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RedThread Research Releases Learning Technology Provider Landscape That Shows an Optimistic and Rapidly Evolving Industry

The 2023 report reveals that skills is still a top trend and “employee development” is being defined more broadly, meaning learning tech providers are embracing a more holistic approach that empowers employees in diverse ways.

RedThread Research, human capital analysts and thought leaders, today released their 2023 Learning Technology Provider Landscape, the highly anticipated analysis of the state of the learning technology market and what the future holds for this tech space.

The learning tech market report represents four months of research and includes information gathered from surveys, interviews and publicly available information from 426 vendors.

Market data, as well as the providers themselves, identified “skills” as a top trend in the learning tech space. In addition to a growing emphasis on skills, the report also reveals that “learning” is expanding to include performance, coaching, engagement, intelligence and business.

Varying levels of optimism span the learning tech provider market: Smaller providers were the most optimistic about revenue growth. Large ones were more cautiously optimistic and expressed uncertainty not seen among smaller and midsize providers.

The report also notes that generative AI is having at least a two-fold impact on learning technology: Providers are cautiously using generative AI to enhance existing functionalities, and the adoption of generative AI could positively affect the industry’s long-term growth potential regarding investments.

“The research shows that learning tech is, in many cases, leading the charge when it comes to the evolving and expanding nature of workplace learning itself,” said Dani Johnson, RedThread co-founder and co-author of the report. “This shift, in tandem with providers’ optimism about revenue growth and the potential for future investment as generative AI creates new opportunities, indicates a fairly bright future for the learning tech space, despite a recent slowdown in tech overall.”

Other themes that emerged from RedThread’s 2023 research into learning technology providers include:

-Consolidation proves beneficial. There has been a bumper crop of acquisitions in the learning tech space since January 2022. Larger organizations appear to be acquiring smaller companies largely for additional functionality.
-In addition to learning budgets, providers are pursuing other budgets related to HR: people operations, employee engagement, talent management, and leadership development. Some providers even directly approach business leaders, bypassing the L&D function.
-Providers and learning and development leaders alike fundamentally view the space differently as a result of three key factors: the pandemic, generative AI, and continuing economic uncertainty.

All of that insight from this year’s report drives home a challenge for learning technology providers: They must find ways to transform their messaging, because vendor messaging is often so similar that it makes it difficult for buyers to differentiate among solutions.

With the explosion in the learning tech space, the report also includes a recommendation for learning and development leaders: Understand the market. They need to know who is playing, what those players are offering, and what questions they should be asking of them. This is the first of two reports; the second report will address trends and providers.