by Jim Lundy
This blog is about what we are calling the content wars.
Saba, empowered by its holding company, PE firm Vector Capital, is doing what is referred to as market rollups. It bought Halogen to beef up its talent management suite and now, it is buying Lumesse, which is far better known in Europe than in the U.S. However, to us, there is more to this deal than just an expansion into Europe.
Why Lumesse?
While the main angle of Saba buying Lumesse is to expand its presence in Europe, Saba and most of the traditional LMS providers need a lot more courseware to offer their clients. We will talk about the content wars later in this blog.
Lumesse has a solid install base of over 4,700 customers globally. The other reason for the Lumesse buy is to extract cash from the Lumesse install base. Private equity firms are very good at monetizing software companies and Vector Capital, the parent company of Saba, is proving to be very good at doing this.
Product Overlap
Of course, there is product overlap with the Saba (formerly Halogen) talent management suite. Lumesse has performed well in the talent acquisition space. On talent management and learning, we expect that Saba will continue to support both offerings for existing customers for the foreseeable future so they can maximize revenues. Over time, we would expect Saba to rationalize the two talent management offerings and to sunset the Lumesse LMS for new business sales.
Lumesse and Curated Content
The popular Lumesse CourseBuilder tool enables enterprises to build their own content or have Lumesse build it for them. We expect CourseBuilder to become part of the Saba learning offering. The bigger part of the deal is the content library that Lumesse has ready to go and this will be of high interest to Saba customers.
What Is a Learning Experience Platform?
Learning experience platforms are really just learning providers that have added content libraries to provide a Netflix-like library of courses that employees are demanding. We think there is a lot more to learning than course delivery, which is why we talk about modern learning platforms and have plenty of research on that.
The issue for LMS vendors has always been a lack of content. I have advised thousands of enterprises over the years and I have always told them that their issue is a lack of a learning content strategy. Then, Degreed entered several years ago.
Saba to Challenge Degreed with Lumesse Content Library
Degreed has become a top choice for CLOs because it aggregates learning content from many sources. This type of “Netflix for learners” is what users at many enterprises want. LMS providers became too focused on talent suites and as such, they didn’t offer enough learning courses. Now, learning and HCM leaders are under siege because employees want more training content. Degreed responded to that need and they have made it very simple for an enterprise to buy a large library of courses from multiple sources.
With the Lumesse content library (which includes content from Skillsoft, Santia, Books, 24×7, CrossKnowledge, and Skillcast), Saba now has nearly the same content aggregation capabilities as Degreed.
Advice for Enterprises
The Saba/Lumesse deal, which closes in Q4, helps to change the game for Saba. Enterprises looking at Degreed for content libraries should now add Saba to the short list. For talent management, enterprises should ask Saba for detailed product roadmaps before signing any deals for the Lumesse talent management suite.