The recent SmartForce/SkillSoft merger announcement created quite a buzz in the market and caused many of the industry’s leading analysts and investors to call me for my opinion on the transaction. Virtually every call started with the same question: What’s wrong with the e-learning industry? I wanted to share my answer with your CLO readers because I don’t want them to write off e-learning as a critical piece of their strategy simply because of competitive vendor hype and fading public stock prices. According to IDC, the 2001 corporate training market worldwide is a $60 billion business today. Yet e-learning is only $2.4 billion, a mere 4 percent of the total market. Why? My view is that the industry has been held back by too many vendors making overly complex claims regarding their content, technology and services’ claims that customers don’t understand and don’t care about. What’s been overlooked in the rush to sell technology to enterprises and government institutions is that it’s often non-technical people who are confronted with the task of sorting out the differences between a veritable alphabet soup of techie acronyms. LMS, LCMS, ASP, firewall, SCORM, AICC- to name just a few. As an industry, we have been fighting ourselves with specmanship instead of fighting the real battle with proof that the best e-learning is better than classroom training in terms of results: better knowledge transfer, in less time and at lower cost. KnowledgeNet has studies that prove this, but few other companies have invested the time and money to do the same. The result is that the first wave of e-learning has earned a black eye with early adopters as being too hard to implement, too unreliable and quite frankly, closer to Web-based e-reading than to the vision of quality e-learning. It has over-promised and under-delivered, due in large part to the practical reality that technology vendors are software people, not training and development people, and content vendors have a computer-based training (CBT)/CD-ROM legacy that doesn’t really work on the Web. Our research and our customers tell us that they are ready for a second wave of e-learning. One that was created from the beginning with Web-optimized delivery technology and Web-friendly (low-bandwidth) audio, graphics, animation and even video. The market is looking for e-learning that is engaging for the learner and fast and easy to implement for the company. And clicking on the “next” button doesn’t count as “interactive learning.” If e-learning vendors document the success of e-learning versus classroom training, make the learning itself more engaging and improve the ease and speed of technology implementation, there is plenty of room for everyone to play in the same sandbox. And the CLO will be better served with a cost-effective knowledge-transfer strategy that really works.