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Learning on Demand
Evolving Business Models in eLearning
  Volume 1
• Report Overview
• Section 1: Rise of the Hosted-Services Model

December 2001
Author: Tom Barron
Learning on Demand program logo

About This Report
Table of Contents
  Download Volume 1 (pdf)
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About This Report

Corporate eLearning is in the midst of rapid change. Once an emerging market with bright potential, the corporate-eLearning market is growing up to become an established industry with a positive early track record. In the past year, an array of eLearning technologies have coalesced into defined categories, which have enjoyed various degrees of market success. Moreover, the corporate-eLearning industry, once a cottage industry of mostly small technology start-ups, is increasingly attractive to larger technology players and professional-service firms. In turn, an assortment of compelling case studies in recent months have begun to provide evidence of eLearning’s benefits to business, not only in offering lower-cost employee training than is possible using traditional means but also in enhancing companies’ intellectual capital and competitive edge.

The Learning-on-Demand (LoD) Program of SRI Consulting Business Intelligence has been tracking these developments with an eye to helping eLearning providers and adopters adjust to the new realities of the maturing corporate eLearning market. LoD analysts have zeroed in on six areas that are relevant to companies seeking successful business models in eLearning. These areas explore the broad developments that will affect the strategies of existing eLearning providers and new market entrants, including technology-based developments, such as the advancing capabilities of Web hosting and the move toward object-based eLearning content; business developments, including the growth of vendor alliances and partnerships with established technology and consulting firms; demand-side factors that are influencing the evolution of eLearning; and market strategies that are finding firm footing in today’s soft market.


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

Report Overview: Developments Shaping New Business Models 1
  Section 1: Rise of the Hosted-Services Model 1
  Section 2: The Growing Role of Vendor Alliances 2
  Section 3: Technology Advances Shaping New Business Models 3
  Section 4: New Competitors 4
  Section 5: Demand-Side Drivers 5
  Section 6: Market Strategies 6
Section 1: Rise of the Hosted-Services Model 7
  Benefits to Buyers 8
  Barriers to Hosting 11
    Security Concerns 12
    Privacy Issues 12
    Limitations on Customization and Integration 12
    IT Departments' Resistance to Hosting 13
  Recent Developments 14
  Technology Issues 15
  Examples of Hosted Offerings 16
    Pure-Play Providers 17
    Combination Providers 17
    Third-Party Providers 18
  Prospects for the Hosting Model 19
 
Figures
Debut of Hosted-eLearning Offerings 7
Landscape of eLearning-Technology Developers 10
 
Boxes
Benefits of Hosting for Buyers 9
The eLearning ToolBox 11



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