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LoD Viewpoints August 2006

eLearning Mergers and Acquisitions Continue

Consolidation is continuing to change the shape of the eLearning industry. Mergers and acquisitions affect the competitive landscape for vendors as well as the products and services that are available to buyers. Three significant acquisitions have occurred in recent months: Affiliated Computer Services (ACS) acquired Intellinex, NIIT Global acquired Element K, and Horizon Technologies acquired WBT Systems. This Viewpoints reviews the three deals and discusses implications for other industry players.

A new round of mergers and acquisitions in the eLearning industry shows players attempting to move toward service-based businesses. Two of the three acquiring companies that this Viewpoints describes talk about becoming leaders in learning business-process outsourcing (BPO), and the third is targeting enterprise-consulting services. The move toward services reflects an industry in which learning-management systems (LMS) and off-the-shelf content face commoditization while custom content development—the traditional eLearning service business—is seeing declining prices and rapidly becoming a difficult market for large companies to compete in (see the May 2006 Viewpoints, Do Custom Content Vendors Have a Future?). Each of the three recent deals has a variety of implications for other industry players.

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eLearning Mergers and Acquisitions Continue