Today is a pretty iconic announcement: after decades of investing, Skillsoft has decided to give up the LMS market and sell SumTotal Systems to Cornerstone for $ 200 Million.
While I don’t have any details on the deal yet, it pretty much concludes the innovative phase of the Learning Management Systems market, which clearly marks a new era.
SumTotal Systems is the combination of many older technologies: Click2Learn, Docent, GeoLearning, and dozens of other small companies. Over the years, this company (I’m actually involved in choosing the name) has become a holding company for many LMS technologies, constantly reorganizing itself as corporate training evolves.
Despite many great efforts by Vista Equity and then Skillsoft, however, the technology stack is old and the LMS market has moved on. Companies no longer really want their LMS to operate as an employee-facing system and new platforms like EdCast (also owned by Cornerstone), Degreed, and Microsoft Viva Learning have taken over.
These new platforms are all practice-based systems, and now include vendors such as Gloat, Eightfold, Hitch (now owned by ServiceNow), LinkedIn (LearningHub), and modern vendors such as of Docebo, Workday, and so on. The traditional compliance-based LMS market, pioneered by SumTotal, has become a feature set of back-office software.
Interestingly, Cornerstone, which is now owned by a PE company, wants this recurring revenue. So in addition to acquiring Saba, Lumesse, Halogen, and other legacy talent platforms, the company now owns recurring revenue from SumTotal. SumTotal has some large clients (airlines, some oil companies) so it makes financial sense.
If you’re a SumTotal customer, this is probably good news because you now have a dedicated technology provider as your vendor. For people looking for new learning technology, this is more or less an event. Except for the fact that Cornerstone as a company is becoming more of a legacy technology provider. And it allows Skillsoft to invest heavily in Percipio, its world-class learning platform.
I have high hopes for Cornerstone’s investment in EdCast, and I hope to share more as time goes on.
Additional information
ServiceNow got the Hitch
Cornerstone acquired EdCast
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