The corporate learning system (CLS) market continues to mature and consolidate. This evolution coincides with a higher percentage of organizations looking to reduce the number of software providers within the human capital management (HCM) portfolio. CLS vendors have put together packages of core technologies, including learning management systems (LMSs), learning content management systems (LCMSs), virtual classrooms and multimodal course delivery. In addition, a number of the leading CLS vendors have built out or acquired other talent management functionality that includes performance, succession and compensation management capabilities. Buyers should focus on acquiring the most critical functionality now, while ensuring they're able to incrementally purchase additional modules for future initiatives.

Through our analysis, user inquiry, brand reputation and product footprint, we continue to identify the four market leaders as Cornerstone OnDemand, Plateau Systems, Saba Software and SumTotal. There have been movements among the leaders, but these four vendors have been listed in the Leaders quadrant since 2008. However, the market continues to evolve and consolidate, so there are a number of promising vendors and newly minted suite vendors, built through acquisition, that offer competitive solutions (see Figure 1).

The CLS market remains a crowded market, with over 150 software providers that offer some form of learning management capabilities. This research analyzes offerings from more than a dozen software providers. During the past 12 months, a number of the leading and visionary vendors in this Magic Quadrant for Corporate Learning Systems have experienced solid growth. Cornerstone OnDemand, Sum Total GeoLearning, Plateau and Taleo Learn.com continue to execute and grow their top-line CLS software revenue from 15% to 50%. As part of the research process for this Magic Quadrant, we surveyed 99 customers (primarily from North America, Europe and the Asia/Pacific region) that purchased CLSs within the past five years from one of the vendors evaluated. One of the questions that we asked each reference was: "Other than the vendor for which you are providing a reference, what vendor(s) did your organization consider for your organization's CLS?" From the responses, it is clear that Saba and SumTotal remain the dominant market and mind share leaders, being considered in approximately 40% of these initiatives. The next closest vendor was Plateau, which is considered in about 27% of CLS deals.

Enterprisewide Push Continues

As the CLSs have expanded into more-comprehensive offerings, we've witnessed a transition from departmental purchases toward enterprisewide initiatives. The survey results show that 76% of the references stated that they deployed these systems enterprisewide. Standardization plays a big role in the push toward enterprisewide deployments, as business executives and learning leaders with a more holistic viewpoint concentrate on changes in business metrics, such as revenue, customer retention and satisfaction, rather than simply internal tracking metrics like the number of registrations or hours of training that historically have surrounded learning programs.

In addition, an enterprisewide platform provides a common set of reporting and analysis tools so that management can track and compare learning activities consistently between different parts of the enterprise. Organizational needs have also evolved to emphasize improving business performance, boosting workers' performance and increasing operational efficiency. We continue to see CLS providers investing in their reporting functionality to offer more-robust reporting and analytical capabilities across the enterprise.

Purchasing Drivers

A higher percentage of leading organizations want to spend less time on simply capturing learning data and more time analyzing it. We continue to hear that improving business performance is the primary driver behind the majority of CLS initiatives. Furthermore, IT and business leaders often justify investments in CLSs by citing the need to educate and train employees. However, we are beginning to see more organizations leverage these systems for the extended enterprise to better connect and track nonemployees, such as partners, resellers and customers. We have witnessed a greater number of learning and development (L&D) teams attempt to align their metrics with the metrics of the business (e.g., speed of product launches or level of customer satisfaction). We asked survey participants to use a scale of one to seven, with one being "Not Important at All" and seven being "Extremely Important," to rank the primary reasons and drivers behind implementing CLSs. The top five drivers selected and the mean for each are:

• Improve business performance — 6.24 out of 7

• Reduce cost of training — 6.03 out of 7

• Improve employee compliance — 6.01 out of 7

• Standardize processes — 5.91 out of 7

• Reduce employee time to competency — 5.84 out of 7

Software-as-a-Service (SaaS) and Hosting

The market acceptance of externally hosted (via SaaS or one-off application hosting) continues to grow for CLSs, because these applications are well-suited to the model (i.e., less-stringent uptime requirements and broad organizational use), and there is a critical mass of customers of all sizes deploying CLSs in this manner. Of the references surveyed, less than one-third stated that they deployed their CLSs on-premises. The vendors that market themselves as SaaS providers report higher growth rates relative to the on-premises providers, plus the software providers that offer SaaS and on-premises deployments all stated that SaaS/hosted revenue are their highest-growing revenue segments. A number of the vendors that offer multiple deployment options have publicly stated that anywhere from 75% to 85% of their new business in 2010 was deployed in an externally hosted fashion. One of the primary drivers has been speed of implementation, as a SaaS-based offering can be up and running quickly. The recent survey data shows that over 54% of organizations implemented their CLSs in less than six months, with nearly 30% being implemented in less than three months.

Social Software and Mobile

We have seen enterprises looking to leverage their CLSs to reach a broader population and also aid with the discovery and adoption of information. Studies continue to show that people learn more from their peers than from an e-learning system or even an instructor. Historically, companies have spent the majority of their budgets on formal training, while the majority of time spent on learning is taking place informally. This is forcing companies to face the hard facts that they don't currently control the majority of learning in their organizations.

In 2010, the majority of vendors we cover continued to invest and broaden their social software offerings, such as social profiles, expertise location, wikis, blogs, discussion forums, tagging and ratings. Historically, organizations have looked to a different set of software providers for these capabilities; but when we surveyed the reference customers for this Magic Quadrant, 34% said they planned to implement wikis, blogs and other collaboration tools from their CLS vendor within the next two years, while 11% stated that they have already implemented these tools. In addition, 25% of the respondents stated they plan to invest in social profiles from their CLS vendor before the end of 2012, with 6% already using the functionality. References provided positive comments about the social learning capabilities for products from Blackboard, Cornerstone, Element K, Meridian, Mzinga, OutStart, Saba and SkillSoft, although the respective products are at different stages of maturity. We will continue to see CLS vendors invest and battle to differentiate themselves via enhancements in social software functions.

The increased demands and the adoption of smartphones in organizations have opened another learning path. The majority of CLS vendors have looked to stay ahead of the mobile curve by investing in mobile technologies to meet the growing demands of users, provide a more personal learning experience, and differentiate themselves from smaller providers. The CLS providers look to address the growing "anytime" and "anywhere" demands of learners who are constantly on the go, or in locations with bandwidth constraints. The vendors in this Magic Quadrant have taken different approaches, with some offering a browser-based mobile application, while others have developed or are developing native device-specific applications, and some firms are using USB flash drives. The majority of L&D professionals with whom we have spoken have focused their mobile efforts on informal content that can be delivered in short and digestible pieces. We have also seen organizations with mobile sales forces using their devices successfully as a quick reference for the latest product knowledge, sales training and compliance efforts. One thing is sure, there is a growing market need: 34% of survey respondents stated that, by 2012, they plan to use their CLS provider to deliver content to mobile users. This is a large jump for the 8% that stated they are using it today.

Mergers and Acquisitions (M&A)

M&A activity has picked up since the last CLS Magic Quadrant. Based on the maturity of the market, installed base sizes and recurring revenue streams, private equity firms view this as a ripe market. In 2009, Vista Equity Partners acquired SumTotal; while, in 2010, SSI Investments acquired SkillSoft; and Court Square Capital Partners acquired the software group of RWD Technologies, and renamed the firm Ancile Solutions.

Organizational demands and growing interest in strategic talent management, which requires tighter integration and alignment among a number of HCM components and learning, has led to further consolidation. Since the last Magic Quadrant, Taleo acquired Learn.com, SumTotal acquired Softcape and SumTotal acquired GeoLearning. Based on the maturity of the market, shifts in buying criteria, and the pressures that the recent economic recession put on smaller providers, we expect to see further acquisitions during the next 12 months. The vendors with stronger financial positions will aggressively look to buy market share or broaden their talent management suites. The vendors that offer more-comprehensive and unified packages look to differentiate themselves from rivals that don't offer such functionality.

CLSs continue to expand the functionality and robustness of their components. The five core components that a CLS should provide are:

• LMS — supports the administration and management of learning programs, such as assessment, records management, provisioning of learning, management of training resources and reporting.

• LCMS and content authoring tools — enable the creation, storage, delivery and reuse of learning content.

• Virtual classrooms and multimodal e-learning delivery — underpin various approaches to learning, including formal (for example, instructor-led), structured social, informal and blended styles.

• Social learning — supports the collaborative learning activities of individuals and teams, as well as the creation and interaction of communities of learners.

• Professional services — help create custom content, develop learning strategies and support implementation.

Many vendors offer functions beyond these core components (for example, support for industry-specific requirements). Vendors will continue to add functions and generally improve their CLSs in response to several trends:

• Enterprise scalability. Many customers we surveyed for this Magic Quadrant implemented their CLSs to build a standard learning environment for the whole enterprise so that, for example, management could receive consistent reports across business units. Many references also wanted to improve operational efficiency by consolidating department-level e-learning systems into enterprise CLSs. Vendors whose products can scale to the enterprise level are well-positioned.

• Consolidation. An emphasis on using training to boost workers' contributions to business performance is leading the CLS market to consolidate with the HCM and talent management software markets.

• Integration. Several references expressed disappointment at the level of integration between the components of their vendors' CLS or with related applications, such as HR and talent management. Vendors have an opportunity to differentiate themselves by providing easy methods of application integration, and by expanding the ability to track learning that occurs outside the enterprise, yet is part of the learner's development.

• Compliance. Many references implemented their CLSs specifically for compliance. Enterprises must demonstrate that they meet regulatory and statutory certification requirements. CLSs provide the necessary training, and also offer the management, reporting and analytics for enterprises to show regulators that they have complied with these training requirements.

• Reporting and analysis. Enterprises increasingly want to plan, measure and manage their workforces better, and CLSs provide reports and analytics to help. However, many CLSs spend too much time on internal details (for example, attendance at training classes), rather than measuring the impact of newly trained workers on business performance, such as revenue growth, customer satisfaction and operating efficiency. The appetite and customer demands for reporting and analytics will only increase, because the more management finds out, the more questions it will ask.

The inclusion criteria are consistent with the 2009 CLS Magic Quadrant. To be included in this Magic Quadrant, a vendor must:

• Be the primary developer of an integrated CLS offering that includes functions for the core capabilities: LMS, LCMS and content authoring tools, virtual classrooms and multimodal electronic delivery, and social learning.

• Sell, deliver and support the CLS offering, and provide professional services and other maintenance services.

• Integrate learning management, content management and electronic delivery components, even if some components come from other vendors.

• Generate revenue from CLSs of at least $10 million a year, including revenue from software licenses, maintenance and learning-related services.

• Be regularly identified by Gartner clients and prospects as a notable vendor in the CLS market.

• Be confirmed as a significant or emerging player in the market.

• Market, sell and support its learning products in at least two of the following regions: North America, Europe and Asia/Pacific.

Other Vendors to Watch

There were two new vendors added to the Magic Quadrant this year (i.e., SilkRoad technology and SkillSoft) and there are many other innovative and interesting providers to watch. Other specialist vendors that are benefiting from the growth in the CLS market and did not yet meet our inclusion criteria, but are worthy of consideration in CLS evaluations, include:

• Expertus: Headquartered in Mountain View, California, it's a learning provider of products and services with approximately 500 employees. The company recently launched ExpertusOne Social Learning Platform that looks to bring together formal and informal learning for organizations' internal and external (extended enterprise) needs.

• Kaplan EduNeering: A subsidiary of Kaplan and established in 1981, it is headquartered in Princeton, New Jersey. Kaplan EduNeering delivers compliance and learning solutions, plus a library of more than 550 courses that focus on industry-specific issues in the pharmaceutical and medical device industries. It also offers other risk-mitigation topics, including the U.S. Food and Drug Administration (FDA) inspection and enforcement, and environmental, health and safety.

• Mindleaders-ThirdForce: MindLeaders is headquartered in Dublin, Ohio, while ThirdForce's international headquarters is in London. Mindleaders-ThirdForce is primarily known for its off-the-shelf content, but has broadened its offerings into other talent management areas, including learning, performance development and succession management.

• NetDimensions: Founded in 1999, NetDimensions is headquartered in Wan Chai, District of Hong Kong. It's a publicly traded company on the London Stock Exchange. The company's primary products are the Enterprise Knowledge Platform (EKP), the Enterprise Content Platform (ECP), and the Enterprise Assessment Platform. It recently released a mobile offering, mEKP, that utilizes a USB flash drive.

• PureSafety: Founded in 1999 and headquartered in Nashville, Tennessee, it's a learning provider that focuses on addressing workplace safety, risk management and compliance.

• SilkRoad technology

• SkillSoft

None

Gartner evaluates vendors based on their ability to articulate current and future market direction, innovation, customer needs and competitive forces, and based on how well they map to Gartner's view of the market. We assess their understanding of how vendors can exploit market forces to create opportunities. We consider their products' capabilities, quality and reliability. Vendors' overall viability, installed bases, geographic distribution, customer support and satisfaction, and management teams factor into our ratings as well (see Table 1).

Gartner evaluates vendors on the quality and efficacy of the processes, systems, methods and procedures that enable them to be competitive, efficient and effective, and to grow revenue, retention and reputation. We rate providers according to their ability to capitalize on their vision and their success in doing so.

In 2011, on the Completeness of Vision axis, we evaluated CLS vendors particularly for the comprehensiveness of their offerings (see Table 1). Those that presented more-effective components and capabilities generally improved in the areas of analytics, learner ease of use, mobile capabilities, and support for structured social and informal learning. The social learning platform has emerged as a key component.

Leaders must not only meet the market's current requirements, which are continually changing, but also anticipate future requirements. Vendors must articulate how they will address these requirements as part of a vision for an expanded CLS. Leaders have a track record of financial performance and an established market presence. Their installed bases give them a strong presence in the CLS market, and they demonstrate continued growth in customers and revenue. The market perceives Leaders as thought leaders, with well-articulated plans for product development, marketing and channel support. Leaders have the highest combined scores for Ability to Execute and Completeness of Vision. These strategic providers will continue to drive the market forward by broadening their CLS functions and integration. Buyers can expect that, as a group, Leaders will be considered part of most new product purchases and will continue to have high success rates in winning new business.

Challengers have good product and service capabilities, along with a solid financial position. However, these vendors have generally been followers in functionality, user experience and other key developments in the CLS market.

Visionaries are forward-thinking vendors, but their performance has not given them a leadership position. These vendors are differentiated by their product innovation, but they have not achieved the completeness of solution or the sales and marketing success required to give them a high profile.

Niche Players either have not achieved a broad customer base or lack some of the modules available in a complete CLS. They lack a substantial presence in the CLS market. Some focus on specific industries or geographic markets, and their learning products are typically optional components of their more-comprehensive product offerings. The most significant challenge for Niche Players is to invest in making their learning products more robust, and in marketing them so that they become more competitive.

RWD Technologies sold off its software products group, which included its CLS products, to Court Square Capital Partners in July 2010. The new company, Ancile Solutions, is headquartered in Elkridge, Maryland. Its offering in the LMS/LCMS space is RWD uLearn, which provides learning management and course delivery. Ancile offers the following additional CLS products: RWD uPerform for content creation and management, and RWD uBenchmark, which provides employee performance monitoring. Depending on the products selected, RWD customers can choose from on-premises or hosted deployments. The hosted portion of its business is growing, but the majority of Ancile's installed base has on-premises deployments. Gartner estimates that Ancile generates between $50 million and $100 million in annual revenue.

• Ancile has a significant presence in North America, Europe, Asia/Pacific and Latin America.

• Ancile received positive customer feedback for ongoing communication and customer support.

• uPerform integrates with the SAP Solution Manager document management system to enable SAP implementations and upgrades.

• Ancile has expanded its rapid e-learning course authoring to include scenario-based courses with decision trees and branching.

• Based on our client inquiries and our customer reference survey data, Ancile's brand awareness is lower relative to its CLS competitors. It needs to continue to improve its sales and marketing strategy.

• Ancile must continue its product development of features and functions for social learning to compete effectively with others in the market.

• Reporting and analytics have not kept pace with the offerings from other CLS vendors.

Blackboard, founded in 1997, is a public company headquartered in Washington, D.C. The company is best known in the higher education industry. It has a growing installed base in the corporate market, predominately in the U.S., especially within the public sector. The design center for its offering is social learning, where instructors and learners interact and share information. In this regard, it differs from other CLS vendors, whose heritage is often based in learning management, which focuses on tracking and administrative tasks. Administrative functions are provided by partners that integrate with Blackboard using Blackboard Building Blocks. The company also offers Blackboard ProSites, a SaaS product for small organizations (usually less than 500 employees). In addition to the Blackboard Learn and ProSites, the company offers Blackboard Transact, Blackboard Connect, Blackboard Mobile and Blackboard Collaborate. The collaborate platform was expanded in 2010 with the acquisitions of Elluminate and Wimba. Blackboard is a public company and reported revenue of $447.3 million for the 12 months ending 31 December 2010.

• Blackboard provides an intuitive system that allows instructors and learners to interact with each other and engage in structured social and informal learning.

• Customers indicate that the initial implementation and deployment and training are Blackboard strengths.

• Consistent with the last Magic Quadrant, users commented on the ease of uploading, updating and distributing custom learning content in a wide variety of formats, including documents, audio and video.

• Support for administrative functions, such as registration, scheduling and tracking, needs to improve for Blackboard to meet the needs of more-demanding administrators and to build the system into a complete CLS.

• Blackboard has had success selling at the departmental level; a high percentage of the references in our survey stated that they have not integrated Blackboard with their existing HR systems.

• The company needs to dedicate more resources to building better brand awareness outside higher education. Blackboard has had success growing its business in the public sector, but still has limited penetration in the private sector.

Certpoint (formerly known as Vuepoint) is a private company founded in 1996. It is headquartered in Roslyn Heights, New York. CertpointVLS is an integrated suite architected around Microsoft technologies. The CertpointVLS suite is hosted on the Microsoft Windows Server platform and leverages the Microsoft .NET framework. In addition to its standard CLS platform, CertpointVLS is available as a mobile learning solution used to create, deliver, play and track content and assessment for all major smartphones and tablets. Gartner estimates that 85% to 90% of Certpoint's implementations are deployed via SaaS, with the remaining 10% to 15% being hosted or on-premises deployments. Gartner estimates that Certpoint generates less than $25 million in annual revenue.

• Overall customer experience through the entire relationship life cycle was better than industry averages. In the reference survey, customers indicated that ongoing communication and support was a strength.

• Certpoint has a sizable installed base outside North America, and has put considerable effort into developing multilingual functions.

• The survey results indicate customer satisfaction with Certpoint is slightly above average, compared with the other vendors in the market. Customers highlighted mobile course delivery and the vendor's ability to support nonemployee training as strong points.

• CertpointVLS Content Creator is an integrated authoring environment used for the creation of multimedia courses for the Web and mobile devices.

• Based on our client inquiries and our reference survey data, Certpoint's brand awareness is lower when compared with other CLS vendors. Certpoint needs to continue to improve its marketing strategy.

• Certpoint has had greater success selling at the departmental and business unit levels, relative to enterprisewide deployments.

• As Certpoint continues to build out its offerings, it should work on enhancing the functions that support social learning.

Cornerstone OnDemand, founded in 1999, is a privately held company based in Santa Monica, California. It filed Form S-1 with the U.S. Securities and Exchange Commission (SEC) in September 2010 with the intention of becoming a public company. Cornerstone's CLS is built on Microsoft .NET technology with Structured Query Language (SQL) on the back end. It provides a dependable CLS, as well as performance management, succession management, compensation management and social networking capabilities. Cornerstone offers its solutions exclusively through a multitenant SaaS model. Its offering includes a central portal that integrates e-learning from a variety of providers. Its reseller agreement with ADP has provided additional visibility and exposure in the market. The company continues to execute, reflected in its strong year-over-year growth. Gartner estimates that Cornerstone generates between $25 million and $50 million in annual revenue.

• Cornerstone OnDemand offers an intuitive product that is easy to use for learners, managers and administrators, with analytics and reporting functions.

• Overall customer experience through the entire relationship life cycle continues to be better than industry averages. Customer experience across all facets of product experience was better than average as well. Cornerstone's Client Success Framework provides a consistent approach for ensuring customer satisfaction.

• An approach to knowledge sharing is built into Cornerstone's offering. Users can ask questions of peers, view documents and other types of content, and track topics being discussed in communities. The company has continued to expand its social networking functions.

• Cornerstone has a strong partnering strategy with reseller agreements with ADP and Talent2 (Asia/Pacific region). The ADP relationship is notable because it enables Cornerstone to aggressively leverage ADP's distribution reach and coverage, especially in the midmarket.

• Cornerstone should continue on its product development path to add more mobile capabilities, as it's behind other CLS vendors in providing these capabilities.

• Cornerstone offers only SaaS deployment, so that enterprises requiring a behind-the-firewall deployment must look elsewhere.

Element K was founded in 1982 and has been operating as a subsidiary of India-based NIIT, since being acquired in 2006. Element K has a solid reputation as a provider of off-the-shelf learning content. It provides a CLS called KnowledgeHub that is deployed in a SaaS model. The KnowledgeHub Authoring Tool creates Sharable Content Object Reference Model (SCORM)-compliant content that can include interactive elements such as audio or video. Third-party content is automatically integrated into the LMS with the purchase of the content through Element K. Support for customer and partner education is driven by subscription management modes. Element K is a U.S.-centric company, as it generates over 80% of its revenue from North America. Gartner estimates that Element K generates more than $100 million in annual revenue.

• Element K's system can be personalized using standard administrative tools for custom branding; rules can be modified to meet specific training needs.

• Overall customer experience through the entire relationship life cycle was better than industry averages. In the reference survey, customers cited postsales care/account management and ongoing communications and support as strengths.

• Element K provides an integrated library of off-the-shelf content and tools for developing custom courseware.

• Social learning tools, such as wikis and blogs, are provided through integration with Jive Software.

• The market still perceives Element K as a third-party content provider; the vendor must continue to work to update this image. In addition, the company needs to dedicate more resources to building better brand awareness outside North America.

• Element K should continue on its product development path to add more mobile capabilities. Element K looks to address this and recently announced a new Mobile Learning Enablement Services offering.

IMC was founded in 1997 and is headquartered in Saarbrucken, Germany. IMC's CLS offering is CLIX, a Java Platform, Enterprise Edition (Java EE) application. CLIX works with the course authoring tools Lecturnity and Powertrainer. Livecontext is IMC's electronic performance support system. IMC offers add-on modules for a variety of functions, such as virtual classrooms, assessments, competency management and report design. IMC customers have a choice of on-premises, hosted or SaaS deployments. Gartner estimates that IMC generates less than $25 million in annual revenue.

• IMC incorporates learning process technology into its offering, which enables learners to create a personalized curriculum of blended courses according to their profiles and skills. The learning process sequencing is linked to integrated skills and competency management.

• Customers indicated that integration among the components of the CLS was a strong point.

• IMC has had success in Europe, especially in German-speaking markets. It's worth noting that CLIX is SAP NetWeaver-certified.

• CLIX can be integrated with Microsoft SharePoint Server technology using CLIX webparts for SharePoint.

• Based on our client inquiries and reference survey data, IMC's brand awareness is lower when compared with other CLS vendors, especially outside Europe. IMC needs to continue to improve its sales and marketing strategy.

• IMC will benefit from continued attention to product reliability, as customers cited product quality as an area for improvement.

Meridian Knowledge Solutions was founded in 1997, and now operates as a subsidiary of Visionary Integration Professionals (VIP) since its acquisition in November 2006. Meridian's headquarters has remained in northern Virginia. Meridian Knowledge Solutions' offerings for the CLS market include Meridian Global, Meridian Workforce Analytics and Meridian Anywhere for mobile devices. Its products are built on .NET, which enables users to integrate with legacy systems and modify the LMS without affecting the base code. The product architecture provides users with more than 2,000 APIs that can be used to make modifications to the application or for integration with other systems. Meridian customers have a choice of on-premises, hosted or SaaS deployments. Meridian has a large installed base in the public sector, as well as many commercial clients, ranging from midsize to global enterprises. Meridian is a U.S.-centric company, as it generates over 85% of its revenue from North America. Gartner estimates that VIP-Meridian generates more than $100 million in annual revenue.

• Overall customer experience through the entire relationship life cycle was better than industry averages. In the reference survey, customers indicated that experience through the sales process and postsales care/account management were strengths.

• Meridian supports social learning with proprietary tools that enable users to interact in a collaboration space to share, comment and rate learning content.

• Customers indicated that product quality and system performance were better than average.

• Meridian is a certified reseller of OutStart LCMS and OutStart TrainingEgde.com collaborative authoring; it also offers Articulate and Lectora for course authoring.

• Based on our client inquiries and reference survey data, Meridian's brand awareness is lower relative to other CLS vendors. Meridian needs to continue to improve its sales and marketing efforts. In addition, the company needs to dedicate more resources to building better brand awareness outside North America.

• Customers on the Meridian Knowledge Center cite analytics and reporting as areas for improvement. Meridian's analytics and reporting capabilities have improved in Meridian Global.

Mzinga is a privately held company that was founded in 2007 and is headquartered in Waltham, Massachusetts. Mzinga offers its solutions exclusively through a cloud-based SaaS model. OmniSocial is a social software solution that incorporates a broad range of communication, learning and knowledge-sharing capabilities, including social networking and collaboration, formal and informal learning, and performance management. Mzinga's tools for collaborative authoring (Mzinga Publisher) and software simulation (Firefly Simulation Developer) come separately or as part of the CLS. Mzinga Catalog provides learning with a variety of courseware that is accessible from OmniSocial. Mzinga Link is the company's Web conferencing and virtual classroom solution. Through its acquisition of Prospero in 2008, OmniSocial includes a platform and applications needed to host and manage a community through internal and external-facing communities. Gartner estimates that Mzinga generates between $25 million and $50 million in annual revenue.

• The recent survey results indicate customer satisfaction for Mzinga is slightly above average, compared with other CLS vendors, with ease of use and product quality as areas of strength.

• Mzinga has incorporated social software into its approach to learning. Learners can collaborate using discussions, blogs, file sharing, idea sharing and event chat, as well as tag, comment, review and rate content. This can be accomplished through multiple social learning models.

• Mzinga received positive marks from customers for initial implementations and deployments.

• Mzinga lets users create profiles that enable them to find, connect and "friend" colleagues.

• Mzinga brand awareness is lower, when compared with other CLS vendors, based on our client inquiries and reference survey data. Mzinga needs to continue to improve its sales and marketing strategy.

• Gartner estimates that Mzinga's total revenue is between $30 million and $35 million; based on client inquiry levels, Gartner believes the revenue mix is shifting away from learning.

• Customer feedback was similar to the last Magic Quadrant, as customers continue to cite reporting as an area for improvement.

Oracle, founded in 1977, is publicly traded, with headquarters in Redwood Shores, California. Oracle offers a broad array of applications, as well as middleware and database technologies. Oracle E-Business Suite (EBS) is a comprehensive HCM suite that includes integrated talent management (including CLS) applications. Oracle offers three products for learning management: (1) Oracle Learning Management (OLM) is built into Oracle EBS and is a component of Oracle's talent management offering, which integrates with Oracle Human Resources, Financials and Projects; (2) Oracle iLearning (OiL) is a SaaS offering for rapid deployment that is positioned independently of the ERP system, and can also be deployed on-premises as a stand-alone product; and (3) PeopleSoft Enterprise Learning Management (ELM) is integrated with PeopleSoft and JD Edwards HR applications, as well as PeopleSoft Financials. This description discusses Oracle EBS OLM and OiL.

• Oracle has had success selling OLM into the EBS HR customer base to improve workforce knowledge and performance.

• Customers continue to state that integration between the core HR management system (HRMS) and OLM is a key reason for purchase.

• Oracle offers OiL directly as a multitenant offering, but also has had success going to market with partners such as Seertech Solutions in North America, Europe and Asia/Pacific, and Ubiquitous in China. Seertech offers an iLearning Plus product, and provides SaaS and business process outsourcing (BPO) support.

• The Oracle User Productivity Kit (UPK) offers prebuilt learning content for EBS release 12 (R12) and OiL 5.2.1.

• Our recent survey indicates customer satisfaction rates slightly below average compared with other CLS vendors, with ease of use and documentation as areas for improvement.

• Oracle's financial performance is strong, and the company is highly profitable, but its OLM and OIL revenue only represent a relatively small part of the business for the EBS product line.

• Oracle still needs to continue to develop its approach for multimodal course delivery, including virtual classrooms and mobile content delivery. Oracle looks to address this in upcoming releases of OLM and OiL, which are slated for sometime in 2011.

Oracle, founded in 1977, is publicly traded, with headquarters in Redwood Shores, California. Oracle offers a broad array of applications, as well as middleware and database technologies. This description discusses Oracle PeopleSoft ELM.

• PeopleSoft ELM targets the PeopleSoft HR customer base to improve workforce knowledge and performance.

• ELM 9.1 provides deeper integration with Oracle's other HCM offerings, including Profile Manager, Performance, Succession Planning and Career Development.

• Customers state integration between the core HRMS and ELM as a key reason for purchase.

• Oracle provides Web services, called Enterprise Integration Points, to provide bidirectional data integration between ELM and PeopleSoft HR.

• The reference survey results show that the overall customer experience through the entire relationship life cycle was below average. Customers indicated that postsales care/account management and ongoing communication and support were areas for improvement.

• Oracle must continue its product development of features and functions for social learning to compete effectively with others in the market.

• Oracle received lower marks for ease of use from its references, as a number of customers mentioned additional customization needed to improve usability.

OutStart was founded in 1999 and is headquartered in Boston. OutStart positions itself as a knowledge solution provider that offers a portfolio of learning applications and knowledge-sharing software. The company's learning solution focuses on its LCMS. OutStart customers have a choice of on-premises or hosted deployments. OutStart has combined its LCMS, LMS, mobile and social learning capabilities into a SaaS offering, called TrainingEdge.com, which targets small or midsize businesses (SMBs). In addition, its social business software solution (OutStart Participate) works with any LMS or LCMS. OutStart Trainer and OutStart SoftSim provide course authoring. In June 2009, OutStart merged with Hot Lava Software, which provided tools to develop, deliver and analyze mobile learning content. Gartner estimates that OutStart generates between $25 million and $50 million in annual revenue.

• The recent survey results indicate customer satisfaction is in line with industry averages, with customers highlighting course development as a strong point.

• OutStart's approach to social learning allows multiple types of learning content, such as documents, websites and learning activities, to be aggregated into a single course.

• Customers continue to provide positive marks for initial implementations, deployments and training.

• The acquisition of Hot Lava in 2009 expanded OutStart's multimodal delivery strategy and allows content to reach a wide variety of mobile devices.

• OutStart has a sizable installed base outside North America, with more than 40% of revenue being generated internationally.

• OutStart will benefit from continued attention to product reliability, as customers cited product quality as an area for improvement.

• OutStart has had more success selling its products at the departmental or divisional levels versus enterprisewide. A high percentage of the reference customers stated that they haven't integrated OutStart to the company's HR system.

Plateau Systems, founded in 1996, is a privately held company based in Arlington, Virginia. Plateau provides reliable products for learning management, offline course delivery, course authoring, virtual learning and exams. Plateau looks to differentiate itself with its iContent offering, which provides access to a library of content from third-party providers. Plateau's products are built on a scalable Java EE-based architecture, which includes a full Java API to facilitate integration with other systems. Plateau customers have a choice between an on-premises or a multitenant SaaS deployment. From the survey data, it's evident that there has been continued interest and momentum behind Plateau's SaaS offering, as over 70% of the references stated they chose the SaaS deployment model. In addition, Plateau reported that over 90% of new platform bookings were SaaS for the first half of 2010. Plateau's CLS solutions are appropriate for midsize and large global organizations. In additional, Plateau offers a talent management suite that includes performance management, succession management and compensation management capabilities. Plateau is a U.S.-centric company, as it generates over 80% of its revenue from North America. Gartner estimates that Plateau generates between $50 million and $100 million in annual revenue.

• Plateau has a solid partnership strategy. It recently inked a strategic partnership with Workday. Plateau resells Trivantis (Lectora Online) as part of its iContent solution.

• Plateau has provided financial data that details continued top-line growth during the economic slowdown, with the company remaining non-generally accepted accounting principles (GAAP) profitable.

• Plateau received positive customer feedback for postsales care/account management and ongoing communication and customer support. This high level of satisfaction is also reflected in Plateau's client renewal rate, which was above 99% for the past 12 months.

• In May 2010, the company announced Plateau Foundation, a platform-as-a-service (PaaS) solution. Plateau Foundation is a Java-based application extension framework that offers users the flexibility to implement extensions to their Talent Management Suite to address unique business requirements.

• In addition to corporate learning, Plateau offers strong functionality across other talent management areas like performance, succession and compensation management.

• A number of customers cited reporting as an area for improvement. However, a couple references also mentioned seeing improvements with the use of Actuate BIRT open-source technology for their reporting and analytics needs.

• Plateau needs to continue to dedicate more resources to building better brand awareness outside North America.

Saba Software, founded in 1997, is one of the few public companies in the CLS market. The company is headquartered in Redwood Shores, California. The Saba Learning Suite is built on Java EE and consists of Saba Learning Commerce, Saba Content Management, Saba Publisher, Saba Centra, Saba Live and Saba Anywhere. Saba Content Manager manages the workflow among content developers; a variety of authoring tools can be integrated into Saba Content. Saba Publisher is used to author and publish content to the repository and to mobile devices. In addition to the Learning Suite, Saba offers a broad set of products across other talent management areas like performance management, succession planning and compensation. Saba's customers can choose from on-premises or SaaS deployments. Saba has stated that its SaaS solutions (includes hosted) are the fastest growing segment of its revenue mix. Saba reports annual revenue of more than $100 million.

• Saba has established itself as a market share and mind share leader for corporate learning systems. This is reflected in the survey responses, as almost 40% of respondents consider Saba as a provider during their learning initiatives planning process.

• Saba has global implementation and support services, enabling it to serve large distributed enterprises. Overall customer experience through the entire relationship life cycle was better than industry averages. In the reference survey, customers indicated that postsales care/account management was a strength.

• Saba allows users to create a social profile that connects learners based on common interests; learners can be grouped according to profile attributes or shared activities.

• Saba has a strong partnership strategy. In 2009, Saba and IBM announced that IBM would provide Saba's enterprise learning offering as part of the WebSphere Portal accelerator family, placing it on the IBM price list for all IBM sales representatives and partners worldwide.

• Saba users can access Saba Learning via the WebSphere Portal, and there is integration between Lotus Connections and the Saba profile. Saba has a plug-in for Microsoft Outlook that allows direct calendar integration with Microsoft Exchange.

• Saba needs to continue to invest in its user interface, as customers indicated that overall ease of use was an area for improvement. The scores were better for ease of use for administrators, relative to ease of use for learners and managers.

• Customer feedback on support has improved since the last CLS Magic Quadrant, but customers cited documentation as an area for improvement.

SAP was founded in 1972, and is headquartered in Walldorf, Germany. It is listed on the Frankfurt and New York Stock Exchanges. SAP offers its CLS capabilities as part of a broader ERP/HCM suite. SAP Enterprise Learning includes functions for learning and learning content management. The solution is offered on-premises, but hosting options are available through third-party providers. SAP Enterprise Learning uses Web services based on SAP Exchange Infrastructure (SAP XI) powered by NetWeaver to integrate third-party learning services (such as tests and Web-based content) and virtual classrooms. It focuses its sales and marketing efforts on companies that use SAP HCM.

• SAP Enterprise Learning shares data with all other applications in the SAP Business Suite via a single competency, organizational and employee data model, so changes appear in all components in real time.

• Customers stated integration between the core HRMS and SAP Enterprise Learning as a key reason for purchase.

• SAP integrates with social software, such as Jive Software, Socialtext and Microsoft SharePoint.

• SAP provides support for virtual classrooms using Adobe Connect.

• In the reference survey, customers indicated overall ease of use and the ability to customize as areas for improvement.

• Overall SAP's financial performance is strong, but CLS represents a relatively small part of the business for the SAP Business Suite.

• SAP does not offer e-commerce support for course payment, which may be an issue for companies that want to use it for partner training.

SilkRoad technology, founded in 2003, is a privately held company with more than 200 employees; it is headquartered in Chicago. It began as a content management vendor, then grew into e-recruiting (via an acquisition). It has since expanded into the broader talent management space, with the acquisition of Human Asset Technologies in 2005. In 2008, SilkRoad acquired e-learning vendor VTN Technologies, which is now called GreenLight. Built using the Microsoft .NET platform, GreenLight the product is primarily sold as a SaaS solution, but also has on-premises clients. GreenLight targets midsize to large U.S.-based multinationals, reflected by its installed base. Over 85% of SilkRoad's CLS revenue is generated in North America. Gartner estimates that SilkRoad generates between $25 million and $50 million in annual revenue.

• In the customer survey, references cited ease of use as a strength for SilkRoad.

• The company has a growing global support and sales network, and robust customer growth, especially in the midmarket.

• SilkRoad's Imagen LCMS allows organizations to create media-rich content using text, graphics, audio and video.

• Based on our client inquiries and reference survey data, SilkRoad's brand awareness is lower relative to its competitors. SilkRoad needs to continue to improve its sales and marketing strategy.

• Overall customer experience through the entire relationship life cycle was below industry averages. In the reference survey, customers indicated that postsales care/account management and ongoing communications and support were areas for improvement.

• Integrating functions for a more complete HCM suite (recruitment, EPM, learning and core HRMS) will be challenging, and could put a strain on R&D resources.

• The company needs to dedicate more resources to building better brand awareness outside North America.

SkillSoft was founded in 1998 and is headquartered in Nashua, New Hampshire. Early in 2010, SSI Investment, which includes Berkshire Partners, Advent International and Bain Capital, took SkillSoft private for approximately $1.1 billion. SkillSoft is one of the largest e-learning vendors in the market, with a solid established reputation as a provider of off-the-shelf learning content. It also provides SkillPort, a CLS that can be deployed on-premises or as a SaaS model. SkillSoft has indicated that over 95% of its clients have chosen the SaaS model. The company offers a broad set of products that includes SkillSoft inGenius for social learning, SkillSoft Dialogue Live for virtual classrooms, SkillStudio and Dialogue Design for content development and authoring, and SkillSims for simulations. SkillSoft's public filings show that it generated over $300 million in annual revenue for the fiscal year ending January 2010.

• SkillSoft's system can be personalized and configured for branding, registration settings, language, search and user interface preferences.

• Overall customer experience through the entire relationship life cycle was better than industry averages. In the reference survey, customers indicated that postsales care/account management and ongoing communications and support are strengths.

• SkillSoft provides an integrated library of off-the-shelf content and tools for developing custom courseware.

• SkillSoft allows organizations to quickly locate relevant content through its search engine (Search-and-Learn) or its catalog.

• SkillSoft has had greater success selling at the departmental and business unit levels, relative to enterprisewide deployments.

• SkillSoft should continue on its product development path to add more mobile capabilities, as it's behind other CLS vendors in providing these capabilities.

SumTotal Systems, founded in 2004, is headquartered in Gainesville, Florida. SumTotal was formed with the merger of Docent and Click2Learn in 2004. Since July 2009, it has been privately held and owned by Vista Equity Partners. SumTotal provides a .NET-compliant CLS offering. SumTotal customers can choose between on-premises and SaaS deployments. SumTotal offers its own tool, ToolBook, for course authoring. In September 2010, SumTotal acquired Softscape, a talent management suite provider that also offers learning functionality. We anticipate that SumTotal will continue to develop and offer its Learning solution and, over time, provide tighter integration to the Softscape solutions. In January 2011, SumTotal acquired GeoLearning to broaden its learning portfolio to support SMBs. The products have not been integrated yet. (See the entry for SumTotal GeoLearning in this research for details on GeoLearning.) Gartner estimates that SumTotal generates between $150 million and $200 million in annual revenue.

• SumTotal has established itself as a market share and mind share leader for CLSs. This is reflected in the survey responses, as almost 40% of respondents consider SumTotal as a provider during their learning initiative planning process.

• SumTotal's network of direct sales representatives and distributors gives it global presence and the ability to support organizations worldwide.

• The acquisition by Vista Equity provides some financial stability, enabling SumTotal to focus on growth. The company indicated that its SaaS deployment option has been driving a greater percentage of company revenue.

• SumTotal provides users with SOAP Web services for integration with other applications; the TotalIntegration module provides an XML-based interface for batch data transfers.

• Management transitions and internal turnover at the company have caused some disruption. A number of reference customers cited postsales support/account management as an area for improvement.

• Reporting and analytics have not kept pace with the offerings from other CLS vendors.

• SumTotal needs to focus more of its product development on increasing support for social learning.

GeoLearning was purchased by SumTotal Systems in January 2011. SumTotal is still in the process of integrating product lines, so Gartner continues to list SumTotal and SumTotal GeoLearning separately on the 2011 Magic Quadrant. GeoLearning was headquartered in West Des Moines, Iowa. Its products are built using .NET and Java EE technology, and are offered via a SaaS model. The company provides several course authoring options, such as Articulate, Thesis, Lectora, Raptivity and ToolBook. In addition, it offers a broad set of talent management capabilities, including performance management. GeoLearning is U.S.-centric and generates over 85% of its revenue from North America. Gartner estimates that GeoLearning generates between $25 million and $50 million in annual revenue.

• Users have a great deal of flexibility when customizing the interface. Rights to configure items such as layout, color scheme and style definitions are managed by permissions and can be assigned directly to learners.

• Standard competency models are included to help learners map content to learning activities.

• Several packaged widgets are offered as part of the "widget module" that customers can use to build a user experience that meets their business requirements.

• Recent customer references continue to cite product quality and system performance as areas for improvement.

• As GeoLearning becomes more integrated in the SumTotal portfolio, it needs to monitor customer satisfaction, as a number of customers noted that postsales support/account management is an area for improvement.

• SumTotal GeoLearning needs to dedicate more resources to building better brand awareness outside North America.

Taleo, founded in 1999, is publicly traded and headquartered in Dublin, California. Taleo provides a range of talent management offerings. Taleo acquired its partner in learning, Learn.com, in October 2010. Taleo's offering for learning and talent management, Taleo Learn, is built on a .NET platform. Taleo offers its solutions exclusively through a SaaS model. A content manager allows a range of formats, such as audio, video and documents, to be uploaded into Taleo Learn. Taleo also offers a built-in what-you-see-is-what-you-get (WYSIWYG) course authoring tool. Gartner estimates that Taleo Learn generates between $25 million and $30 million in annual revenue.

• Overall customer experience through the entire relationship life cycle was slightly better than the industry average. In the reference survey, customers indicated that postsales care/account management was a strength.

• The Taleo architecture enables users to create multiple LearnCenters with the same instance of the product. Thus, the needs of multiple groups can be accommodated, while reusable content can still be shared and reporting remains centralized.

• Although Taleo is primarily a SaaS provider, it has a well-thought-out architecture to enable configurations. Customers cited this ability to configure as better than average.

• Taleo includes an extensive library of off-the-shelf IT and "soft skills" content as part of its offering.

• In addition to corporate learning, Taleo offers strong functionality across other talent management areas like performance, succession and compensation management.

• Taleo should focus on providing a more consistent customer experience for Taleo Learn, as it received lower marks from customers regarding initial implementations and deployments.

• Learn.com's customer base was predominately in North America, but the acquisition by Taleo should help accelerate the company's global visibility and international expansion.