| We are pleased to publish IT
Skills Research's sixth annual table of the UK Top 50 IT
training providers.
Read Barrie Charles's commentary
How we compile this listing
As we have done in previous years, we gathered the revenues of
companies with IT training businesses and excluded sales of training
delivered outside the UK and non-IT related business from those
companies that offer both types. We also exclude organisations whose
revenue is derived principally from publicly funded training or
from military/defence-specific IT training, training franchises
whose revenues consist only of royalties and training brokers/portals.
Financial results for some of these organisations are on public
record. In those cases, we have used the actual turnover figure
for their most recently reported financial year. For organisations
whose turnover is not published, we have made our best estimate
based on the information available to us. For every company, we
have indicated clearly whether the figure shown is an actual or
an estimate. Actual (published) revenues are indicated as "A"
- all estimates are marked as "E" in
the Act/Est column.
Figures are UK revenues only, are rounded
to the nearest £100,000 and relate to fiscal years ending
in 2003 (i.e. accounts for the year ending sometime between 1 January
2003 and 31 December 2003).
N.B. The 2002 revenues (used for last year's Top
50) of a few companies are now known to have been incorrect. We
have not, however, altered those companies' 2003 rankings but the
percentage change in revenue has been calculated on what we now
believe last year's revenues to have been.
Thank you
We would like to thank everybody - Training Providers and others
- who has contributed to this project.
If you have any comments or if you believe any aspect of our information
is inaccurate or incomplete please let us know by e-mail
or by calling IT Skills Research/Pardo Fox Ltd on 01483 454 363
IMPORTANT: This information has been carefully
researched. However, we can not guarantee its accuracy or completeness,
and we will not accept liability for any direct, indirect or consequential
loss arising from its use.
Barrie Charles' commentary from
the Top 50 supplement to IT Training July 2004
During 2003, the UK IT training market continued to deteriorate,
thanks to the persistent squeeze on IT expenditure. However, within
this overall picture of decline, our Top 50 supplier table reveals
that many companies are prospering. Although some providers have
suffered and, in some cases, even gone out of business, others are
doing well, simply by making sure that they really deliver what
customers want most.
There have been plenty of changes since last year’s league
tables. According to IT Skills Research, the market declined by
ten per cent, leading to difficult trading conditions for a number
of companies.
Of those firms in last year’s listing, Informatics
Group ceased trading in October after being put into administration
by its Singapore-based parent. The same fate befell KnowledgePool
in January this year, but its assets were acquired almost immediately
by Root Capital and the company continues as a going concern. Similarly,
DACG filed for bankruptcy in the US but, following
a management buyout, the European arm continues to trade.
A few years ago, training businesses were snapped up as systems
companies moved into services. However, in 2003 at least one chose
to reverse that trend, namely Spring Group, which sold its IT training
arm to e-learning and training provider Vidyah in November.
Despite the difficult market conditions, some training providers
are doing extraordinarily well. Two suppliers – Steria
Training Services and Premier IT –
experienced growth that topped 100 per cent in 2003, while more
than half of the Top 50 companies managed to beat the market.
It seems, then, that some companies are prospering, while others
are facing considerable problems. To understand why this is happening,
we first need to look at how customer behaviour is changing.
Throughout most of 2003, corporations continued to keep the lid
on IT expenditure. There was little in the way of “must have”
technology and, in general, firms have preferred to sweat their
existing investments. There comes a point when some projects can
no longer wait – and this was particularly evident towards
the end of the year and into 2004 – but, in the main, major
development projects and rollouts were far fewer than in the heady
days of the millennium.
Survival techniques
Some suppliers have prospered by helping customers get more out
of their IT resources, for example by developing IT staff’s
business and professional skills or by helping IT users make better
use of systems. One example of the latter scenario is SAP’s
initiative to improve the competency of its installed base.
And customers have also been trying to save money on training by
turning to e-learning, which has continued to grow in importance,
with suppliers such as Epic and Electric
Paper doing well. Blended solutions are now the order of
the day, and those traditional suppliers that have adapted, such
as QA and Parity Training, have
outperformed the market.
Outsourcing and the provision of managed training services also
continues to grow as customers seek to reduce overheads –
almost half of the Top 50 seem to be targeting this market, but
only those making a success of it, such as LogicaCMG,
have flourished.
Another growth highlight is the public sector. The major IT investments
in the NHS and government in particular have led to a healthy demand
for increased training.
For example, Premier IT has grown mightily on
the back of demand from the NHS and government, while LogicaCMG
has benefited from central government’s focus on better project
management. And, both Spring IT Training and Electric
Paper have done well from the ECDL competency drive.
Many suppliers have reacted to all these changes by trying to
move to the growth segments, but development of a new product set
or a new customer base takes time. Most of the providers that did
well in 2003 did so because they were already in the right place
at the beginning of the year.
For those that weren’t so fortunate, cutting costs and reducing
fixed assets has been the name of the game for another year. Under-utilised
classrooms have been ditched in favour of using partners to deliver
training in selected regions or by renting rooms as needed from
suppliers such as Regus. The use of freelance trainers rather than
permanent staff has risen, whether as associates under direct contract
or through specialist providers such as BroadSkill.
Some suppliers, including KnowledgePool, have
reduced fixed assets to the point where they no longer own classrooms
or employ trainers and now manage training provision using bought-in
resources instead.
From a curriculum point of view, training companies are also specialising
in what they do best. Breadth of portfolio is increasingly achieved
by using third-party partners, although this might not be apparent
simply by having a quick skim through training brochures or websites.
Fortunes lost and made
Turning to the Top 50 table (see above), we
can see how all these dynamics have affected the fortunes of the
main industry players.
Starting at the top, there are signs that the worst is over for
the major providers. Whereas large suppliers were hit hardest by
the market decline in 2002, it seems that by last year, they had
learned to handle the new market situation. Although both Azlan
and KnowledgePool have dropped out of the top 10
and are now at positions 11 and 12, the majority of the other leading
suppliers have held or increased their market share.
We do have a new number one, though. Last year’s top company,
Learning Tree International, saw a drop in revenues
consistent with its principal business in technical classroom training,
and was overtaken by 2003 runner-up Parity Training,
with its greater focus on e-learning, user training and managed
services. Note that the rise in the latter means that there is likely
to be even more double counting in this year’s figures. Such
revenues are included for both the company that is managing the
provision and for the supplier actually delivering the training.
Moving down the table, it is in the middle ranks where the major
success stories can be found. InterQuad Learning
grew by 58 per cent and moved up ten places to position 10. LogicaCMG,
capitalising on its December 2002 merger, gained 48 per cent in
revenues and leapt seven places to number 15.
Among the new entrants, Steria Training Services
achieved 129 per cent growth and came in at number 26, and Premier
IT grew by 133 per cent to reach number 29.
Some suppliers have disappeared from our table. As we’ve
mentioned, Informatics ceased trading, while Frost
& Sullivan have moved out of the market. JD
Edwards is now part of PeopleSoft, and
most of Technical Training’s business was
acquired by Parity. Computacenter
has been removed following its decision to outsource its training
business to Spring IT Training.
We have also been more stringent with the definition of the commercial
IT training market. Pitman Training and Computeach
International have been excluded this year because much
of their revenues derive from public funding or purchases by individuals.
Prospects for next year
For those left in the table, what does the future hold? For the
first time in over a year, the index of supplier business confidence
collated by IT Skills Research is in positive territory (see Market
Monitor).
In the first quarter of 2004, companies said that on average their
revenues grew substantially year on year. What’s more, projections
for Q2 show further growth.
Even more important is the picture painted by the graph on profits.
Having now reduced costs, increasing business is having a powerful
effect on the bottom line. That means, hopefully, we’ll see
fewer failures this year and less risk for clients.
The fact is that customers cannot put off investment in IT and
in training indefinitely. There is a pent-up demand that cannot
be fully satisfied with low-cost, self-learning solutions. So, with
the public sector buoyant, 2004 could finally be a year of market
growth.
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