| KN 80004 |
| KEY NOTE IT TRAINING : September 2004 |
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This report covers: IT Training, formal courses, tailored courses, e-learning, videos, internat/multimedia, computer-based training products, e-Based distance learning,
Companies and Associations covered include: British Computer Society, British Educational Communications and Tedhnology Agency, British Learning Association, Chartered Institute of Personnel and Development, The E-Learning Network, E-Skills UK, European Institute of E-Learning, European Computer Driving Licence Foundation, Intellect, Institute of IT Training, The Learning Skills Council, The Sector Skills Develpment Agency, IBM Education Service, InterQuad Learning, Learning Tree International, Oracle University, Parity Training, QA, SAP UK, SkillSoft, Spring IT Training, Thomson NETg,
EXECUTIVE SUMMARY
| 1 | Key Note estimates that the UK IT (Information Technology) training market was worth £545m in 2003. The market has declined significantly from £772m in 2000. The global contraction in IT budgets and the cancellation of new IT projects have adversely impacted on the market. However, the final quarter of 2003 saw the first signs that a recovery in the IT industry has started and this is expected to feed through into the IT training market in the second half of 2004. In 2004, Key Note expects the market to grow by 2.8%, the first year of growth since 2000. |
| 2 | The IT training market consists of two broad sectors: instructor-led training (ILT) and e-learning (or technology-based training). E-Learning has been the major growth sector of the market in recent years as it has grown in maturity and sophistication. However, it is increasingly difficult to distinguish between these two sectors given the growing trend towards blended learning. That is, courses featuring both instructor-led and computer-based components. |
| 3 | Companies like Parity and QA which have moved strongly into e-learning generally outperformed the market in 2002/2003, while those such as Learning Tree which continue to offer only ILT courses, have lost market share. In 2003, Parity Training was the largest training provider in the market, followed by Learning Tree International and then QA and Thomson Netg. The training arms of major vendors like SAP, IBM and Oracle are also important players in the market. |
| 4 | Clients are looking to cut their training budgets and are demanding a wide range of delivery media for their training, including classroom-based instruction, mentoring and Web-based training. In other words, the capital investment required in training businesses is increasing, which is squeezing out the smaller operators. |
| 5 | While the industry is showing the first signs of recovery, the end of 2003 and beginning of 2004 witnessed some high profile company failures — e.g. Informatics Group, KnowledgePool and DACG — although some of these have been rescued by buyers and continue to trade. |
| 6 | Major players in the market are embarking on strategic actions to improve their ability to compete in the 2004 to 2009 period. This has resulted in companies changing their service offerings to clients and changing their own internal operations. When facing clients, training providers are offering a wider range of training services — i.e. offering business and professional skills to IT staff and offering outsourcing and managed training services and targeting more aggressively the public sector, whose IT budgets are expanding strongly. Internally, they are bearing down on costs by moving into e-learning and turning fixed costs into variable costs i.e. increasingly buying in training resources from third parties on a needs basis, renting training rooms which only need to be paid for when actually used and using more freelance trainers rather than permanent staff, which cuts their overheads. |
| 7 | A strong recovery in IT training spending is anticipated for the period 2004 to 2009 and the above strategic moves are designed to exploit the key growth areas in the training market over that period. These will be managed services, or outsourcing and out-tasking, professional and general business skills aimed at IT professionals, blended training, multilingual, globally delivered courses (aimed at large, international companies) and training in the public sector. |
TABLE OF CONTENTS
| Executive Summary | 1 |
| 1. Market Definition | 7 |
| REPORT COVERAGE | 7 |
| MARKET SECTORS | 7 |
| Instructor-Based Training | 7 |
| E-Learning | 8 |
| Problems of Calculation | 8 |
| MARKET TRENDS | 9 |
| Computerisation Drives | |
| Demand | 9 |
| IT Budgets: The Pressure Eases | 10 |
| The First Signs of Recovery | 11 |
| E-Business a Driver of Demand | 11 |
| IT Training Becomes More Diverse | 12 |
| ECONOMIC TRENDS | 12 |
| Inflation | 12 |
| Table 1: UK Rate of Inflation (%), 1999-2003 | 13 |
| Unemployment | 13 |
| Table 2: Actual Number of Unemployed | |
| Persons (million), 1999-2003 | 13 |
| Population | 13 |
| Table 3: UK Resident Population Estimates by Sex | |
| (000), Mid-Years 1999-2003 | 14 |
| MARKET POSITION | 14 |
| Table 4: IT Training as a Share of the UK Computer Market† | |
| (%), 2000-2004 | 15 |
| 2. Market Size | |
| THE TOTAL MARKET | 16 |
| Table 5: The Total UK IT Training Market by Value at Current Prices (£m), 2000-2004 | 17 |
| Table 6: Staff Receiving Training in the Previous 13 Weeks | |
| by Type of Company(%), | |
| Q4 2003 | 17 |
| Brand Shares | 18 |
| Table 7: The Top 20 IT Training Providers by Market Share | |
| by Value (%), 2003 | 18 |
| 3. Industry Background | 20 |
| INTRODUCTION | 20 |
| Recent History | 20 |
| NUMBER OF COMPANIES | 21 |
| Table 8: The Number of UK Companies Engaged in the | |
| IT Training Market by Size (£m and %), 2003 | 21 |
| HOW ROBUST IS THE | |
| MARKET? | 22 |
| KEY TRADE ASSOCIATIONS | 23 |
| British Computer Society | 23 |
| British Educational Communications and Technology Agency | 23 |
| British Learning Association | 24 |
| Chartered Institute of Personnel | |
| and Development | 24 |
| The E-Learning Network | 24 |
| E-skills UK Ltd | 24 |
| European Institute for | |
| E-Learning | 25 |
| European Computer Driving Licence Foundation | 25 |
| Intellect | 26 |
| Institute of IT Training | 26 |
| The Learning and Skills | |
| Council (LSC) | 27 |
| The Sector Skills Development | |
| Agency | 28 |
| 4. Competitor Analysis | |
| THE MARKETPLACE | 29 |
| MARKET LEADERS | 29 |
| IBM Education Service Ltd | 29 |
| InterQuad Learning Ltd | 30 |
| Learning Tree International Ltd | 31 |
| Oracle University | 31 |
| Parity Training Ltd | 32 |
| QA PLC | 33 |
| SAP UK Education | 34 |
| SkillSoft PLC | 35 |
| Spring IT Training Ltd | 36 |
| Thomson NETg Ltd | 36 |
| Others | 37 |
| OUTSIDE SUPPLIERS | 38 |
| Hardware and Software Vendors | 38 |
| Other Suppliers | 39 |
| MARKETING ACTIVITY | 39 |
| Table 9: Main Media Advertising Expenditure | |
| by Type of IT Training Companies (£000), Year Ending March, | |
| 2004 | 39 |
| 5. Strengths, Weaknesses, Opportunities and Threats | |
| STRENGTHs | 42 |
| WEAKNESSES | 43 |
| OPPORTUNITIES | 44 |
| THREATS | 44 |
| 6. Buying Behaviour | |
| THE TRAINING AUDIENCE | 46 |
| Table 10: Number of Employed People in ICT Industries and ICT Occupations (000), Q3 2003-Q4 2003 | 46 |
| Table 11: Breakdown of Employees in ICT Industries by Type of Company (000), | |
| Q4 2003 | 47 |
| Table 12: Breakdown of ICT Occupations by Type of Company (000), Q4 2003 | 48 |
| Table 13: Employees in ICT Industries by Sex, Age, Region and Occupation (%), Q2 2002-Q3 2003 | 49 |
| Skill Shortages Persist | 50 |
| Lack of IT Skills is a Tactical Issue | 51 |
| Training Characteristics of the ICT Industry | 51 |
| Table 14: Training Trends in the ICT Industry (%), 2003 | 51 |
| Table 15: The Types of Off-the-Job Training | |
| Provided by ICT Companies in England — those which provided training only, 2003 | 52 |
| Skill Shortages by Occupation | 52 |
| Table 16: Vacancies That Are Hard to Fill in England by General Occupation (000), 2002 | 53 |
| Table 17: Skill Shortage Vacancies | |
| by General Occupation in England (000), 2002 | 54 |
| Table 18: Skill Characteristics of the Occupation Skills Gap in England (number and %) 2002 | 55 |
| Choice Drivers | 56 |
| 7. Current Issues | |
| COMPANY FAILURES AND TAKEOVERS | 57 |
| FREE TRAINING FOR SMALL FIRMS | 57 |
| NEW BUSINESS STRATEGIES | 58 |
| 8. The Global Market | |
| Introduction | 59 |
| 9. Forecasts | |
| INTRODUCTION | 60 |
| FORECASTs 2004 to 2008 | 60 |
| Table 19: Forecasts Total UK IT Training Market by Value at Current Prices (£m), | |
| 2004-2008 | 61 |
| Future trends | 61 |
| Table 20: Projections of Employment in the UK Computer Market and Related Industries (000), 2002, 2007 and 2012 | 62 |
| Table 21: Employment in the Computer and Related Industries by Occupational Group (000), 2002, 2007 and 2012 | 62 |
| 10. Company Profiles | |
| Learning Tree International Ltd | 65 |
| Parity Training Ltd | 67 |
| QA PLC | 69 |
| Thomson Netg Ltd | 71 |
| 11. Further Sources | |
| Associations | 73 |
| General Sources | 74 |
| Government Publications | 74 |
| Bonnier Information Sources | 75 |
Text © 2004 Key Note
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Last updated by Amanda Porteous November 2004
