Ambient IT Training Snapshot - Jan 06

Key Findings from Ambient Insights 2006 Snapshot of Learning Technology Trends in the US IT Training Industry:
The Learning BPOs reinvent the supply chain and accelerate the demand for learning technology products
Virtual Instructor-led Classrooms, Virtual Labs, Live Mentoring, and Process-Embedded Learning Cannibalize Classroom and Self-paced eLearning
Ambient Insight LLC Sam Adkins, Chief Research Officer www.ambientinsight.com sam@ambientinsight.com
Agenda: 2006 Snapshot of Learning Technology Trends in the US IT Training Industry

Data in this presentation is US-only
Introductions
Pedagogically-defined Learning Product Taxonomy Key Findings
Learning Product Buying Trends

The Impact of Learning Business Process Outsourcing IT Training Trends linked to the New Stack
Who gets Trained?

Who is the Buyer? And What are They Buying?
Ambient Insight 2006
Ambient Insight Learning Technology Product Taxonomy

5 types of buyers, 9 product types, 5 types of users, and 4 vendor types
Note: The Consumer is the ONLY segment in which the buyer and the user are the same. In all other segments, buyers and users are different demographics.
Key Findings: The Old Industry is Gone

Ambient Insights 2006 Snapshot of Learning Technology Trends in the US IT Training Industry
The US IT Training Industry has never recovered from the Perfect Storm: 9/11, dot.com meltdown, stock market crash, recession, IT spending slowdown, downsizing, and outsourcing The old industry is gone and will never recover The New Stack creates a new user demographic and a new buyer demographic The Learning BPOs have reinvented the supply chain and are accelerating the demand for learning technology products There is a vast grey market now offering IT Training products and services outside the legacy channel system
Virtual Instructor-led Classrooms, Real-time Virtual Labs, Live Mentoring, and Process-Embedded Learning Cannibalize Classroom and Selfpaced eLearning
Key Findings: The New Industry is Here

Continued accelerating commoditization and pricing pressures on IT Training products caused by:
Steady decline of training budgets and training benefits Rapid decline of internal HR and Training departments in the US Steady reduction of internal IT staffs and IT population in US Migration of staffs and budgets out of legacy buyer organizations and into Outsourcer firms
Corporate training operated by outsourcers is a profit and loss operation. Employee Performance is secondary to the P&L Outsourcers aggressively moving customers away from highcost, low-margin products to low-cost, high-margin products Private labeling of products and services is wide spread (your outsourcer uses an outsourcer who uses an outsourcer) Largest Training Services buyer is now the Outsourcer
across Consumer, Academic, Government, and Corporate Segments

Total US Education and Training Market 2006
Total US Education and Training Market 2006-2011

across Consumer, Academic, Government, and Corporate Segments
US Learning Product Demand 2006-2011: Courseware eLearning Products versus Non-Courseware Learning Products
LMS-CMS is Commodity Market Now: Low-cost Learning Appliances and Open Source Solutions Emerge Aimed at the Massive SMB
LMS market across all buyer segments flat with .31% five-year CAGR Revenues in steep (-20.6% five-year CAGR) decline in the Enterprise Demand high but low-cost LMS platforms, and learning appliances exploding onto the scene Hundreds of new LMS companies offering very lowcost alternatives
LearnShare consortium enters the market with enterprise and SMB-priced products NetDimensions and dozens of others offering very low cost enterprise platforms Attend Software, Makau, Virtual University Systems, Xornet, 360training, and Dell offer very low-cost plug and play learning appliances on a NAS storage device
Dells Learning System (DLS)
Googles Mini Search Appliances
Even Google wants the SMB: The Google Mini Search Appliance now comes in two smaller sizes - a 200,000-document search capacity Mini for $5,995 and a 300,000-document capacity version for $8,995
Who is the Buyer? 2006 to 2011 US Installed Learning Technology Platforms & Tools Market Flat but Huge Shift in Buyer Demographics
By 2011 SMB Market Accounts for 55% of Corporate Market

Picture of Success: Moodle and other Open Source LMS Platforms Take International Education LMS Market by Storm
Follow the money: The adoption data speaks for itself
A lot of money being made around platforms that are free Vibrant cottage industry for fee-based content services and technical services for Moodle
Comcourses Learning Bridge commercial product based on Moodle Moodle.com, GlobalLiteracy, TeacherHosting.com, rSmart, and hundreds of other service providers now provide fee-based products and services
Source: TeacherHosting.com, 2006
Source: Moodle, 2005
2006-2011 US IT Training Trends: New Learning Technology Products Cannibalizing Both Classroom and eLearning
2006-2011 US IT Training Market Growing by 2.5% Five-year CAGR

Real-Time Collaboration-based Learning Technology Fastest Growing Product in IT Training Industry

Ambient Insights 2006-2011 US Market Forecast for Real-time Collaboration-based Learning Products and Services
Major Catalyst for Learning Technology Adoption is Explosive US Growth of Learning Business Process Outsourcing
The New Stack Demands NextGen Learning Technology Integrating Identity, Collaboration, and BPM Technology
SOA Changes Everything: Conventional Application Training Goes Away with Web Services
Rapid eLearning is too Slow: Process-Embedded Learning is Very Fast and Profitable
Demand for Process-embedded Learning is being fueled by Outsourcing growth
All Process-embedded Learning is Enterprise Application training Process-embedded Learning products decrease content creation and maintenance costs by as much as 60-80% Decrease help desk calls by 60-75% (the average helpdesk call costs $125 in the US) Process-embedded Learning eliminates lost opportunity costs caused by going to a class or taking a elearning course Is there Money in it? Epiance had $5 million in revenue in 2003 and expects $40 million in revenues by the end of 2006 Global Knowledge On Demand revenues growing by 40-50% a year for the last 4 years
Source: Epiance, 2005
Who Gets Trained in the Presence of Decision Support and Task Support Embedded in Personalized Rich Clients?
Personalized Workflows Workers Modify Managers Manage & Measure BPM Analysts Model ITs Model
Evolving Complexity of Web Services Standards Creates Demand for New Training
New training products required for a combined audience of SEs, Developers, Security Managers, Compliance Managers, Business Process Analysts, and Line-of-Business Managers Vertical Task and Decision-Support has to be embedded in local BPM models
Who Gets Trained? The Shift in Demographics is Profound

CIOs now expected to be proficient business managers, compliance managers, and security professionals Business Process Analysts function as Developers, System Architects, Business Managers, Training SMEs, and Instructional Designers Helpdesk personnel are now providing live online mentoring (Dell) and in person tutoring (Best Buy) Sales Engineers expected to pass non-secure product certification exams Growing counter-culture of developers prefer to call themselves the community and not interested in titles, certification, or role limitations Everybody is an Expert: Blogs now primary source of technical information for IT pros, developers, and power users
Who Gets Trained and How They Get Trained Linked with the Evolution of IT and New Learning Technology
What are They Buying? Individual versus Organizational IT Training Buying Behavior
Ambivalent Buyers
Cautious Buyers
Strong Buyers
Sources and Related Research

Ambient Insight: We put Research into Practice
Ambient Insights 2006 Snapshot of Learning Technology Trends in the US IT Training Industry ( available February 15th, 2006 ):
http://www.ambientinsight.com/Reports/ReportsMain.aspx
10 reports in Ambient Insights US Real-time Market Forecast for Real-time Collaboration-based Learning Products and Services series:
Three Product Market Forecast Reports by Product Category

Content Products and Events Content Services and Technology Services Installed Technology
Six Buyer Market Forecast Reports by Buying Segment:

US Consumer Market US K12 Academic Market US Higher Education Academic Market US State and Local Government Market US Federal Government Market US Corporate Market
Vendor Profile Report

Questions and Comments can be emailed to: sam@ambientinsight.com

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Key Findings from Ambient Insights 2006 Snapshot of Learning Technology Trends in the US IT Training Industry:

Agenda: 2006 Snapshot of Learning Technology Trends in the US IT Training Industry

Learning Product Buying Trends

Who gets Trained?

Ambient Insight 2006

Ambient Insight Learning Technology Product Taxonomy

Ambient Insight 2006

Key Findings: The Old Industry is Gone

Key Findings: The New Industry is Here

Ambient Insight 2006

across Consumer, Academic, Government, and Corporate Segments

Total US Education and Training Market 2006

Ambient Insight 2006

Total US Education and Training Market 2006-2011

Ambient Insight 2006

Ambient Insight 2006

Googles Mini Search Appliances

Ambient Insight 2006

By 2011 SMB Market Accounts for 55% of Corporate Market

Source: TeacherHosting.com, 2006

Source: Moodle, 2005

Ambient Insight 2006

Ambient Insight 2006

2006-2011 US IT Training Market Growing by 2.5% Five-year CAGR

Ambient Insight 2006

Real-Time Collaboration-based Learning Technology Fastest Growing Product in IT Training Industry

Ambient Insight 2006

Ambient Insight 2006

Ambient Insight 2006

Ambient Insight 2006

Ambient Insight 2006

Ambient Insight 2006

Ambient Insight 2006

Who Gets Trained? The Shift in Demographics is Profound

Ambient Insight 2006

Ambient Insight 2006

Ambient Insight 2006

Ambient Insight 2006

Ambient Insight 2006

Sources and Related Research

Three Product Market Forecast Reports by Product Category

Six Buyer Market Forecast Reports by Buying Segment:

Vendor Profile Report

Questions and Comments can be emailed to: sam@ambientinsight.com

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