CAMBRIDGE, Mass. – Dipping its toe into the e-learning space, Big Blue is targeting the corporate and business markets with its Lotus LearningSpace Virtual Classroom software.

The technology provides, among other things: online tabulation capabilities; breakout sessions; record and playback;

and the ability to store content (presentations, schdules and assessments) in Lotus QuickPlace.

But while e-learning promises a significant return on investment, the cost is still prohibitive for many organizations, says Claire Schooley, senior analyst with Giga Information Group in Santa Clara, Calif. The average system is $300,000 to $400,000, plus the yearly maintenance fee could cost about 20 per cent of that. “And that’s before you’ve even put the content on, whether it will be off-the-shelf content, or custom develop it. So you get up over a million dollars very quickly.”

Interoperability poses another big challenge, she says. “There’s a definite lack of standards for synchronizing e-learning systems,” she says. “It’s a very big challenge is terms of content because sometimes you don’t want to get all of your content from one particular provider, you want to get it from a variety of providers and they’ve all developed it differently. They’ve got to make sure that they’re SCORM and AICC-compliant (which are the two standard bodies you hear about). And that’s still a long way from being perfect, there’s always some kind of integration that’s needed or work that’s needed to be done that makes sure the content will run.”

But, she says, IBM’s e-learning rollout is a significant move, despite the market challenges, because most people want access to a virtual classroom as well a learning management system. “People want this in a modular form so they can choose to have it, or not to have it. That’s very important and I think that’s what IBM/Lotus LearningSpace Virtual classroom really is. It’s the first time they’ve had a robust virtual classroom that has all of the components that one might need.”

Jennifer Vollmer, a research analyst with Meta Group, says while Lotus if offering some “neat functionality,” users may not be ready to upgrade. “I like the fact it’s built on QuickPlace and Sametime, and they are offering unlimited licenses for QuickPlace and Samtime, so you’re leveraging alot of existing collaborative technologies.” This is good for internal employees, she says, but wonders how well it will translate to external employees.

But Schooley says IBM has good content and services as well as solid partnerships to help make the product strike a chord with corporations and consumers. “They’ve got a complete e-learning solution and that will be very important for the market from their standpoint because what large enterprise customers will see is a solution that meets their needs because the blended learning is the way companies are going. They don’t want everything online, they don’t want everything in the classroom – they want a blend of the two of them.”

But the road ahead is jam-packed with competitors, small and large, who’re jumping into the space, she adds. “What IBM is doing, what Oracle is doing and Sun – they are all getting into this e-learning management field, and then also being able to provide other partners who will give content and services that will do consulting is key.”

PeopleSoft and SAP have also developed e-learning management systems in a bid to tie in with their ERP and HR offerings, she says. “With this, they are able to say to customers, ‘Not only can we provide for your ERP or CRM kinds of needs, but we can also do the learning for you,’ and that’s very attractive to customers. It’s a lot easier for somebody to use a learning solution that;s provided by a provider that they’re already doing business with. It makes it a lot easier for the integration.”

But one player absent from the e-learning table is Microsoft, she adds. “They are dragging their feet.” Vollmer agrees, saying Microsoft has had some bad false starts in the virtual learning environment. “They have the Microsoft Conferencing Server, NetMeeting, and that is being discontinued. So currently what they have is the Exchange Conferencing Server, which was introduced with Microsoft Exchange 2000. They kind of bungled that offering and it’s pretty much going away and they are introducing a new platform for NetMeetings, so they haven’t come to market with anything. But I think now that Lotus has made an announcement Microsoft will start pushing ahead because thdy don’t want to get beaten out.”

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