August 29 2014

Why the Love for Open Source LMS Solutions? Less Risk.

Written by Lambda Solutions

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uncle-sam-open-source-311x400Just over a week ago, many in the talent and learning management sector were surprised to learn that Skillsoft acquired Sumtotal to bring together their learning capabilities with Sumtotal’s talent management capabilities. This is the 2nd capital transaction for Skillsoft this year—it was only in March that a London based firm acquired Skillsoft for $2.3B+. Large acquisitions like these always come with drastic changes internally. As internal processes change this of course affects the way customers are dealt with and in some cases results in modifications or complete overhauls of product offerings. Acquisitions and mergers are often a great in the long term but short term implications can mean disruptive growing pains for both employees and customers.

Cultural Changes with New Management

Given that Skillsoft, a North American company, was taken over by a Charterhouse, a European run company—many are curious to see how these culturally different management teams will work together. Now that Sumtotal is also run by Charterhouse, many are worried about how products will be changed and priced. Specific changes that are waiting to be seen is how Skillsoft CEO, Moran will choose to use Sumtotal’s products and how he may change or alter the current pricing model. When customers opt for open source learning and talent management systems like Moodle or Totara, the aforementioned changes are ones that they never need to worry about.

Potential Product Changes

Due to the fact that there are many product crossovers that will undoubtedly merge so that two similar products are not being sold from Skillsoft and Sumtotal alike—current customers will likely see fewer modifications in their current products over the next year. For example, if you are a current Sumtotal user, you may be fearful of that fact that system improvements you are expecting or need may not longer happen. You may also be apprehensive of the fact that in two years time you will likely have to migrate to the a new system which will undoubtedly come along with training costs.

Implications for Customers who don’t use Open Source Software

Since open-source software is typically not owned by an entity or organization, customers are almost always safe from the effects of mergers and acquisitions. If you are currently not using open source learning or talent management software, these are the following changes you can expect if a company merges:

  • Immediately there will typically be no risk for changes in the product catalogue or product itself.
  • Medium term, the acquiring company may bring products over from the acquired company to create new products or merge exiting ones. They may also slow down development of the products from the acquired company.
  • Longer term customers may be offered complimentary services that are provided by the existing company. This will not benefit customers who already use the service from a different vendor. They may also stop development and support of the products from the acquired company forcing you to migrate to the new platform and/or products.

If you are a Skillsoft, Sumtotal or a current customer who is using services or products from a company that has recently merged or is about to merge, we highly suggest that you secure contractual reassurance that guarantees support of any current products, services and even APIs. Another way to avoid this headache all together is to consider switching to open source products like Moodle or Totara.

If you want to demo the world's leading open source talent and learning management system, book one today.

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