VNU Supplier Summit

Los Angeles, Sunday, September 21, 2003

Clark Aldrich is so unassuming for a polymath. He analyzes, he writes articles, he speaks at conferences, his book just came out, he leads product development for a start-up, and today he was presenter and ring master of the Supplier Summit at Online Learning. Fifty to sixty vendors spent Sunday attending this full day of sessions on the state of eLearning, standards, the analyst viewpoint, the customer viewpoint, selling, the future of technology, and benchmarking.

Here are my rough notes from the day:

Standards Panel

Margaret Driscoll (IBM), Brian Taliesin (Microsoft), Wayne Hodgins (Autodesk), Clark Aldrich

Click for Clark's map of standards. It's big but meaty.

Wayne: SCORM 1.3 is the end of the line. There won’t be a 1.4 or a 2.0. ADL will focus on implementation, not churning out new models. The models themselves are becoming more modular. Metadata, API, packaging, sequencing are all different. Check out

Change? The Army, Air Force, Navy, and Marines are breaking down their silos and cooperating.

Senior management is leery of standards because they’ve been burned before. Some turned proprietary, trapping those who adopted them; others are the lone ranger who doesn’t make it.

Who’s successful with this? Waffle, waffle, waffle. Open University in UK (1 million learning objects with 1 million students), EU Frameworks (5 year plans), ARIADNE (10 years).

Customers ask for SCORM compliance but don’t know why. 90% of military is not on SCORM. They don’t know what it is.

Wayne says to head off the roadblocks, simply say that compliance builds a bridge to future projects, some of which we may not even recognize yet.

Standards have zero impact on learning quality.

Clark: eLearning has been a manufacturing and distribution strategy. eLearning is to learning as fast food is to food. Quality has not been a driving force as yet. Wayne: Fast food meets the needs of certain groups, e.g. parents feeding the kids fifteen minutes before soccer practice. The solution should be defined by the problem.

Wayne: Identifier: unique identifier on everything, person, building, whatever. M for metadata. O for objects. (Problem has been trying to quantify the old monolithic models. Everything should be treated as an object.) T for taxonomy. O is for ontologies, relationship between the taxonomies.

Metadata, content packaging, sequencing, APIs, and (coming) QTI. (Questioning and testing interoperability.)

Collaboration issues. Go watch 14 year olds. Great eLearning but they don’t call it that

Competencies. Now monolithic and need to be broken down into skills, capabilities, etc.

RSS. Very good at metadata harvesting. HTML scraping (collecting metadata when it’s not there.) Aggregation.

Wayne: Everything that can be standardized should be.

Customer Panel

Judy Albers, Bank One

Gerry Lang, Microsoft

Steve Wright, Sprint University of Excellence

Judy: In an environment of cuts in IT, her eLearning is prospering. Reporting up and down the management hierarchy is key. Lots of turnover, hence lots of new hires (30% of all training). Acquisition management – making sure the LMS scales, important to get the cultural info as well as the operational.

Can’t get: integration experience. Getting proposals for parts of a solution, not the entire thing. Enterprise integration is breaking new ground. Moving to Websphere; again, the importance of reporting up and down the management hierarchy.

Want per-user licensing, not content library rental.

Little understanding of usability among vendors.

Gerry: bringing 41 different training organizations under one roof. Trying to be responsible for best practices, too.

Buyers don’t know what they want. Vendors don’t say “no” enough. Customers need advice, not yes men.

LMS are still selling version 1.0 and 2.0. Buyers don’t know what they want until they’ve bought the LMS.

Now in a company of 50,000 people, everybody’s an instructional designer.

Steve: It’s more important to provide the learning than to track it.

At Sprint, they try to meet with the internal customer in advance to define the ROI objectives. Now, instead of saying “We provided 32 million hours of training,” we can say “We boosted revenue by $9 million.” It’s given Steve more recognition and clout.

Analyst Panel

Stacy Marmolejo, VNU/Training

Michael Brennan, IDC

Adam Newman, Eduventures

Mike Flanagan, Lguide/Interpid

Brandon Hall

Stacy: Annual survey finds training revenue down $3 billion, from $53 billion. This is the first back-to-back decline in the 22 years. 17,000 companies have disappeared from the D&B list.

Michael: The future is rosy. Majority of eLearning adopters in first three years of the effort. Analytic tools are long-term, not immediate. Live training will be hot. Management ed is a big need. Because many have been burned, expect High Growth in service: infrastructure hosting,

Next four years, IDC sees services growing more rapidly that content or infrastructure.

Mike: If training is down $3 billion. Where did the money go? Part is falling headcount. Some of the training has migrated inside, the “do-it-yourself” meme. Some folks hire talent instead of training. Investments in low-to-no learning curve authoring tools, a trade-off people are willing to make. Tutorial or “simlet” builders, often software apps that convert to Flash. VW Beetle course architecture: easy to keep it on the road for a long time. The instructional design equivalent of duct tape.

Services, services, services. Vendors must assume the cost of the value discussion. (In order to break the commodity pricing cycle.) Practice what we preach: creating capability v. dependence. Rethink “quality” bells & whistles v. porridge.

Customers: don’t try to upsell me now. Give me something that just gets the job done.

Don’t be afraid to focus on learning as the core value proposition.

Brandon: Greatest growth potential – simulation tools and content. In services, implementation and integration are hot. Focus on initiatives to solve a particular business objective. Longer term, growth comes from human capital management = HR + learning + KM. At IBM they call it talent management. The distinctions now are a historic effect.

Training dollars are going mostly to salaries, traditional training, eLearning.Within eLearning, METAgroup breaks out the business as:

  • Services (incl custom devel) 40% (business model? Outsourcing?)
  • Off the shelf content 28%
  • LMS 20% (140 suppliers is way too many.)
  • Content authoring tools 12%

We’re back to a fundamental in this business: local relationships.

Adam: Content, Content, and More Content. (Content is more than content.) Not just about eLearning content anymore, rather where is the best content. Institutions spending more time developing the in-house content. Especially in this environment, search for

Develop a learning roadmap. What is your vision? Building partnerships, not one-time sales. Usability. Identify a core set of traveling partners. Share the itinerary and show customers how to make the journey.

Poor Adam, he’s pushing content, content, content, and everyone else is saying services, services, services. Then his summary of what’s required is a Roadmap. It certainly didn’t work for Israel and Palestine.

Important to think beyond current situation and reach out to CRM, ERP, etc. Don’t miss inking up with them.

Clark Aldrich

The Future of Technology

Hype Cycles

This was a great discussion, and the graphic tells 90% of the story. It’s a monster graphic. but well worth the time to study.

Chunks: sounds good, not happening many places

Blogging is in the theory stage. Clark asked me to describe blogging for the group. Millions of users but still a theory. Ditto Sam Adkins’ workflow based eLearning: all theory right now

Hype cycle is inevitable and painful. It’s almost a physical law.

Human capital management…in the theory stage.


Low-risk, well-defined. Four basic types:

Branching story:

  • Cognitive Arts, Ninth House
  • Easy to deploy
  • Easy to use
  • Good for new-hire, compliance, easier to create

Interactive spreadsheet model

  • Enspire, SMG
  • Compressed timeline
  • Rapid feedback
  • Present complex system
  • Chaperoned

Game-based simulation (not really a simulation)

  • Games2 Train
  • Exicintg, fun, kinesthetic, flexible
  • Good buzz, boring but important stuff
  • Virtual product-base simulations
  • Flashsim,

Bryan Chapman

Benchmarking Your eLearning Products and Services

Number of eLearning players

  • 142 LMS
  • 70 LCMS
  • 63 Virtual classrooms
  • 136 Authoring tools
  • 103 Simulation products
  • 378 Custom courseware development
  • 206 Consulting

Market Size (per META)

  • LMS Platform $500 million
  • Content Tools 300 million
  • ELearning Content $700 million
  • Services $1 billion
  • Total $2.5 billion

Competitive Analysis

Write down ten reasons why someone should buy your product or service? Your competition’s response to this?

$2 million "solution"

  • large finance company
  • 25,000 learners
  • scope creep
  • should have paid about $500,000
  • listed every feature in a Brandon report,
  • wanted everything
  • spent $2,000,000 but should have been $900,000

RFP requirements

  • More requests for internal development of eLearning content
  • Desire to include novice in instructional development process
  • More sophisticated requests for business system integration
  • Dept solutions v. full enterprise wed solutions
  • Huge emphasis on financial viability of the company
  • Single source solutions

Average price per seat of LMS



500 users




1st year




3 year license & maintenance





1ST year




3 year




Illogical variations in pricing

Cost of development for an hour-long course

$4,500 low end of range

$26,613 median

$80,000 high

Posted by Jay Cross at September 21, 2003 11:01 PM | TrackBack


Posted by: at September 22, 2003 03:11 PM

Actually, I've found that SCORM is no longer a dirty word.

Posted by: jay cross at September 23, 2003 12:03 AM

Jay: Thanks for this summary. It's very helpful for those of us who don't have the time or can't afford to attend all of the conferences out there. One question: you mention four sim models but only list three. Did I miss something? Also; I'm getting a lot of interest from my clients in open source solutions (LMS/LCMS)for e-learning.

Posted by: harold jarche at September 23, 2003 07:30 AM


The fourth category of simulations is virtual labs/virtual products.

Clark describes them as "on-screen representations of objects and software that allow significant interation, mimicking many of the physical characteristics of the real-life counterpart." These sims can combine elements of the others types.

On the web, there's a working model of my cell phone. Its purpose is to show how to access features and to demo arcane button combinations.

Posted by: Jay at September 25, 2003 10:56 PM

I agree that there is too much focus on SCORM -- and, I would add, not enough emphasis on simple usability practices in elearning.

Posted by: Michael Heraghty -- Elearning & Usability Consultant at November 10, 2003 12:02 PM

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