How is the learning systems market responding to wider economic changes?

Published in February 2025, the Fosway 9-Grid™ for Learning Systems looks at the market for Suites and Specialist platforms in the learning technology space. Here, Fosway analysts look at how various market segments are performing, plus how AI is really being adopted.

Market still impacted by global economic climate

Whilst the overall learning systems market is still growing, it is still being negatively impacted by the wider economic climate – especially in UK and Europe. Last year we saw more vendors reducing operating costs and headcount, whilst sometimes still expanding and moving into new regions. This year, there is lots of innovation but buyers remain cautious.

With the cost of capital still being relatively high, investors are also careful about additional funding and plans for expansion, prompting most vendors to place a stronger emphasis on profitability! The market in Europe, although economically challenged, is still competitive, particularly in the mid-enterprise segment. The Middle East continues to be a hotspot, and if vendors can satisfy the strict data hosting requirements, there are new buyers hungry for more choices and a better experience.

Size of first-time buyers continues to decrease

At large enterprise levels, there are relatively few new ‘greenfield’ buyers and overall market growth is in single digit percentages. Low customer but higher revenue growth is still possible as vendors seek to expand the scope of offering and services within existing customer contracts, e.g., increasing learner licences or upselling additional products. In the mid-enterprise market, having an integrated single suite capable of providing all the required functionality with a consumer-grade learning experience is crucial.

However, with the fastest growth being in smaller enterprise and mid-market, the need for ease of deployment and time to value is critical too. Smaller organisations have few (or even only part-time) L&D people, let alone IT resources to support learning systems. The need for simplicity also extends to the increasingly popular customer and partner education market, often not serviced by L&D at all, but other parts of the business.

AI is hot, but not everyone is rushing to adopt

Whilst AI has been around in learning systems in various guises for many years, the advent of generative AI has resulted in a massive spike in interest from both buyers and vendors. For many vendors, AI is now leading their marketing as well as their roadmap. But two-thirds of corporate leaders in our latest Digital Learning Realities research still feel their learning systems do not meet their expectations for AI.

New Fosway AI research is assessing the real maturity and readiness of both the buyer and the vendor to invest in AI. And although the first report is not until Q2 2025, it’s already obvious there are huge opportunities to automate and deeply personalise key processes for all learning personas – learners, managers, trainers, and administrators. But whilst many corporates are curious, they are not rushing to adopt AI. Along with the universal concerns about ethics, trust and the security of AI, many buyers are still waiting for compelling reasons to use it.

Buyers express concerns that there is no need for more content (they have libraries full of content already) or that, when using generative AI for content creation, the output is too text heavy. The governance of AI solutions is only likely to increase too. And in these cautious times, some vendors are downplaying their AI messaging as well to not discourage potential buyers or trigger compliance risks too.

This is an excerpt from the Fosway 9-Grid™ for Learning Systems. Get the full insight and discover all the latest market and solution trends by reading the whole report here.

What should you do next?

• Sign up to be part of Digital Learning Realities 2025 – ignore the hype and be part of the reality of modern digital learning. Share your experiences in this year’s research cycle here.
• How will AI affect the next generation of learning systems? Take part in Fosway’s strategic AI project for 2025: ‘AI in Learning’.

Other recommended reading

• Browse everything related to Learning Systems in the Fosway Group Knowledge Centre. Find out more here.
• The 2024 Fosway 9-Grid^TM for Digital Learning– full report. While you wait for this year’s look at the market and solution trends in learning content providers – have a read through last year’s report.
• Buying a learning system? We can help.

For corporates looking for deeper insight on this and other similar topics, please consider joining our Fosway research network to get access to corporate roundtables, private 1-1 analyst time, benchmark reports and other analyst services or project support. Click here to find out more.

Please also visit the Fosway Knowledge Centre to check out other relevant Fosway research and insights, including filters for segment category, key topics, type of content and vendor-specific information.