Is the LMS Dead?
How to Analyze the LMS Market
An LMS, or Learning Management System, is a software platform used to access, deploy, and track online learning experiences (Pappas, 2017). Depending on which analyst you ask, how broadly or narrowly you define the industry, and which education technology trends you believe will ultimately drive investing and purchasing decisions, the LMS market is either growing rapidly, stagnating, or outright dying.
The Product Life Cycle is a useful model for market analysis. It argues that all product categories move through 4 stages of life: market development, growth, maturity, and decline (Levitt, 1965).
Option 1: The LMS is in the "Decline" phase.
Ambient Insight is fairly confident about this, arguing that “in the current eLearning market, the single most unfavorable place to be is the LMS market, which is essentially imploding, particularly in the US corporate segment that has a very negative -33.9% growth rate (across the four company types analyzed in this report). The US corporate LMS market is beset by consolidation, commoditization, the migration to vastly cheaper cloud-based solutions, and a wave of product substitution. LMS revenues will drop by $617.1 million in the US corporate segment over the forecast period [of 2016-2021].”
Although less pessimistic, E-Literate, a blog that, among other things, produces a semi-annual analysis of the LMS higher education market segment in Canada and the US, demonstrates the consolidation of the market in the graph to the left (Hill, 2018).
Tony Bates, a leading professor, author and keynote speaker on the topic of online learning and educational technology in higher education, argues that education pedagogy is moving beyond the confines of what a traditional LMS can do. (Actually, after reading this blog post I strongly suspect Dr. Bates’ courses run a lot like ETEC522.) His basic argument is that the LMS confines students and teachers to a teacher centered, content driven approach that is no longer appropriate for an age in which students need to learn how to search, retrieve and evaluate digital content on their own.
Other criticisms of LMS argue that they haven’t adapted to accommodate the trend towards microlearning, they generally don’t facilitate user-authored content, and they don’t offer sufficient personalization via a content recommendation engine / algorithm (Bersin, 2017.)
Option 2: The LMS is in the "Growth" phase.
At the completely opposite end of the spectrum, Orbis Research, Research & Markets, and Mordor Intelligence all forecast astronomical growth in the global LMS industry, as follows:
These reports generally agreed that the North American region currently leads the global demand, with the highest expected growth coming from the Asia-Pacific region. There is near consensus that the corporate segment is the largest, followed by higher education and then by K-12. Trends plausibly cited in support of this projected growth include organizations upgrading or replacing their existing LMS, an increase in demand e-learning for corporate training, and the increasing prevalence of BYOD (Bring Your Own Device) policies in both the academic and corporate sectors.
Option 3: The LMS is in the "Maturity" phase.
E-Literate is actually more optimistic than the previously presented graph of industry consolidation would suggest. Its basic argument is that while the so-called mainline LMS has been slow to respond to changing instructional, institutional, and learning needs, those that have done so are gaining market share (Lederman, 2017). As evidence, it points out that in years past, higher education institutions usually switched LMS only if their existing one was being phased out by the developer. Conversely, clients in the higher education segment are now actively seeking out LMS with more desirable features, such as the abilities to work seamlessly with other technologies and to integrate data from multiple sources (Lederman, 2017).
In order, then, for the LMS industry (or any company in it) to continue growing, it will need to adapt to changing market demands as a way of extending its product life cycle. According to Ambient, the primary reason for the apparent implosion of the LMS industry has been the failure of the LMS to adapt to or incorporate innovations such as simulation based learning, game-based learning, cognitive learning, and mobile learning.
Ambient predicts a compound annual growth rate for mobile learning in the United States of 7.5% through to 2021. It also points out that that many countries, particularly in Africa and Asia, are mobile-first or mobile-only, and that users in these countries will have never used a traditional LMS. It is debatable whether that presents an opportunity or a threat to LMS providers. Other analysts argue that “as learning tends to gravitate towards video-snippets and bite-sized learning, the focus is now on replicating the LMS on to the smartphone” (eLearning Learning).
QUESTION #1
Is the LMS doomed to extinction, or, does mobile learning offer the opportunity for it to reinvent itself? Head to our Google Classroom to discuss.
Where Does the LMS Fit in the Product Life Cycle?
Given that the first digital LMS was available as early as 1990, and one of the current market leaders, Moodle, has been in use since 2002 (EasyLMS), the ‘Introduction’ phase is a distant memory in the LMS industry. However, you could make legitimate arguments for each of the other 3 phases. As you review our research below, form your own opinion as to whether the LMS market is in the growth, maturity, or decline phase of its life cycle, and be prepared to discuss it.
