18 Nov 09 Productization and SaaS as a Strategy for e-learning

e-learning has been a service oriented industry since its inception. Indian e-learning service providers have also traditionally taken on offshored custom services from clients, on an ongoing basis or through annual contracts. According to a ValueNotes report, the revenues for the e-learning outsourcing industry is estimated to be $341 million for the calendar year 2008. Trends in the industry now suggest that while the offshore services framework may serve as a good strategy for companies in the short term, future growth for Indian e-learning companies will be sustained by a diversification/upgrading of service offerings.

Productizing for alternate revenue streams
ValueNotes research suggests that e-learning providers will most likely go into the learning products business in the future, for domestic as well as international client markets. This is because scalability is achievable to a high degree with such offerings, and providers are able to target specific new audiences with their products (such as B2C products for English language, primary school children; B2B products for sales training, soft skills). For example, Zeus Learning, an e-learning services company, recently launched its product ‘TestFunda.com’, an online/CD ROM based learning courseware delivery platform for CAT aspirants. Companies looking to diversify from their offshoring services model are concentrating more on developing such offerings in the next year.

Catching on to cloud computing

In keeping with trends in the international e-learning space, Indian companies are also beginning to adapt their traditional software applications into software-as-a-service (SaaS) options. SaaS or hosted software development is a new distribution model through which a service provider hosts his software application (over networks such as the Internet/intranet) for customers to access remotely, without any installations on client machines. The SaaS model works particularly well for the e-learning industry due to a few reasons. Client needs and expectations are well met with hosted solutions as:

  • Investments made in e-learning systems are often under contention – through hosted solutions, investments in maintenance (IT personnel) would not be required. e-learning requirements may not be on an ongoing basis (for smaller companies), or dependence on e-learning as a training tool may not be extensive. For various reasons, the pay-per-use or monthly payment options allow clients, especially first- time users, to experiment with a new Learning Management System through a hosted version.
  • SaaS is being regarded as a close companion of the Web 2.0 revolution. Indeed, Web 2.0 is changing the way learners access and consume knowledge. Learning is being demanded across channels and platforms by employees at companies, and tech-savvy students at schools and universities alike. SaaS based e-learning platforms will enable users to stay connected 24×7 through remote hosting. SaaS also facilitates collaborative learning opportunities through connective technologies.



Problem: Western International University (WIU) needed to introduce a campus email system, to enhance communication among students, faculty and administrators. The two options of building their own system or purchasing a software license from a vendor of conventional on-premise software would involve additional resources, significant capital outlay and an on-site technology infrastructure to support the systems. The university was also concerned about the overall time lag involved.

Solution: WIU launched Timecruiser Computing Company’s SaaS based ‘CampusCruiser’, which provided immediate benefits by:

  • Enhancing communications across all campuses, and with all students and faculty
  • Empowering students and faculty to collaborate through online campus communities and networks
  • Increasing campus-wide efficiencies

The solution also saved WIU both time and money by leveraging SaaS technology. The two organizations have since evolved more service synergies.

Much like the IT industry, it is predicted that SaaS will drive growth for the e-learning industry in coming years. According to a study by IDC, SaaS revenues will touch $10.7 billion in 2009, with small and medium businesses being the key market drivers. It must be noted that both e-learning and SaaS are cost saving technologies, reflecting the growth of both industries, independently as well as in tandem. As an illustration of this trend within e-learning, a leading international provider, Skillsoft, claims that a staggering 98.5% of its client base uses its on-demand service to host content, as opposed to the standalone application. Several global leading players such as Skillsoft and Blackboard have launched hosted learning solutions in the last few years, specially aimed at serving the small to medium business market.

Companies in the e-learning outsourcing space in India have in fact noted the possibilities that ‘Cloud Computing’ offers their services. Several players, including leading as well as niche/growing companies, have introduced hosted solutions as a part of their portfolios. Companies such as Harbinger Knowledge Products, Tata Interactive Systems, Brainvisa Technologies, GOLS (Gurukul Online) and Upside Learning have all entered the hosted learning market as an extension to their standard LMS offerings.

Event on November 20, 2009 at Mumbai

Organisational Learning: Impacting Business. Changing the Game

The inaugural CLO Summit 09 , scheduled for 20th November 09, Mumbai, shall be the premier most platform for evangelizing and promoting Organizational Learning & Development. The agenda and speakers for the event include:

1. Organizational Learning: A source of competitive advantage and continuous change. Strategic perspective from the Leadership.
2. ‘Getting a seat at the table‘: The role of the CLO and L&D in organizations; A look at current best practices, challenges and needs for the future.
3. Learning in public sector and non corporate organizations. Current best practices and organizational learning needs given the socio economic environment.
4. Developing Learning Content and delivery: The internet and online learning platforms, e-learning, distance education.
5. Learning in multicultural environments: Conglomerates, Multi National Corporations.
6. Learning and R&D: Role of Learning in R&D intensive organizations; learning and innovation.
7. On the Job Learning, apprenticeship, Coaching and Mentoring: Industry & Organizational Successes.

Speakers – Partial list
Ms. Shaheen Mistri, CEO, Teach for India
Mr. Thomas Varghese, CEO, Aditya Birla Retail
Mr. Kumaar Bagrodia, CEO, LeapVault
Mr. V C Agarwal, Director, Indian Oil corporation
Dr. Mukund Rajan, MD, Tata Teleservices Maharashtra Ltd.

The complete speaker list includes senior management and learning heads at leading companies such as Novartis, Pepsico, Oracle, L&T, IBM, NIIT, HPCL, ONGC, SBI Life Insurance, BPCL and Aditya Birla Group.
Click here for updated event information .

ValueNotes Research
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