Training Mergers Continue

Market consolidation yields bigger vendors with broader product offerings

Two more high-tech training firms merged last week, continuing a consolidation trend that analysts say will yield bigger vendors with broader product lines for corporate trainers.

Last week, Pathlore Software Corp. in Columbus, Ohio, and Silton-Bookman Systems Inc. in Cupertino, Calif., merged to form Pathlore Corp. The new company will offer both Web-based training software and instructor-led training software.

Last month, four training firms formed KnowledgePlanet.com Inc. in Reston, Va., which now delivers online learning products for corporate users.

And last June, SmartForce acquired Knowledge Well Global Learning Systems in Vienna, Va. Redwood City, Calif.-based SmartForce, a major interactive training vendor, was formerly known as CBT Systems.

"We're seeing learning and multimedia (companies) move from mom-and-pop shops to more of an enterprise learning business," said Rick Zanotti, CEO of Relate Corp., a Pathlore reseller in Camarillo, Calif.

"The training industry is very fragmented. Most companies are less than $50 million" in revenue, said Cushing Anderson, an analyst at International Data Corp. (IDC) in Framingham, Mass. But after merging, training companies can offer users a wider array of services, Anderson said.

According to IDC, the worldwide information technology training market totaled almost $19 billion last year and will reach nearly $28 billion by 2003. Currently, IT training comprises 78% of the total training market.

Clark Aldrich, an analyst at Gartner Group Inc. in Stamford, Conn., said having fewer training vendors to choose from would make the selection process less confusing for users. "If I were buying, I'd rather have five choices than 45 choices," he said.

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