Here’s a look at the IT training market from the purchasers' point of view.

A recent survey conducted by the technology-market research firm IDC suggests that the IT training market continues to grow in spite of slowing growth in capital investment in technology by U.S. corporations. According to the survey, which analyzes IT training spending patterns and service needs, e-learning continues to gain momentum in the IT field.

Setting the pace

IDC’s research, which queried 200 U.S. managers responsible for purchasing IT training, found that found that per-employee IS and technical training budgets grew more grew more than nine percent in 2000. That increase was faster than overall training budgets for the same period.

Several factors contribute to the fast growth of IS and technical training. After the Y2K fizzle, many companies installed software and hardware that had been previously postponed in anticipation of a crisis. As a result of the software and hardware deployment during the first half of 2000, corresponding employee training increased.

Also, in reaction to a tight IT labor market, more companies are training their existing employees to improve their IT skills. More important, the transitory nature of IT workers increases the need of corporations to bring new people up to speed more quickly.

Finally, new and improved technologies are continuously being introduced. To keep up with rapid changes in IT and ensure that employees’ skills are up-to-date, companies must invest in their training or risk having an IT staff with obsolete knowledge.

Demanding value-added services

IDC’s survey reveals that more companies are using value-added training services than ever before. Nearly 95 percent of survey respondents indicated that they’ve used at least one value-added training service within the past year. The most popular services include reporting and tracking tools, pre- or posttraining mentoring and support, inventory and gap analysis, and custom curriculum design and development (see Figure 1). The increasing use of value-added training services indicates those services represent a major facet in enterprise-wide training solutions and can impact a company’s selection of its training provider.

Figure 1: Evolution of Value-Added Services Use, 1998 and 2000

Source: IDC’s Survey of Corporate IT Education Buyers, 1998 and 2000

E-learning increases in popularity

Instructor-led training (ILT) is still the most popular medium for IT training delivery. But technology-based training, fueled by the increasing popularity of e-learning, is gaining ground. IDC estimates that e-learning’s share of the overall IT training market almost doubled from 4 percent in 1999 to nearly 8 percent in 2000 (see Figure 2).

Figure 2: E-Learning Delivery Mix, 1999 and 2000
Source: IDC’s Survey of Corporate IT Education Buyers, 2000

According to survey respondents, the biggest factor influencing their decision to employ e-learning is cost and convenience. Using e-learning, more employees can be trained on the most up-to-date material at a lower cost than other types of delivery media. Additional reasons for using e-learning as part of a corporate IT training program include ease of use, high quality content, and the capability for users to set his or her own pace.

Notably, the opinion that e-learning offers high quality content illustrates how e-learning is beginning to mature and that buyers increasingly recognize the Web as an effective training medium.

However, IDC analysts don’t think that e-learning will replace traditional live instruction. Rather, e-learning will enhance instruction delivery to various audiences, and allow training to take place regardless of time and distance constraints.

The data does indicate that live e-learning will become more widespread as corporate infrastructures develop to support streaming technologies (see Figure 3). Likewise, live e-learning addresses earlier objections to Web-based training, including user motivation and lack of personal interaction.

Figure 3: Use of Live E-Learning for IT Training, 1999 and 2000
Source: IDC’s Survey of Corporate IT Education Buyers, 2000

Bottom line

Despite a soft U.S. economy in the second half of 2000, corporate IT training expenditures rose unabated. IDC’s survey reveals that per-employee spending on IS and technical training is growing at a faster rate than overall training spending. IDC reseach revealed that companies are increasingly using e-learning as a delivery medium. More important, companies aren’t just buying plain vanilla courses from IT training vendors; they’re buying services that support training.

Published: February 2001