The current economic climate could be good news for firms in the e-learning market, as companies are looking to control costs while e-learning broadens from IT-related training to more general skills.
The corporate e-learning market generated nearly $2.3 billion in 2000, and is on track for a growth rate of more than 50 percent, which will allow it to exceed $18 billion in 2005, according to International Data Corp. (IDC).
“In 2000 the U.S. corporate e-learning and corporate training markets experienced a bit more growth than we anticipated. We are seeing that companies, operating in a tight labor market, are being forced to retrain their current employees and many are choosing to outsource those roles,” said Cushing Anderson, program manager, IDC’s Learning research. “In addition, corporations are beginning to recognize the strategic foothold that e-learning can give them in the market.”
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The shift in the e-learning market from IT skills training toward the non-IT or business skills segment will open up new markets for e-learning. In 2000 the non-IT segment accounted for 24 percent of the market, but is expected to capture 53.8 percent by 2005.
“Vendors are seeing larger audiences in need of non-IT training. This is forcing companies previously focused on IT rich content to create more business skills training over the Web,” Anderson said. “Yet this will not be the only challenge learning vendors will face. Although the market will grow by more than 50 percent vendors will have a tough road ahead with customers tightening budgets and competition continuing to grow.”
Live e-learning represents a fledgling segment of the e-learning market, one that is expected to grow more rapidly than asynchronous e-learning. Live e-learning technology and training providers generated more than $125 million in annual revenues in 2000, and these revenues are expected to continue growing at approximately 50 percent per year, reaching $750 million of annual revenues by 2005, according to a white paper from Eduventures.
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The North American market for learning management and learning content management systems will grow to $11.7 billion by 2005, according to research by Kinetic Information and Collaborative Strategies, which also predicts a fresh opportunity will arise from the marriage of enterprise content management and hosted Web-based learning services. The combination of content management and e-learning should appeal to customers’ eagerness to gain access to all relevant learning materials while also addressing the all-important bottom line and recent concerns over travel.
“The consensus view is that while e-learning definitely is valuable, it is difficult to justify in terms of hard-dollar savings,” said John Parker, Kinetic Information senior analyst. “Many organizations, therefore, will begin utilizing the technology on an outsourced basis.”
It is not yet clear whether outsourcing will occur via straight subscription with an ASP or through the auspices of a third-party hosting agency, but Parker said he believes the services route is an excellent way for customers to familiarize themselves with e-learning while not losing focus on their core activities.
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