Skillsoft’s sale of SumTotal to Cornerstone is a strategic move aimed at furthering its position as an enterprise workforce upskilling organization. On June 13, Skillsoft announced it agreed to sell SumTotal, a provider of human capital management software, to Cornerstone for approximately $200 million in cash.
We met with the Skillsoft team and had an in-depth conversation regarding their thoughts on the acquisition.
Skillsoft’s point of view on this divestiture is that it is highly strategic to bolstering its position as a partner of choice for driving workforce transformation through upskilling and reskilling. Skillsoft is further focusing on providing this transformation through differentiated learning experiences which requires leveraging its unique content and platform capabilities. Skillsoft points out that key steps in continuing their efforts to offer a world-class learning experience include:
- Continuing growth in the content portfolio, embracing emerging subject matter areas such as ESG, while ensuring the regular refresh and localization of existing content;
- Expanding technical capabilities that deliver cutting-edge learning experiences with an unparalleled level of interactivity;
- Maintaining partnerships with LMS providers and exploring opportunities for new partners to deliver Skillsoft content; and
- Investing in new capabilities, like Codecademy, and developing other cutting-edge partners such as learning lab providers
Skillsoft believes that delivering learning experiences that drive business outcomes is what their customers want and expect from them. The divestiture provides Skillsoft with the opportunity to maintain focus on its core business and strengthen its position in the marketplace.
The Skillsoft team emphasized that their message to the market is not separate conversations about content or technology. What the Skillsoft team wants to talk about is how their approach to learning improves business outcomes that transform the workforce transformation through upskilling and reskilling.
Skillsoft will continue to offer highly curated content but will also expand into more highly interactive learning journeys through unique course offerings, learning labs and live session training. Focusing on all of these new and exciting areas for developing unique learning experiences is part of the decision to divest SumTotal acquisition.
Apratim Purakayastha, Group Chief Technology Officer for Skillsoft, made a very important distinction in describing their core messaging to the market “we are an enterprise workforce reskilling organization … this is what makes us a partner of choice for our clients”. AP went on to say that a key differentiator in the market for them is that they are not an LMS provider offering third-party content but rather an organization that develops original content at scale delivered through world-class technology. Offering immersive experiences is a primary focus for Skillsoft going forward and that can only be achieved by creating unique content and technology that is delivered in a blended learning experience. Codecademy was quickly pointed out by the Skillsoft team as an example of the unique blended experience of content and technology.
We asked the Skillsoft team how the journey continues post-SumTotal and the answer was “more focus” on providing unique offerings such as Skill Benchmark Assessments. With hundreds of new assessments released last month, these assessments are not your ordinary offerings. They serve as organizational benchmarks for companies. For example, a learner can be tested on what they know and — leveraging AI offered through Percipio — a “hyper-personalized” learning path will be created for the learner. Skillsoft is also committed to offering more interactive content libraries to improve the learner experience.
Skillsoft will continue to look at its build, buy, and partner activities to advance its core strategy of being an enterprise workforce reskilling organization. In particular, the build strategy will include:
- Further investments in immersive learning experiences that blend live, on-demand, and hands-on learning strategies and developing additional Skill Benchmark Assessments
- Further investments in Percipio as a cornerstone to delivering differentiated learning experiences, Percipio will remain well invested by Skillsoft (Percipio was completely developed internally) and a central element of its business strategy
Here is a recap of other strategic transactions that Skillsoft will be leveraging going forward:
- In June 2021, Skillsoft acquired Pluma, an online coaching platform that is being integrated into Percipio. This marked Skillsoft’s first foray into individual coaching as a strategy for upskilling and reskilling, a strong move considering Brandon Hall Group’s research shows that employers believe coaching is the most important strategy to improve drive workforce learning.
- In late 2021, Skillsoft announced the acquisition, finalized in April, of Codeacademy, an online learning platform for technical skills. It offers interactive, self-paced courses and hands-on learning in 14 programming languages across multiple domains and can rapidly expand to deliver new skills at scale. It added to Skillsoft a worldwide community of more than 85 million learners.
“All of these efforts are to maintain focus on driving value in the core assets and markets served by Skillsoft,” according to Mark Onisk, Chief Content Officer for Skillsoft.
Brandon Hall Group research shows that organizations must have a deeper understanding of employees’ capabilities and offer a rich blend of learning experiences to upskill and reskill workforces to thrive in the future of work. Skillsoft is clearly supporting this need with their core strategy.
The sale is expected to close in the second half of this year and both Cornerstone and SumTotal will conduct business as usual until then.
-Michael Rochelle, Chief Strategy Officer and Principal HCM Analyst
-Claude Werder, Senior VP and Principal HCM Analyst, Brandon Hall Group
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