The e-learning (elearning or eLearning) industry remains a very complex, immature, and fragmented market - suffering from inflated estimates of market size and potential. Unfortunately, many of these estimates and projections are still being used today by many e-learning suppliers and analysts. But this is all to be expected with newer, emerging technologies and industries.

E-learning has, to no small extent, suffered significantly from poorly targeted PR and marketing strategies, tactics, and campaigns. Much of the marketing focus of the first generation of e-learning technology was on cost savings. Unfortunately, this is a very weak and one-legged argument to stand on from a sustainable strategic advantage point of view. The focus should have been on results and improved performance from employees, partners, customers, etc. The focus needs to be more appropriately on what the total return on investment (ROI) is. Cost savings of e-learning is only a small part of the overall ROI argument.

With the global education and training budget estimated to be more than $2 trillion - e-learning stands to capture a significant piece of that gigantic $2 trillion pie. As complex, immature, and fragmented as the e-learning industry still is today, it will undoubtedly continue to grow and mature at a relatively rapid pace. E-learning should be viewed as an "enablement" not as a "replacement" learning process or technology.

The drivers for new approaches to learning and knowledge management, it is estimated, are so dominant that corporate markets will grow to $50 billion by 2010. This of course doesn't take into account government (federal, state, and local) or the academic (K12 and higher education) sectors.

E-learning is also becoming a widely adopted initiative and technology outside of the USA. E-learning is actually in a very good state of affairs globally. No matter which estimates and projections are being used - the e-learning myth is going to be dispelled. E-learning is maturing.

Reality Check

Despite much of the negative "PR" over the state of the e-learning industry, its technology continues to evolve and adapt and the market is now positioned for hyper-growth. As the e-learning business model and industry matures, it will likely see traditional consolidation stages with three predominant resulting effects:

• Winners: a handful of big winners will emerge - not necessarily the best companies - just the survivors
• Losers: many losers will either quietly fade away or remain in a struggling position indefinitely
• Niche: small players focusing on niche markets. E-Learning's strength lies in selling highly differentiated or customized content and services.

There will be many more learning technologies that will be widely announced and released but very few will avoid the difficulties of unexpected challenges of the ever-changing conditions of organizational learning needs. The infrastructure providers of basic services may indeed dominate the headlines, but the greatest business opportunity lies in customized products and services. With this said, e-learning is indeed crossing the chasm.

Next-Generation Shift

Early generation e-learning technologies failed to deliver on much of what was promised. This is a simple, costly, and self-evident fact. Like all early or first-generation technologies (i.e.: CRM, ERP, EAI, etc.), these early systems were built to automate and broaden a pre-existing process, rather than to enable an improved process. E-learning was no different. E-learning needs to focus on enabling an improved process for advancing a learners' performance, in addition to being more efficient than the existing process.

Three fundamental facts need to be understood about the e-learning industry to truly appreciate its current state:

• It is still a relatively new industry with early-stage technologies
• It is not intended - nor should it ever try - to replace traditional learning
• It is a diverging - not converging - technology and industry

When all is said and done, e-learning is really about facilitating learning for the learner. It isn't and should never be about the technology or the medium. E-learning is nothing without the learner. As such, e-learning must stay focused on enhancing the learning experience through complementary and alternative learning options. E-learning is a very important component to a comprehensive, blended learning solution strategy.

The Technology Revolutions

Let's face it - no technology will solve every organizational problem. Just as ERP, EAI, CRM, and countless other technologies and systems have been introduced with much acclaim and hype - none have solved all organizational dilemmas or crises.

E-learning as an early-stage technology still faces some unique challenges. However, these challenges are not so unique that we do not have experience to guide us in understanding them better. Technology markets, in general, are unstable and unpredictable. Here today - gone tomorrow! This we know through experience.

However, technology follows some predictable cycles and trends. New technology categories often follow a predictable course to maturity. Similar to the much-hyped arrival of the Internet - but on a much smaller scale - e-learning is enduring what Hal Varian, the dean of the School of Information Management and Systems at University of California at Berkeley, refers to as five stages of technology revolutions.

Characteristically, new technological innovations pass through five main stages as they undergo industrial development:

• Experimentation
• Capitalization
• Management
• Hyper-competition
• Consolidation

Experimentation: follows the development of building blocks for new technologies. Logically, inventors and entrepreneurs anxiously experiment with diverse ways of uniting those components to generate new value propositions - resulting in true "experimentation." Much of the experimentation involves a probing stage for the right business model: Subscriptions, bundling, licensing, etc.

Capitalization: entrepreneurs, the driving force behind technological experimentation, need money or investment to pay for the experimentation. Hence, the constant rise and fall of the financiers (venture capitalist or their equivalent) in these early stage technology ventures. (These early investors will either win or lose big.)

Management: financiers provide capital that enables these entrepreneurs to leap from garage to mass market. This is often a time when the "inventor" or "entrepreneur" will need to evaluate if he/she has the necessary management skills to continue leading the company in the coming difficult stages.

Hyper-competition: here many entrepreneurs will fail. Financiers become risk adverse and pull-out their funding. Also, just as likely, an industry leader may step in and acquire an emerging company. Economies of scale can become the defining competitive activity of the day. Companies that get a head in both demand-side and supply-side economies of scale can generate both cost and a revenue advantage to survive this stage.

Consolidation: as the hypercompetitive stage begins to fade, the winners and survivors need to immediately focus on standardized products, fine-tuning brands and marketing programs, and costs are developed throughout the system. Competition for the market becomes competition in the market. Market shares become better defined, and corporate strategy turns back to taking market share from competition. At this point, dominant players need to learn how to avoid pricing wars and expensive standards battles. In the end, companies will inevitably find it difficult to make the needed transition to a less chaotic environment from that of earlier stages.

Many fledgling e-learning businesses are still in the experimentation phase, struggling to define their business model and their market. Few have moved into the operations phase, where the keys to sustainable success are building a sound operation, establishing the brand, and developing a defined and loyal customer base. Operations, marketing, execution, and alliances are all very critical to the organizations continued and sustainable success.

A fact that may be overlooked in all of this is that these technology revolution stages really never go away altogether. Even though e-learning has gone through the stages of experimentation, capitalization, management, hyper-competition, and consolidation - they remain a continuous process and theme throughout the industry as diverging technologies arise from the e-learning industry.

And as is the norm with such endeavors, many - if not most of these "experimenters" - have been disappointed. As with past technologies, there is a lot of money to be lost in the early stages of e-learning - both as an e-learning company and as an early adopter of e-learning. However, there is also great opportunity to be lost or gained in improving organizational learning as well. The benefits and value created by e-learning outweigh the overall risk.

Emerging Forces

Over the last several months I have had the opportunity to sit down and speak (as well as consult) with several learning companies on their marketing approach and business strategies. In general, what I see excites me. I see the potential emergence of e-learning strategies that could very well deliver on the e-learning promise - dispelling some of the myths that have become so common and widespread today.

In a recent meeting with an e-learning company, we spent several hours discussing adaptive learning and testing, re-usable content or items, prescriptive learning, as well as potential diverging learning technologies and methodologies. Many of these have the potential to lead to better integration of learning systems as well as a comprehensive learner-centric approach.

Learning technology is now maturing. Its focus, as it should, has shifted to a learner-centric approach. Again, e-learning has never really been about the technology. The technology is only an enabling (hence the 'e' in e-learning) factor or facilitator for a more integrated (blended) learning approach and solution. The learning process must be designed and centered on the needs of the learner. E-learning is part of a much larger and more robust strategic organizational learning infrastructure. This larger and more robust view requires a comprehensive vision of the learner - enabling every learner to understand precisely what they need to know, why they need to know it, when they need to know it, and how to learn it.

Bray J. Brockbank has fifteen years successful experience in marketing, management, product, and public relations development and execution. Mr. Brockbank has also been a marketing and business consultant to small and medium-size technology companies. He has extensive experience and success in marketing and managing software, technology, and enterprise learning solutions on a global scale. Mr. Brockbank has also taught on an adjunct basis marketing, management, and technology at a prominent North American college. He can be reached at: BrayJB@hotmail.com .