E-Markets and Services - Learning From Each Other

Symbiosis Seen Between E-learning Vendors, Telecom Service Providers

Telecom providers are the perfect channels to attract new customers to e-learning offerings, while e-learning companies can supply rich content to fill up the broadband pipes that sit relatively underutilized.

This symbiotic relationship, while not yet being formally explored, is one that could make Chambers' vision a reality and bring the advantages of e-learning to an even larger audience than ever imagined.

Already e-learning is expected to grow exponentially over the next few years. IDC (www.idc.com) predicts that the market will expand from the $1 billion opportunity it was in 1999 to more than $11.4 billion in 2003.

However, other analysts believe the growth could be even greater, perhaps propelled by new expanded distribution channels, as well as the proliferation of broadband and hosting services offered by telecom service providers. Gartner Group Inc. (www.gartner.com) projects that the e-learning market could be $22 billion by 2003--double that of what IDC suggests.

Diagram:E-learning Drivers

Partnership between telecom service providers and e-learning companies makes perfect sense.

E-learning companies have either the delivery solutions such as learning management systems (LMS), content, or creation and integration tools--or in many cases all three components--that are needed for online education. They also have for customers a number of large Fortune 500 corporations whose IT staff manage these learning systems and content behind their own firewalls.

Telecom service providers have access to robust backbone networks, as well as maintaining hosting facilities and providing broadband connectivity to a wide array of customers. And many competitive providers, particularly CLECs and ISPs, focus solely on small and medium-sized businesses and residential customers--all of whom make a prime audience for e-learning, but don't necessarily have the means of managing their own LMS or the scale to get cost-effective deals on customized content.

The e-learning market is evolving to include the telecom industry to some extent. Many e-learning companies are adding hosted content and ASP pay-as-you-go components for delivering online content as broadband connections to the home and office become more common.

"The more bandwidth that's out there, the more e-learning proliferates," says Tom Falkowski, vice president of learning strategy at click2learn.com Inc. (www.click2learn.com), a company established in 1984 by Microsoft co-founder Paul Allen that provides e-learning solutions. "Bandwidth drives the need for e-learning, and e-learning is driving the need for bandwidth."

Generation 21 Learning Systems (www.gen21.com), Saba Software Inc. (www.saba.com) and THINQ Learning Solutions Inc. (www.thinq.com) are among the many e-learning companies to develop ASP offerings and host LMS and content, in addition to their bread-and-butter solutions, which typically sit behind the corporate firewall.

"We have an entry-level offering called the Saba Learning Network, in which we give [customers] access to a URL and they can populate the system" with their own content, says Kim Woodward, senior director of strategic marketing at Saba.

THINQ hosts not only its LMS infrastructure for web-based use, but also its e-learning content, at facilities operated by the likes of Net2000 Commu- nications Services Inc. (www.net2000.com) and PSINet Inc.(www.psi.net), says Chris Moore, THINQ's CTO.

Generation 21 is reportedly in discussions with Qwest Communications International Inc. (www.qwest.com) because the telco has an ASP offering in which the e-learning company is interested. Telecom companies "are one of the obvious business models for ASP because they should be able to provide the bandwidth," says Michael Watkins, president and COO of Generation 21.

To strengthen today's knowledge-based economy, the ability to easily access rich, multimedia content at anytime, from anywhere, will be of the utmost importance to businesses and individuals that wish to remain competitive.

"A few years ago, [companies] would say that they could save money by not sending people to courses. Today, people talk about the performance gains that can be realized by e-learning," says Falkowski. "E-learning is being seen as something that is a requirement."

Still, the cost savings of learning at the desktop vs. traveling to courses are significant. Consulting firm W.R. Hambrecht & Co. (www.wrhambrecht.com) reports that about two-thirds of training costs are related to travel and lodging expenses. And those figures do not include loss of productivity and revenue related to employees being out of the office.

Telecom companies initially began their relationship with e-learning providers as customers. Companies such as AT&T Corp. (www.att.com), Lucent Technologies Inc. (www.lucent.com), and Sprint Corp. (www.sprint.com) are taking advantage of offerings from major e-learning suppliers such as Docent Inc. (www.docent.com) and THINQ. These telecom vendors and service providers sought out solutions to train their employees in order to keep them up-to-date on evolving technologies, equipment installation techniques, sales and marketing information, and other corporate facts.

"This is where the whole e-learning thing has taken off," says Kathleen Gogan, vice president of marketing at Docent. Lucent was "looking for ways to make [its] organization more productive. They have a huge workforce and they're looking for ways to keep their market share."

Lucent is using Docent to help get their field technicians up to speed more quickly. The problem Lucent was having, says Gogan, was that they couldn't get enough equipment installed fast enough. With e-learning courses supported by Docent, Lucent is getting the information out five or six times faster than it did before, at one-tenth of the cost, she adds.

THINQ, which got its start in early 1995, says that telecom companies are among its largest segments of customers. MCI Communications (formerly MCI WorldCom Inc., now WorldCom Inc., www.worldcom.com), in fact, was one of THINQ's flagship customers, using interactive voice response, telephone registration and phone commands to sign up for courses before the web came into vogue. Sprint, AT&T and Avaya Inc. (www.avaya.com) are now among THINQ's telecom clients, says Moore.

But now that telecom companies have become comfortable with e-learning for their internal workforces, they are beginning to see other ways to take advantage of web-based content for outside education and profit-making purposes.

"This may be a new revenue opportunity" for both e-learning companies and telecom service providers, says Gogan. If the e-learning system is easy for them to use in-house, then they're more likely to recommend it to their partners and customers, she suggests.

In many cases, telecom companies have developed e-learning content to train their suppliers, partners and resellers on current services and product offerings, installation techniques and other related matters.

"People are extending e-learning to train their value chain ... helping train the vendors and other partners with which they have relationships," says Falkowski.

But perhaps the most promise for both parties lies in telecom service providers using e-learning on a commercial basis.

"There are two motivations for telecom companies," says Cushing Anderson, learning services research analyst at IDC.

The first motivation is that telecom service providers have the infrastructure needed to deliver multimedia content--everything from broadband access to geographically diverse locations where e-learning firms can host their ASP offers.

"E-learning is a good component to that because it is so thick," says Anderson. "When you start delivering training to people and it's several hours in length and multimedia, that's a lot of pipe."

The second motivation is that telcos have relationships with a variety of potential e-learning customers, and the telcos are looking for ways to add valuable content to the bundles of services they offer those end users.

"That relationship solidifies the added value to the telecom provider and their client," says Anderson. "When you get that deep into the relationship, it makes the cost of switching [providers] more difficult for the client."

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