Friday, November 03, 2006

SkillSoft's acquisition of NETg

I'm really surprised not to have seen more ripples from SkillSoft's acquisition of NETg from Thomson Corporation. Having acquired Smartforce previously, and now acquiring NETg, SkillSoft seems to be finally closing the cycle on the once lucrative e-learning content business. With its origins from a group of ex-NETgers, and living under a cloud of lawsuits in the early days, SkillSoft has gone from strength to strength, now consuming both of its major adverseries.

What are the implications of this move for corporate customers? Good question. Many corporates have a commitment to either the SkillSoft or the NETg e-content libraries, and I don't see that changing that rapidly because the supplier has changed. The fact that there's now only one big content gorilla might affect competition, but to be honest, I think that was already changing anyway as corporates reconfigure their requirements and commitments. (see this note on generic e-learning we published last year for a view on this).

What really interests me is whether this event will accelerate the shift away from large generic content libraries rather than the other way around. Although maybe slightly contradictory (just as one vendor emerges with a huge content library), I wonder whether the battleground has finally shifted to niche content battles rather than library wars, and whether, in the end, the content (at least the traditional click and turn e-courses of the past)is actually becoming a more marginal part of the customer value proposition anyway. Let's see!



Donald Clark said...

Not such a good thing for the market.

1. Thomson clearly wants out of this market which is worrying.

2. No serious competitor means higher pricing - I'm sure there's a few rushing in to get three year deals before the prices get pushed upwards.

3. Expect lots of ex NETg and Skillsoft staff on the market - this acquisition only makes sense on the back of £150 milion plus cost savings.

4. Time for other smaller players to step up to the plate?

David Wilson said...

It will be interesting to see how the market for generic content evolves going forward, following this move by SkillSoft.

I'm not sure I agree about the lack of competition. Although clearly this does reduce competition for large generic catalogues, I'm not sure the price/value position of these is sustainable at the old levels anyway. There is stil very aggressive competition at the vertical or horizontal niche level, and we see corporates as increasingly unwilling to sign up to broad agreements that do not align with actual usage.