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Enterprise Learning - Game On for the Learner Experience!

The Wainhouse Research Blog

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on Unified Communications & Collaboration


Enterprise Learning - Game On for the Learner Experience!

By: -
29 Jun 2018

Last week, Degreed, a leading Learning Experience Platform (LXP) vendor, acquired a smaller rival, Pathgather. LXPs are the fastest growing segment of the Enterprise Learning Market and combining the two firms will allow them to stop competing and capture greater share.  Both companies are privately held and financial terms were not disclosed, but the companies noted they intend to keep all employees.

Based on our analysis, their products have a high (but not 100%) degree of overlap. In a conference call with Todd Tauber, Degreed’s VP of Product Marketing, and Brad Zomick, Pathgather’s VP of Marketing, Tauber revealed that they had lost some deals to Pathgather based on user experience and more tangibly Pathgather’s superior social and collaborative capabilities. Also, Degreed has a greater focus on connecting learning content to skills, whereas Pathgather does that, but has a greater focus on functionality that helps companies relate skills to jobs and even local job markets.

While Degreed for Enterprise will be the primary product moving forward, Pathgather’s customers will remain on the Pathgather platform for the foreseeable future. Degreed’s CEO Chris McCarthy has already presented to a group of Pathgather customers. According to Zomick, the listening tour has only begun.

One of the reasons the merger looks promising to me is that the vision put forth by each company is similar. The marketing VPs agree that the products make skill development more accessible but are more than just new and improved portals for enterprise learners. Given their ability to surface relevant content, engage learners daily, and provide actionable metrics, they both envision enabling an organization to create and nurture a culture of learning.

Tauber added that the next logical step is to rewire talent management with Learning at the core. The idea is perhaps a bit audacious, but not implausible: Recruiting products are used by a small fraction of the workforce, and Performance Management solutions continue to search for the way forward since their cornerstone, the annual performance review, has been deemed ineffective. So, Learning, the third leg of Talent Management wins by default? Perhaps – if the LXP makers can continue to satisfy their customers, who knows?  With over 200 customers and 4 million learners (not including those using their free service), Degreed’s ability to mine the data generated for insights into employee expertise, workforce capacity, and market demand for skills might just give them an advantage in the overall Talent Management market. Looking at another year of high double-digit growth, Tauber has earned the right to speak with confidence.  

Of course, another reason the merger makes sense is that it prevents rival LMS vendors from purchasing Pathgather. After giving the LXP makers plenty of time to build up industry presence and prove their solutions valuable and their firms viable, Cornerstone, Workday, Saba, and Skillsoft/SumTotal have awakened to the threat. While they have added content partners and some LXP functionality, it still feels like Cornerstone, Workday, and Saba don’t quite understand how to harvest the universe of learning content as well as Degreed. Skillsoft, with its large content library, took a different tack, and launched an entirely new LXP product, Percipio. Percipio just had its first birthday, and already it has surpassed 1,000 customers.

While it’s too early to declare winners in the LXP / LMS / Learning Experience fracas, we can say definitively, it’s game on in Enterprise Learning!