Study: Web-Based Training Market to Top $6 Billion by 2002

According to a new study conducted by International Data Corp (IDC), the U.S. Web-based training market is expected to generate more than $6 billion by the year 2002.

IDC’s research found that Web-based training in the U.S. produced $197 million in revenue in 1997. The $6 billion figure by 2002 represents a compound annual growth rate (CAGR) of almost 95% from 1997 to 2002.

IDC said the expected growth is due to several factors including:

  • increased buyer readiness
  • maturation of IT infrastructures to accommodate Web-based training
  • enhancement of service portfolios
  • increased funding from venture capital sources
  • advancements in Internet technologies and access

In addition, a major shift in distribution vehicles from current market options and hybrid approaches to purely Web-based training is forecasted.

“Healthy market growth will occur as suppliers deliver on the promise of
Web-based training,” said Paul Johnston, director of IDC’s Consulting and
Management Services research.

Cost effectiveness, ease of use, and greater access to content are examples
the study described as compelling characteristics of Web-based training.

“Although classroom delivery remains the most common delivery of education, percentages for Web-based training are rising,” said Johnston. “Buyers are looking to reduce costs associated with traditional classroom delivery and increase the value of their spending dollars.”

Even in its infancy, IDC sees a market trend of start-up companies flooding the playing field, seeking partnerships and joint ventures to expand customer services.

“Merger and acquisition activity in the market is already beginning, and we expect this activity to increase as the race continues to establish market leadership,” said Johnston.

Tracking the next five years, the IDC report said that market growth
and development in Web-based training will be fueled by:

  • compression of R&D cycles
  • shifting distribution models
  • increased preview of training prior to purchase
  • continued investment from venture capital firms

IDC said growth is also expected due to a shift from hybrid approaches such as Web/CD-ROM to purely Web-based delivery.

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