MarketsandMarkets: Getting the LMS market wrong

New LMS market analysis with a leader list that includes a company that is retiring its LMS and ignores the company who has a 5x lead in new implementations for its core market? Sign me up.

Over the next week or two, we plan several posts at e-Literate based on the various LMS users conferences we recently attended. We already covered Sakai and Blackboard, and we will have commentary on Moodle, Schoology, D2L, and Canvas soon. But before we do so, I wanted to call out the recent analysis by MarketsandMarkets, which requires some commentary as it is leading to some media coverage that could misinform those trying to understand the LMS market. The headline of their recent market report:

Learning Management System (LMS) Market Worth 15.72 Billion USD by 2021

According to a new market research report, “Learning Management System Market by Application, Delivery Mode (Distance Learning and Instructor-Led Training), Deployment (On-Premises and Cloud), User Type (Academic and Corporate), Vertical, and Region – Global Forecast to 2021”, published by MarketsandMarkets, the LMS market size is expected to grow from USD 5.22 Billion in 2016 to USD 15.72 Billion by 2021, at a CAGR of 24.7%.

This analysis combines the academic LMS market and the corporate training markets. Later in the press release (and also included in media coverage):

Blackboard, Inc. (Washington, U.S.), Cornerstone OnDemand, Inc. (California, U.S.), Xerox Corporation (Connecticut, U.S.), IBM Corporation (New York, U.S.), NetDimensions Ltd. (Hong Kong), SAP SE (Walldorf, Germany), Saba Software (California, U.S.), McGraw-Hill Companies (New York, U.S.), Pearson PLC (London, U.K.), and D2L Corporation (Ontario, Canada) are identified as leaders in the LMS market.

If you’re looking at the future market size, it’s vital to understand the market dynamics involved. For academic LMS market, this list is just wrong.

• In early February we broke the story at e-Literate: “LearningStudio and OpenClass End-Of-Life: Pearson is getting out of LMS market”. We interviewed Pearson executive Curtiss Barnes who confirmed that Pearson was getting out of this business and described why there were making this move. Just two days ago Pearson further described the financial “impact of retiring LearningStudio” in their quarterly financial conference call.

@PhilOnEdTech @marketsmarkets Huh? Leave the market to get top position in it? Now that's some PR!

— Phillip D. Long (@RadHertz) July 30, 2016

• Furthermore, the MarketsandMarkets report lists Blackboard and D2L as market leaders yet ignores Instructure and its Canvas LMS. To ignore Canvas is to misunderstand the dynamics of the academic LMS market. Within their highest revenue core market, Canvas is dominating the new implementations (when an institution switches LMS solutions). Based on our latest research from our LMS market analysis, for the half year January – June 2016 Canvas has 77% of all new implementations of primary LMS solutions in US and Canadian higher education.

• At the recent ISTE Conference in Denver, which represents the largest conference for K-12 edtech in the US, there was near-unanimous viewpoint from people I asked about the dominant LMS vendors – Instructure’s Canvas and Schoology. Google Classroom generates a lot of interest as does Microsoft’s cleverly-named Classroom, but for paid district or school adoption (remember we’re talking about revenue-based market analysis), it’s Canvas and Schoology. D2L has a few very significant wins such as Florida Virtual Schools and the state of New Mexico, and ItsLearning and CypherLearning (NEO) have interesting products as well. I would argue that if you’re doing a five-year projection, PowerSchool should be in the mix based on their acquisition of Haiku Learning and introduction of “Learning” product. Out of these, only D2L is mentioned in the report.

Treat this post as our nudge for MarketsandMarkets to get the basics right when analyzing a market and forecasting where it will be in 3-5 years.

Update: Bumping Michael’s comment into post:

If anything, my Phil understates the case here. Lumping higher ed, K12, and corporate LMSs into the same category is a little bit like lumping railroad cars together with automobiles because they are both called cars, have wheels, and carry things and/or people from one place to another. On top of that, nobody has decent data on the size of the global market, never mind the growth of it. MarketsandMarkets’ “analysis” effectively gives us made-up numbers about a mythical automobile/train car market.

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