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Learning on Demand
Enterprise-Application Vendors in the eLearning Marketplace
October 2003

Author:  Rob Edmonds
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About This Report
Table of Contents
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About This Report

Since the beginning of the Learning-on-Demand (LoD) Program in 1996, the technology-based learning and eLearning industry has been discussing the role that enterprise vendors would eventually play in the market—particularly in learning-management systems. Many industry experts recognized from the beginning that large, sophisticated users would eventually want to integrate eLearning systems with enterprise software such as human-resources systems and financial software. At the same time, enterprise vendors were clearly capable of subsuming new enterprise-software categories into their product suites and squeezing niche vendors out of the market. Customer-relationship–management (CRM) software, which began as a new industry with many small vendors, quickly consolidated under the umbrellas of enterprise-application vendors. Surely learning-management systems would go the same way?

Five years later, the industry was still asking the same questions, but little had changed. However, in the past two years, particularly in the past year, the pace of change has accelerated significantly as EA vendors have started to bring eLearning products to market and win major customers.

This report examines the current and emerging role of enterprise-application vendors in the eLearning marketplace and draws implications for enterprise users, content vendors, service providers, and infrastructure vendors as well as for enterprise-application vendors themselves. Although enterprise-application vendors generally refers to providers of software suites that include enterprise-resource–planning, customer-relationship–management, and supply-chain–management (SCM) software, the term can describe a wide range of companies, from system integrators such as IBM Global Services, EDS, and Accenture to software companies such as Microsoft and Sun Microsystems. In this report, enterprise-application vendors are companies that supply software suites that center on ERP systems and typically include financial, HR, CRM, and SCM software. SAP is by far the market leader in this space, with Oracle and PeopleSoft next in line. Among the second-tier players are Siebel and JD Edwards (before its acquisition by PeopleSoft).

A recent LoD consulting assignment for a major financial-services company (as well as ongoing discussions with users and vendors in the eLearning industry) presents growing evidence that some large companies are adopting or planning to adopt learning-management systems from their preferred enterprise-application–suite provider (typically SAP, Oracle, or PeopleSoft). Key drivers of this decision are the ability to integrate with other enterprise applications, the ability to support the application using existing IT staff, and the ability to leverage existing supplier relationships with EA vendors to negotiate cost and service terms. At the same time, we see some confusion in the marketplace about current and upcoming LMS products from enterprise vendors as companies try to sift hype from reality and determine the true availability, maturity, and functionality of these new products. Vendors across the eLearning industry face the same challenge as they try to understand the new products and assess the likely impact of EA vendors' activities on their businesses. In light of these concerns, this report aims to provide detailed information about the products, status, and strategies of enterprise-application leaders SAP, Oracle, and PeopleSoft and assess the likely implications for eLearning users and vendors.

We welcome feedback about this report and the program, and we encourage you to contact us with any questions or suggestions. For more information, contact Eilif Trondsen, director, Learning-on-Demand (LoD) Program; telephone: +1 650 859 2665; fax: +1 650 859 4544; e-mail: etrondsen@sric-bi.com. We appreciate your support of our program and look forward to working closely with you as a Learning-on-Demand sponsor.



Table of Contents

Executive Summary 1
About this Report 4
Supply- and Demand-Side Drivers for EA Vendors in eLearning 5
Enterprise-Application Vendors: Current Products, Markets, and Strategies 9
  eLearning Solutions from EA Vendors 10
  SAP 14
  Oracle 17
  PeopleSoft 20
Near-Term Market Development 24
Implications of EA Vendors' Increased Role 26
  Enterprise Users 26
  Content Vendors 26
  Service Providers 26
  Vendors of Specialist eLearning Tools 28
  Enterprise-Application Vendors 28
 
Tables
Enterprise-Application Vendors' eLearning Activities 10
PeopleSoft ELM Version 2: Release Summary 22
 
Figures
LMS Products from EA Vendors 12
EA Vendors' Positions in the EA Market 13
SAP Learning Solution 16
 
Box
Key Findings of SRIC-BI's Benchmarking Study 8



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