The Growth of SaaS and Best-of-Breed LMS
Software as a service (SaaS) now accounts for up to 70 percent
of all e-learning and Web conferencing, making it easier for learning Best-of-Breed/
leaders to assemble best-of-breed solutions that deliver world-class Partnership Models:
functionality quickly and cost-effectively. • Feature one key focus area with strategic
integration partnerships in other areas.
Although technology- • Offer greater depth and expertise
enabled learning has been
around for a while, enter-
SaaS is quickly in the core area.
prisewide learning tech- • Feature highly proficient partner
nology has become catching on as the vendors with deep levels of
increasingly complex and knowledge in respective areas.
more strategic over the preferred way for • Are consultative and
last few years. New trends full-service oriented.
in online learning and an
increasing emphasis on
learning’s impact on busi-
ness results have spurred acquire access to On-demand SaaS
the development of new
learning management business applications solution providers:
• Sell a software product and a set
systems (LMS) and an of services to help you select and
increasingly dizzying array because it eliminates integrate with other third-party
of choices. products as needed.
Costs continue to rise the headaches, • Partner with other best-of-breed vendors
as organizations seek and provide a single point of contact.
LMS functionality, pow-
hassles and risks • Provide strategy, content development,
content planning, customization,
erful learning tools and
advanced analytics capa- associated with implementation and training services.
bilities. In some cases, the • Can offer a single point of contact
high cost of implement- on-premises software. and training administration in addition
ing and hiring the IT staff to technology support.
needed to maintain an • Sell software and services, with
enterprise LMS has a focus on making sure you are
become prohibitive. Compounding this that meets their unique business satisfied with the overall solution,
problem are increasingly dispersed work- demands and solves their unique orga- including third-party products.
forces, partner networks and customer bases nizational challenges.
that require access to learning from across SaaS (also called “on-demand”) is a
the country and around the world. software solution that is hosted and sup-
As the enterprise LMS moves beyond ported by a vendor as a service, which ment, WebEx for Web conferencing and
simply operating as a training tool and users access via the Internet without the KnowledgeAdvisors for training analytics
evolves into a critical component of a need to deploy and maintain an on-prem- as part of its overall best-of-breed solution
company’s suite of software, the LMS also ise IT infrastructure. — and therefore offers an integrated suite
must be able to integrate with other appli- A well-established SaaS vendor focuses on of products and services with deep and rich
cations and ensure a seamless user inter- key strength areas and has developed strong functionality. This is in contrast to tradi-
face and functionality across the spec- partnerships to provide “best-of-breed” tional on-premises software vendors that
trum. The problem for consumers is how solutions that meet the organization’s iden- offer a suite of products with broad, but
to select an LMS solution that meets their tified needs on a broader scale. For exam- sometimes shallow, expertise.
business needs and integrates with the ple, GeoLearning is an on-demand LMS
organization’s overall IT infrastructure. SaaS is quickly catching on as the preferred
platform provider that has developed part- way for organizations to acquire access to
nerships with industry leaders that offer business applications because it eliminates
SaaS & Best-of-Breed
Go Hand-in-Hand complementary tools. In addition to its all the headaches, hassles and risks associat-
LMS, GeoLearning provides clients with ed with traditional on-premises software.
Increasingly, organizations are turning to SuccessFactors for performance manage-
SaaS technology to implement an LMS
Sponsored by GeoLearning
The adoption rate for on-demand learning appealing to HR and training professionals force you to trade perceived benefits for a
management systems is skyrocketing. for several reasons, including its lower start- system that might not actually meet your
According to a recent Gartner research up costs, reduced total cost of ownership company’s needs.
report, SaaS technology has grown signifi- and rapid deployment. Although a single-vendor solution might
cantly and will continue to do so. Bersin & Associates research indicates on- seem to provide higher levels of accountabil-
“Ease of use, rapid deployment, limited demand solutions are highly effective and ity and control, it can create the opposite
upfront investment in capital and staffing, scalable. Web services technology makes problem: If a suite provider cannot meet an
plus a reduction in software management integration with a company’s system easier organization’s needs, the buyer essentially
responsibility all make SaaS a desirable than ever and speeds up the implementa- has put all its eggs into one basket and might
alternative to many on-premises solutions, tion time frame. not have recourse when part of the system
and they will continue to act as drivers of SaaS offers several advantages over tradi- does not meet the company’s needs. In addi-
growth,” stated Sharon Mertz, Gartner tional integrated on-premises solutions. tion, the human capital and IT infrastruc-
research director. According to Bersin’s findings, the actual ture required to implement and maintain
According to Gartner, SaaS revenue will functionality available in a traditional, this type of solution is high, and it might
surpass $5.1 billion — a 21 percent growth on-premises suite is much more limited slow deployment, thereby eliminating or sig-
over 2006 revenues. In terms of total mar- than that available from focused, best-of- nificantly reducing return on investment.
ket share, Gartner reports SaaS adoption is breed vendors. With an on-demand SaaS solution, the
close to 70 percent in e-learning and Web For example, development tools are widely vendor takes responsibility for delivering
conferencing. available from many specialized compa- the system and implementing upgrades.
nies. And although adequate, the LMS- Vendors own, deliver and manage SaaS
Benefits of SaaS/ technology remotely, leaving mainte-
Best-of-Breed Providers provided tool set is missing some features
you find in a focused, best-of-breed, third- nance and upkeep with the vendor — not
Compared with traditional on-premises the client.
party tool. Purchasing a suite, then, might
LMS software, the SaaS delivery model is
Sources: Research Bulletin/2007. “Enterprise Learning Technology: A New Breed of Solutions.” Published May 19, 2007. Bersin & Associates, Oakland, CA.
Dataquest Insight. “SaaS Demand Set to Outpace Enterprise Application Software Market Growth.” Published August 2, 2007. Gartner Inc. Stamford, CT.
Sponsored by GeoLearning
Selecting an On-Demand LMS Solution
As the SaaS market grows and organizations Focus and Core Capabilities software vendors that offer a hosted solution
realize the value of selecting an on-demand, Does the provider offer its product only as with streamlined/reduced functionality.
hosted software solution, it becomes increas- SaaS, or as either SaaS or behind the firewall
ingly difficult to sift through the many (BTF)? True SaaS providers are focused on Does the Provider Offer a Rapid
choices and select an LMS that meets the and have a core capability in SaaS. Providers Deployment and Implementation
organization’s unique business needs. that claim to offer either/or solutions and Methodology Specifically for its
aren’t committed to one methodology over SaaS Model?
Many learning software providers are trying
to jump on the SaaS bandwagon by either another typically cannot provide world-class Deploying and implementing SaaS solutions
retrofitting their traditional LMS software for solutions for both delivery methodologies, is vastly different from BTF solutions. It is
delivery over the Internet or attaching and they can’t compete with providers that again worth noting that vendors that spe-
monikers such as “on-demand,” “hosted” or have specialized SaaS business models. cialize in one delivery model over another
“ASP” (application service provider) to their undoubtedly will be set up for that particular
product names. But what exactly is SaaS? What Percentage of the Provider’s type of deployment.
And more important, is all SaaS the same? Business is SaaS vs. BTF?
Percentage of business is an excellent indica- Hosting Location
SaaS is a software solution that a vendor hosts tor of where a provider’s loyalty lies. Be wary Is the software hosted at the provider’s site,
and supports as a service, which users access of selecting a SaaS solution from a vendor or does it outsource it under contract with a
via the Internet, without the need to deploy whose primary business is BTF (or vice versa). third party? If a third party, is there a good
and maintain an on-premise IT infrastruc- history of the software provider and the third
ture. Whereas some people associate SaaS If the Provider Offers Both, party cooperating to address customer prob-
with pay-as-you-go subscription pricing, SaaS Does SaaS Offer Equivalent lems when they arise? Be wary of providers
is more indicative of the hosted deployment Functionality? that outsource hosting, service and mainte-
model. In fact, SaaS can be priced via sub- Is it on the same product development path? nance to a third party. This is merely a host-
scription, annually or perpetually. Do upgrades to the SaaS product coincide ed solution or ASP model, not true SaaS.
To help an organization discern between a with the BTF product, or do they lag behind?
true SaaS provider and a traditional software Identify any product differences between SaaS Hosting Resources
provider jumping on the latest technology and BTF. Many on-premises LMS software Is the solution hosted at a Tier 1, co-location
bandwagon, consider these questions as you providers have different development paths facility with redundant power, secured access,
search for, compare and evaluate the on- and functionality sets for their hosted versus unlimited bandwidth and direct access to at
demand LMS: BTF products. Also beware of on-premises least two of the major Web backbones, or is
CASE STUDY: Utica’s Employee Performance Management Solution
Company Overview ment, performance management and Again, although Utica might have been
Utica National Insurance Group, a mid- learning management, as well as services able to identify, select and implement
sized insurance company that focuses on to assist in the development of compe- each of these components separately, the
the small-business market, was seeking a tency models and the performance man- company realized it needed an integrator
solution for pre-hire assessments and per- agement process. to select, implement and support each of
formance management. Initially, the HR these integrated elements.
organization wanted to build an in-house Determining the Best Solution
Ultimately, Utica implemented a highly
assessment tool. As it explored the com- Utica selected a solution delivered by successful solution, and GeoLearning was
plexities of the application and looked at GeoLearning that included a wide able to provide each of the components.
vendors’ products, the company decided variety of components, including: The vendor also offered a single point of
it needed an LMS. • GeoLearning’s LMS. contact for service and support for the
• SuccessFactors’ performance implementation, training and assistance in
Business Challenge establishing Utica’s assessment, perform-
Once the company explored the LMS management system.
ance management, and training and devel-
market, it found very few providers that • An insurance competency model opment processes.
could offer a complete solution for provided by ITG.
employee assessment, performance man- • Virtual classroom capabilities Lessons Learned
agement and employee development. At provided by WebEx. Once again, when an organization is
the time, many of the LMS companies trying to implement a complete solu-
were selling only learning solutions, and • Training content from:
tion, and resources are scarce, a full-
only a few of these vendors had the – NETg / SkillSoft
solution provider (which is unbiased
expertise or software to support the entire – MindLeaders about technology) often can pull
employee life cycle. After reviewing 14 – Kaplan Financial together all the pieces from best-of-
LMS solutions, Utica realized it needed a breed providers and add significant
– A set of tools to enable the
solution provider that could offer a solu- value in integration and support.
company to develop its own
tion that would include employee assess-
Sponsored by GeoLearning
Continued from previous page…
it hosted by a Tier 2 provider that must Network Administration faces and any custom reports that might
connect to major Web backbones via a Tier What kinds of performance monitoring, be necessary?
1 or other third-party provider? utilization metrics, network tuning and
capacity planning services will be provided? Technical Support Options
Physical, Network Does the provider also offer both Tier 2
and Data Security System Administration support (for administrators) and front-line
How does it compare with your organiza- What types of performance monitoring, Tier 1 support (for end-users/learners)?
tion’s requirements? Who owns, works on system metrics, system-tuning and capaci-
and has access to the hardware/equipment? Content Support Services
ty planning services will be provided?
and Vendor Management
Service-Level Agreements (SLA) Does the provider resell, pre-integrate,
Data Integration with
How does the provider’s SLA, history and Other Software Applications host and provide maintenance services for
references compare with your organiza- courseware content on its own servers or
tion’s requirements? How will data be shared/integrated with merely link out to the content provider?
human resource information system/enter-
System Performance prise resource planning (HRIS/ERP) sys- Learning Services
What type of performance (especially user- tems and other learning databases? How What supporting and complementary
response time) can be expected for simulta- are these integrations handled? services does the vendor provide (such as
neous users at different Internet connection program support, integrations and instruc-
speeds? What other customers are your cur- Software Updates tional design)?
rent size, and are they satisfied with per- Are they required or optional? Are they
subject to customer scheduling and Together, these questions provide a litmus
formance? What other customers are of the
test that will help you when comparing ven-
size you project to be in three years, and are approval? What procedures and costs
dors and selecting an on-demand LMS.
they satisfied with performance? will be involved for updating any inter-
Cabela’s Integrated E-Learning Platform and Retail Training Solution
Company Overview Selecting an Integrated • A reporting and analytics
Cabela’s is a $2 billion retailer that pro- Solution Provider system (KnowledgeAdvisors)
vides a wide variety of sporting goods After looking at many systems, the • A collaboration system to facilitate
designed to meet all the needs of out- company realized it needed an inte- the completion of certificate degrees
door recreation, fishing, hunting and grated solution provider that could (Q2 Learning’s eCampus).
camping. The company’s business has offer a well-designed LMS and provide
been built on its direct mail and These products and services were all
content development assistance, tools
Internet distribution channels. Over important in Cabela’s total training solu-
for internal content development and
the last two years, it has focused heavi- tion, but they were not available from
a platform that enabled employees to
ly on opening retail locations. any one vendor. Although the company
enroll and participate in degree pro- might have tried to select each individ-
Business Challenge grams from Western Nebraska ual component, it saved valuable time
Community College. The company by working with a best-of-breed solu-
During the last two years, Cabela’s has
also wanted a solution for measure- tions integrator such as GeoLearning,
opened 18 store locations in the
United States and is opening nearly ment and reporting so that each store which took responsibility for the selec-
eight new stores each year. Each store could track employee training and cer- tion, implementation and support of
has about 400 to 500 employees who tification among each of the product each component of this solution.
must understand a wide variety of categories. Cabela’s chose to work with
products. The optics section alone GeoLearning, one of the best-of-breed Lessons Learned
(binoculars and other related products) integrated solution providers. When you are constrained by resources
has dozens of highly complex items. and need to build a complete end-to-end
GeoLearning provided: training solution, it is often more cost-
Cabela’s is an employee-centric com-
• The learning management effective and efficient to seek a solution
pany that offers certified degree-granti-
ng programs for all employees. The platform. provider that:
company’s director of HR was responsi- • Content development assistance to • Has experience working with many
ble for developing a training and certi- help build the initial library. technology providers.
fication solution to support this rapid • An integrated content management • Can offer content
growth. The company needed an LMS, system and tools (a third-party development services.
a set of custom content, a way to devel- product supported and integrated
op and edit such content and a system • Is willing to take responsibility to be
by GeoLearning). the single point of contact for the
that would enable employees to enroll
in and complete degree programs. entire solution.
Sponsored by GeoLearning