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By Ed Frauenheim
Jan. 16, 2012
The training world was full of tie-ups in 2011. And 2012 could bring still more consolidation among vendors of training software and services.
Last year, talent management software-maker SumTotal Systems Inc. said it acquired training software and services provider GeoLearning Inc., e-learning content firms SkillSoft and Element K joined forces, and talent management software vendor SuccessFactors Inc. acquired learning software makers Jambok and Plateau Systems. To top it off, at the end of the year SuccessFactors itself agreed to be acquired by human resources software giant SAP.
That last deal, with its whopping $3.4 billion price tag, could prove to be the most important one for the training landscape and the broader universe of HR service and software providers.
Jim Holincheck, an analyst at research firm Gartner Inc., says he can imagine the SAP-SuccessFactors transaction triggering additional acquisitions—akin to the way SAP, Oracle and IBM Corp. all bought business intelligence software players within a matter of months a few years back.
“We’re definitely entering a new and different phase of consolidation within the talent management part of the market,” he says. “This is the first time one of the mega-vendors has gotten into the mix.”
All the merging and acquiring comes as companies have been opening up their wallets to spend on employee development. U.S. corporations beefed up their training budgets by 9 percent in 2011, according to research firm Bersin & Associates. Although it comes at a cost, training is a key way to boost productivity, employee engagement and company reputation.
Consolidation involving training vendors also reflects a trend to marry learning management systems—which allow companies to track employee coursework and certifications—with broader software systems that manage people. Doing so enables customers to better tie learning activities to each individual’s career plans and to better connect individual development to larger organizational objectives.
Ed Frauenheim is Workforce Management’s senior editor. Contributing editor Michelle V. Rafter contributed to this report. To comment, email editors@workforce.com.
Workforce Management, January 2012, p. 14 — Subscribe Now!
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