasingly just part of the fabric when it comes to how we manage learning.'
That's not to say that if an organisation went to market today it would struggle to find a company able to sell and support an LMS - far from it. It's more that what those companies are asking for and what they are willing to pay for is a lot different to before the credit crunch.
'A few months back it was all about what web 2.0 features you had,' says Martin Belton, sales and marketing director of LMS player e2train, which has clients including O2 and Nissan Europe.
'There was great interest in how to increase user upload and user interactivity with material and so on. Now, the market has changed. As no one is going to dash out and recruit loads of new employees, their training needs have changed and so of course has the financial climate. Now it's all about deployment of LMS as a software as a service (SaaS) or as a managed service and there are different goals.'
Jon Øivind Stenerud, chief technology office of Norwegian LMS company Edvantage Group, which has ongoing engagements with organisations like Siemens, Lego and BP, agrees. 'The climate has changed. The RFPs [tender document for an IT solution] are much less about nice-to-haves in terms of features than a "back to basics" theme.
'There is still interest in the underlying architecture and the extensibility of a system, as organisations would prefer to make investments that offer them as much future-proofing as possible for when things turn around in the economy, but clients want to hear about the value they can get from using this system. And unquestionably, SaaS is coming of age in the LMS market.'
'A year ago almost all our systems were deployed inside the firewall; now almost none are,' chimes Belton.
So users still want to buy an LMS - but they want to do so as economically and efficiently as possible, it seems. One wonders what they still want an LMS for?
Recruitment is likely to be down so much this year (for example the news that the UK's leading graduate employers have reduced their recruitment targets for 2009 by 17 per cent since the latest graduate recruitment round began in September 2008), so what are they trying to train people about?
The answer, of course, is compliance and regulation, tied to an emphasis on deriving more value from internal (human) resources. 'There is much more emphasis at the moment in corporates on performance management - ways of tracking and measuring employees,' says Belton.
'The UK is the country in Europe where we see the clearest focus on the need to deliver compliance training on a recurring basis, and that's not a need that will go away; we have global clients as well who need to train 50 to 70,000 employees on an annual or biannual basis,' agrees Stenerud.
Overall, then, it seems that LMS customers want the cheapest LMS they can get as a way to get the maximum out of the people still working for them. If that seems a bit of a bleak statement, it's probably better to be more realistic about the function of this kind of learning tool than some of the grander claims floating about ten years or so back, when we thought instructor-led training was going the same way as the rotary phone.
Belton says: 'No-one wants bespoke - they want off-the-peg, low capital outlay and low manpower to maintain.'
If that is the context LMS suppliers are operating in, it's no surprise that there is growing interest in open source LMS, and in this category the Moodle system seems to be building momentum.
Equally unsurprisingly we have advocates of the system like Ray Lawrence, MD of training and support services firm, HowToMoodle, who told us: 'All sorts of organisations, from the NHS to academia to defence are all starting to use Moodle as there is no software licence cost, minimum risk in taking it up and, as you won't be dependent on the fortunes of a company to support it, your business continuity is safeguarded.'
Large UK charity Samaritans agrees. 'We were reassured that a lot of public sector bodies like the OU and NHS have started using Moodle and we have also found it solid and quite easy to train our people on,' says its training development officer, Nigel Ross, based at its main Surrey HQ.
'We have limited resources and needed to get something that was robust, would have longevity and would be low cost to support.' Samaritans needed an LMS, he says, to better track and manage the learning it needs to continuously deliver on non-soft skills to volunteers, managers and trustees at its 200-plus branches in the UK and Ireland.
There are of course arguments about whether open source is always the 'right' solution. 'I hear a lot about the rise of Moodle but I don't "see" it,' says e2train's Belton. 'I don't see how it solves what I hear from customers is their biggest problem - they want something they can buy as a service or start using straight away instead of putting in a lot of effort to make it work or customise it.'
Nonetheless, if you as a training manager have signed a cheque in the last six months for a standalone LMS not being delivered remotely, then you are not so much 'wrong' as certainly not in the mainstream.
'The problem with the LMS market when it started was that very sophisticated software was sold to very senior people - but it was a Rolls-Royce solution for a going-to-Sainsbury's problem. Too often you only used about 10 per cent of the functionality provided,' says Howarth (who should know - he earned his spurs at e-learning firm NetG, now part of SkillSoft).
'What's happened is that people know they want and need to do things like track attendance and completion rates of courses, bookmark courses, let people come in and out of content and so forth, but there are many cheap and cheerful ways to do that now. So LMS has gone from being this grand, encompassing piece of e-learning to just one part of it.'
LMS, then, has not gone but is now really part of a general (with small letters) learning management system approach. And that approach, in 2009 at least, is clearly marked 'low capital expenditure,' 'does the basics' and 'quick to deliver results' - and not 'advanced functionality', 'competitive differential,' or even 'web 2.0'.
Those aspects will come back, we are sure - but not for a while.
Is there still an LMS 'market'?
Yes, is the answer; Bersin & Associates claimed they found evidence that the 2006 global value of the LMS market was $480m (£336m). But it is a highly fragmented one, with a 2005 report by CLO (chief learning officer) magazine noting the six largest LMS product companies make up over 40 per cent of the market, and a wide range of other sorts of companies, such as ERP and e-learning vendors, also claim to offer LMS-like functionality.
In the struggle to get established many small players either battle for niche positions or fall victim to a slow process of consolidation - for example WebCT has been bought by Blackboard and will be phased out completely by 2011. Apart from Meridien, the two biggest standalone LMS firms have themselves acquired others or are indeed the result of combinations themselves, namely Saba and SumTotal, which together account for nearly a quarter of the whole ongoing market.
But even these relative LMS 'giants' are, if not struggling, then hardly running at full-tilt. Saba - which these days labels itself a 'human capital management' firm - claims 17m customers globally and 1,300 customer organisations and for its last full financial year saw sales up 7 per cent, to $107m (£75m) - but also posted a $4m (£3m) loss.
Meanwhile rival SumTotal, formed of the 2004 merger of Docent and Click2Learn, also saw turnover up for its last (pre-credit crunch) fiscal year, with sales boosted by 15 per cent to $123m (£86m), but it too made a loss for the year as a whole - $8m (£6m).
It's unlikely these bigger companies will go under, but it all seems a far cry from the heady days of the start of the decade, when LMSs seemed one of the brightest promises of the whole dotcom bubble.
