14 December 2020

The Learning Tech Landscape: More – Just More

Dani Johnson
Co-founder & Principal Analyst

TL;DR

  • This article addresses the learning tech market and how it has changed since our last data collection in 2018
  • Overall, the market has grown, in terms of number of vendors, number of users, number of functionalities, and revenue
  • The number of functionalities and the relative ease of integration has changed the way leaders are approaching learning tech purchases
  • Coaching, enablement, mobility, analytics, and skills technologies have increased, mirroring many of the trends in employee development we’re seeing within organizations

We spent the summer and fall of 2020 collecting data on the learning tech space––first, because it’s been a couple of years since we addressed it and wanted to find out what has changed, and second, because, honestly, what else were we going to do?

In the process, we polled vendors which have been very generous with their information, and checked in with learning leaders to get their thoughts on learning technology and how they’re thinking about it differently.

So what’s changed? The short answer is: There’s just more. More market, more choices, more confusion, more vendors, more functionalities, and more options. The data and insights we share with you in this report are based on the data we collected from vendors––via a survey and by understanding their offerings through their websites.

Let’s jump in.

More growth

As learning has become more of a strategic imperative for organizations, C-suites have been more likely to allocate budget for continued employee development. In fact, according to LinkedIn’s 2020 Workplace Learning report, 83% of L&D pros say that executive buy-in is not a challenge.1 Anecdotally, we’ve seen this buy-in as L&D leaders have less of a challenge securing budget.

As purse strings loosen for L&D teams, we also see increased action on the learning tech side. Number of vendors, number of users, number of solutions, number of functionalities, and amount of revenue have all increased significantly over the last 2 years.

More vendors

There are more learning tech vendors than probably any other time in history. As leaders demand better learning experiences and as vendors provide different types of functionality, more vendors continue to pop up.

We currently have 223 in our database, and we know that isn’t even close to all of them. If we look at just the vendors in our database and plot them by the year founded, we see tremendous growth in the last decade––and that growth is accelerating (see Figure 1).

 

Figure 1: Number of Surveyed Vendors by Founding Year, 1980-2020

Source: RedThread Research, 2020.

Incidentally, the leveling off in recent years isn’t because things are slowing down; rather, it represents the lag between the time a vendor organization is incorporated or established, and the time we actually see it in the market.

Growth in the number of vendors can likely be attributed to a couple of sources. First, there are lower barriers to entry than we’ve had in years past. Two people with a great idea, an AWS account, and a decent understanding of social media marketing have a shot at making a go of it––and we’re talking to more founders in this very situation.

Secondly, we’re seeing more money being invested in the ed tech space. Venture capital investments in ed tech during 2020 are already at about $9.7 billion, more than twice the amount in 2019.2

More revenue from more customers

Even while more vendors are entering the marketplace, established vendors are reporting more revenue between 2018 and 2019––by a significant amount (see Figure 2). In fact, between 2019 and 2020, vendors collectively reported year-over-year growth of about 69%.

 

Figure 2: Total Revenue from Surveyed Vendors, 2018-2020

Source: RedThread Research, 2020.

 

Likewise, total number of customers reported by vendors has also grown significantly in the past 2 years. Collectively, vendors in our study reported strong growth––33% from 2018 to 2019, and 48% from 2019 to 2020––again indicating the adoption of more learning technology (see Figure 3).

 

Figure 3: Total Number of Customers of Surveyed Vendors, 2018-2020

Source: RedThread Research, 2020

 

The impressive growth of both vendor revenue and customers in 2019 indicates that adoption of learning tech preceded the COVID-19 crisis. Along with more enlightened C-suites and bigger or more stable budgets, learning leaders have also begun to understand the benefits, scalability, and flexibility of new types of learning technology.

That’s not to say COVID-19 hasn’t had an impact. As much as we would like to wish COVID away, its existence has a positive correlation with learning tech adoption. Anecdotally, even smaller players just getting their start are seeing some pretty good success, given that organizations are having to rethink their employee development strategies for remote workers.

More users

Finally, we’re also seeing more users of learning tech in general. A full 43% of vendors say they have more than 500,000 users and 35% report more than a million (see Figure 4). Anecdotally, in 2020, many orgs that had been planning a learning tech rollout over months or years were surprised by COVID-19, but then took advantage of it to get more users up and running than they’d originally anticipated for 2020.

Figure 4: Number of Users by Surveyed Vendors*

*Percentages may not total 100% due to rounding.

Source: RedThread Research, 2020.

 

What industries are these users coming from? According to our vendor data, the top 3 industries served are technology, banking, and life sciences (see Figure 5).

Figure 5: Top 3 Industries Served by Surveyed Vendors

Source: RedThread Research, 2020

More functionalities in more combinations

When we started talking to vendors a couple of years ago, we learned that they tend to categorize the things they do much more granularly. And, as organizations have begun to focus more on the experience employees have in their development, so do leaders.

To date, we have identified 30 functionalities that vendors are offering and which orgs are considering when it comes to employee development (see Figure 6). Two functionalities popped this year that weren’t a big deal in 2018: podcasts and knowledge bases.

Figure 6: 30 Functionalities Offered by Surveyed Vendors

Source: RedThread Research, 2020.

 

Podcasts

As learning leaders have expanded their view of learning and increased the number of ways for employees to learn, podcasting has become a thing. Why? Some of the reasons we’ve heard include that they:

  • Are portable––and can be easily consumed anytime and anywhere
  • Provide a touchpoint with leaders––allowing them to communicate key information or tell their stories in an engaging way
  • Are serial in nature––giving organizations the opportunity to create a conversation
  • Can be industry-specific or off the shelf––allowing L&D functions to provide them as part of a wider portfolio

Podcasts give organizations the opportunity to tap into a medium familiar to employees––one they likely use in their everyday lives (104 million Americans have listened to a podcast in the last month3) and reach them in a way that traditional corporate learning content may not.

Knowledge management

Expanding the definition of learning has also led organizations to include knowledge bases in the functionalities they consider when evaluating learning tech. Increasingly, orgs are utilizing repositories, such as SharePoint, Confluence, Box, Dropbox, Google Drive, Inkling, and others, to gather and organize information useful to employees while doing their jobs.

Uses of these knowledge bases run the gamut––anything from manually pointing employees to existing knowledge bases to connecting those knowledge bases to the learning tech ecosystem and surfacing content in LXPs, LMXs, and other platforms.

Interestingly, as with many of the functionalities we see pop up on our list, podcasting and knowledge bases weren’t originally created for corporate L&D, but have been adopted. In fact, most vendors playing in these spaces aren’t traditional “learning tech” vendors at all, but rather media and workplace collaboration vendors. This speaks to the increasingly closer tie between learning and the real world.

More focus on enabling behaviors

As a part of the initial research on learning tech, we spent a lot of time talking with L&D leaders about their goals. Those who are more forward-thinking tend to be enabling behaviors rather than providing training.

From those discussions, we identified 6 behaviors that L&D functions should be enabling and 2 they should pay attention to in order to keep the proverbial train on the tracks (see Figure 7). Unsurprisingly, functionalities surfaced by vendors fit nicely within that framework.

Figure 7: Learning Ecosystem Framework

Source: RedThread Research, 2020.

 

A quick review of these behaviors:

  • Plan: How do we enable our employees to understand their career options and empower their own development?
  • Explore: How do we enable our employees to find the opportunities and content they need to develop in their careers?
  • Consume: How do we enable our employees to consume content––courses, job aids, etc.––and how easy do we make it?
  • Experiment: How do we encourage employees to introduce new skills into their workflow or practice new skills on the job?
  • Connect: How do we help employees find and learn from each other?
  • Perform: How do we help employees get better at their jobs in the flow of work?
  • Manage & Create: How are we, as the employee development function, at creating necessary content and tracking learning?
  • Analyze: Which metrics and measures do we use to determine progress?

As organizations build out their learning tech ecosystems, this model in Figure 7 can help them understand their many tech options and what potential behaviors those options may encourage.

We don’t think that all orgs need all functionalities; we do think, however, that all orgs should be encouraging all behaviors (even if they encourage some of them without using tech).

We also use this model to help frame exactly what we’re seeing in the learning tech space. The good news is that we’re seeing more organizations begin to understand what they need to do, recognize functionalities, and think beyond the LXP. For example, 2020 vendor data shows these categories are beginning to fill out: More vendors are providing functionalities pertaining to each desired behavior (see Figure 8).

Figure 8: Number of Surveyed Vendors Supporting These Behaviors*

*These numbers are based on the 223 surveyed vendors participating in this research.

Source: RedThread Research, 2020.

 

Not surprisingly (and not much of a change from 2018), the behavior still being supported most by learning tech vendors is consume: The most functionalities are associated with consume as learning leaders and vendors alike try to increase engagement with employees, and interest them in skills and knowledge development.

Also, not surprisingly, the behavior being supported least is experiment. While we’ve seen some efforts in this area (i.e., more video practice and more AR / VR), we think there are other ways to help employees experiment on the job and we’re excited to see what vendors come up with.

The behavior that’s grown the most in terms of vendors supporting it is perform. This aligns with our theory that learning, performance, and career are all becoming 1 conversation instead of 3. It’s difficult to provide personalized development opportunities to employees unless you know how they’re currently performing, and can enable them to develop skills and knowledge on the job.

As this model continues to fill out, it offers opportunities for both vendors and leaders.

More point solutions

A bigger focus on behavior is also encouraged by the many point solution vendors we’ve seen in the learning tech space. The number of vendors offering 5 or fewer functionalities has more than doubled in the past 2 years (see Figure 9). We previously mentioned some of the reasons for this growth.

 

Figure 9: Number of Functionalities Offered by Surveyed Vendors, 2020 vs 2018

Source: RedThread Research, 2020.

 

There’s an ongoing debate about whether there’ll be a consolidation of smaller vendors as they merge or get acquired by larger platform vendors. We think there’ll always be consolidation. Our data, however, indicates that organizations are using point solutions more than ever. This is likely for a few reasons:

  • Integration is easier now. (We had a vendor tell us a few years ago that integration would soon be table stakes. While, at the time, that seemed slightly farfetched, we’re seeing it happen. Vendors are more aware of other parts of the learning tech ecosystem, more willing to play nicely with them, and more thoughtful with their backends to make it easier.)
  • No longer a need to choose. Learning leaders no longer have to choose between point solutions or platforms.
  • Change in Philosophy. Organizations used to have a philosophy: String a bunch of best-in-class point solutions together or choose a platform that claimed to do everything. That’s no longer the case. Organizations now often use point solutions to round out a platform offering.
  • Point solutions can be more tailorable. L&D leaders looking for a very specific experience can find one that aligns the best with their culture, rather than simply accepting what a platform may offer.

The availability of more point solutions has also likely increased the number of vendors offering the same functionality, which we talk about next.

More choices for the same functionality

Our 2020 data also shows that more vendors are offering the same functionality than in the past. In fact, more vendors are offering all but 2 of the functionalities we asked about. Figure 10 offers some insight into the popularity and adoption of the different functionalities.

Figure 10: Number of Solutions Offering Each of the 30 Functionalities, 2020 vs 2018

Source: RedThread Research, 2020.

 

What are the biggest changes? A few caught our eye.

Microlearning

Microlearning was the buzzword a few years ago. As the learning tech market has grown up around it, this is receiving less emphasis––partly because so many functionalities (besides just consuming content) make use of it and partly because it has become table stakes.

As organizations move away from courses and as vendors offer more ways to learn, microlearning has become a way of describing many things rather than just chunking up courses.

LXP

Not surprisingly, a number of vendors have either entered the market or changed directions to become LXPs. Two years ago, when we asked what exactly an LXP is, no one had a really good answer––and we had vendors with all kinds of functionalities claiming to be an LXP.

While the definition has stabilized a bit (largely due to Josh Bersin, who coined the phrase, finally defining it), LXP functionality varies widely, and is incorporated and / or combined with many others. We advise anyone looking for an LXP to ask lots and lots of questions to make sure it does what you want it to do.

Adaptive learning

As AI, machine learning, and data have gotten better, we’re seeing more vendors offer some type of adaptive learning. This can be anything from branching, to microlearning bits pieced together in different ways, to AI algorithms determining an employee’s knowledge and guiding future learning.

Assessments

Finally, assessments. Frankly, we aren’t sure what happened here. The number of vendors telling us they offered some sort of assessment plummeted between 2018 and 2020.

We think this may be due to 2 things.

  • First, manual assessment is not as important as it once was; it’s being rolled into skills assessment and verification rather than knowledge assessment.
  • Second, assessments may still exist in these solutions, but marketing doesn’t necessarily want to emphasize it to the extent they have in the past.

It also may be due to the assessment that’s starting to take place in the background––utilizing latent data or data from other systems to assess knowledge and skills, rather than doing it overtly.

More options for learning leaders

Changes in the learning tech landscape obviously offer learning leaders more options. While more options are generally good, some of them require changes to other parts of the L&D function in order to be useful.

More analytics & measurement

The most frequently offered functionality by vendors was analytics and measurement. In the past 2 years, the importance of data and analytics has increased significantly as leaders across the org have begun to realize their power (see Figure 11).

Figure 11: Number of Surveyed Learning Tech Vendors Offering Analytics, 2020 vs 2018

Source: RedThread Research, 2020.

 

Whereas reports and dashboards (and interactive dashboards, if you want to get fancy) used to be enough, we’re seeing much more complete offerings. Vendors are going beyond solutions that simply provide a report card on how things are going (like dashboards) to refunneling and using the data created and absorbed by learning systems to create additional functionality.

AI and machine learning have become learning tech marketing buzzwords, for sure. But when implemented well, these technologies can offer much more personalized and better experiences––allowing employees to plot out specific learning journeys, understand their performance and what they can do to improve it, and build needed skills for their desired careers.

Not only that, analytics and measurement are key to solving some of organization’s biggest challenges today, particularly around skills and mobility. Vendors are beginning to craft solutions that help orgs answer questions like:

  • What skills does my organization need?
  • What skills does my organization have?
  • How do we enable and optimize career mobility?

All that said, further research is needed to understand how individual vendors stand up to some of these new functionalities. (This is one of those times we wish we would have asked much more detailed questions.)

More flexibility & speed

One of the other exciting things we’ve seen in the market is the ability of vendors to implement much more quickly. Our 2020 data tells us that 38% of all vendors can have a technology implemented in less than a month. A full 88% say that they can have one implemented in 3 months or less. (See Figure 12.)

Figure 12: Time to Implement Learning Tech Solutions

Source: RedThread Research, 2020.

 

Why do we care about this? Because speed in this day and age is good. Skills change rapidly, industries shift, and, yes, pandemics happen. Organizations that can quickly implement new tech have a leg up in developing their workforces, and keeping their skills fresh and relevant.

Quick implementation times also minimize the investment that orgs must make in using learning tech. By minimizing the investment, it’s easier to “cry uncle” when things aren’t working, and easier and more cost-effective to try out new technologies

Also, quick implementation allows learning leaders to build a continuously evolving, effective learning tech ecosystem. If technologies can easily be plugged in or taken out, learning leaders can tailor tech and functionalities to their culture, function, or business unit quickly.

In many cases, we’re also seeing learning become such a priority that many purchases aren’t made through the L&D function, but rather through the business function. In such cases, quick implementation times and point solutions allow business functions to meet the development needs of their employees quickly and easily.

More help for bigger problems

Learning leaders are also finally getting help with some of the larger challenges they face. Whereas employee development used to consist of creating and distributing courses, modern employee development broadens the responsibilities of learning leaders and, therefore, the support they need.

Specifically, there are 3 or 4 challenges that learning leaders are voicing in the current environment: mobility, coaching, learning in the flow of work, and upskilling and reskilling. Luckily, the learning tech market has begun to think through these challenges as well as where it can help. We briefly review these areas below, but will be providing separate studies on each, complete with associated vendors in the first part of 2021.

Upskilling & Reskilling

We’ve been following the skills verification and tracking conversation for a few years now, and it just barely started to get interesting. Organizations are hot to understand the skills their employees have and the skills they’ll need to compete.

This is one tech area in which we think vendors beat learning leaders to the line: Vendors have been thinking about this challenge and trying to solve it for a while now. In fact, when looking at the number of vendors that say they track skills in 2020 vs the number in 2018, there’s little movement (see Figure 13). (We think there are more than are showing in our data and that the COVID-19 crisis has prompted many vendors to act on this since they initially shared their data with us.)

Figure 13: Number of Solutions Offering Skills Tracking, 2020 vs 2018

Source: RedThread Research, 2020.

 

While skills verification and explicit data are still a large part of what skills tracking vendors offer, we’re also seeing some interesting things happen with AI and existing data. Vendors are getting better at inferring skills based on other skills they know employees may have, or by tapping into other organizational data to determine the frequency of employees completing a task to determine proficiency.

Mobility

We haven’t been able to have a discussion about skills this year without also discussing mobility; they seem to go hand in hand. This discussion has also been prompted by the COVID-19 crisis as many organizations try to secure positions for employees who may have been temporarily or permanently displaced.

Turns out, mobility is a complicated beast. It’s generally not handled by just 1 function and takes more than 1 technology to enable it. When we combine talent marketplaces and career planning tech solutions, the growth in the number of vendors over the last 2 years has more than doubled (see Figure 14).

Figure 14: Number of Vendors Talent Marketplaces & Career Planning, 2020 vs 2018

Source: RedThread Research, 2020.

Since we collected this data, we’ve also been briefed by several vendors which focus specifically on mobility solutions––some that incorporate these 2 functionalities, and some that are much more complete and complex.

As this challenge is two-fold––moving employees where their skills can best be taken advantage of by the organization, and ensuring that employees have opportunities to learn and grow to keep them engaged––we imagine we’ll see more growth in this area in the near future.

Enablement

In 2018, we were just beginning to see the emergence of a new functionality––one that helped employees get better at their work while on the job, such as onscreen help, step-by-step directions when performing a new task, QR codes built into learning, and the like. There weren’t many vendors focusing on it at the time.

In 2020, however, our data tells a different story: Thirty-seven vendors are offering some sort of enablement (see Figure 15). This follows the trends associated with AI and machine learning––necessary technologies to provide some of the enablement functionality. We expect this segment to continue to grow.

Figure 15: Enablement Solution Providers, 2020 vs 2018

Source: RedThread Research, 2020.

Coaching

Finally, we’ve seen a large influx of coaching vendors or vendors that’ve also developed coaching functionality (see Figure 16). More and more, coaching is seen as an employee development tool that should be offered to all levels in the org, rather than retained for leadership only.

Figure 16: Number of Solutions Offering Coaching, 2020 vs 2018

Source: RedThread Research, 2020.

 

Not only are we seeing new vendors in this space, we’re also seeing some interesting solutions. For example:

  • Internally focused coaching––reverse coaching, group coaching, and peer-to-peer manager coaching. Software generally focuses on pairing people internally, and providing platforms and tools to enable good sessions.
  • Coach on the shoulder, which utilizes AI and latent data to provide feedback to individuals about their behavior and what they can do better. This type of software generally eliminates human coaches and instead relies solely on the technology.
  • Coaches for different topics. Whereas most traditional coaching and coaching tech has addressed leadership and business topics, new coaching offerings include financial, health, wellbeing, and early career help as well.

As AI, data, and tech get better, we’re very interested to see what’s next for coaching software. We’ll be doing a separate study on this topic in early 2021.

What’s Next?

This article is an introductory piece on learning tech and provides information about the market, what it has done the past couple of years, and how we see it continue to evolve.

This is just the beginning of the research we'll be doing on learning tech in the next 3 months. You can also expect:

  • An updated learning tech landscape tool
  • An infographic summary of learning tech details
  • A guide for helping leaders choose learning technology
  • An overview of the coaching market, vendors, and differentiators
  • An overview of the mobility and skills market, vendors, and differentiators
  • An overview of enablement vendor market, vendors, and differentiators

Footnotes

  1. The Steady Rise of Podcasts – Statista
  2. VCs Are Pouring Money Into the Wrong Education Startups,” Thomas S. Dee, Wired, November 29, 2020.
  3. 2020 Workplace Learning Report, LinkedIn Learning, 2020.

ABOUT THE AUTHOR

Dani Johnson

Dani is Co-founder and Principal Analyst for RedThread Research. She has spent the majority of her career writing about, conducting research in, and consulting on human capital practices and technology. Her ideas can be found in publications such as Wall Street Journal, CLO Magazine, HR Magazine, and Employment Relations. Dani holds an MBA and an MS and BS in Mechanical Engineering from BYU.

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