1Mby1M Deal Radar 2011: Latitude Learning, Saline, Michigan

Latitude Learning is an open source, performance-driven software as a service (SaaS) learning management system (LMS) designed to assist training firms, middle-market companies, Fortune 1000 enterprises, and non-profit organizations. 

CEO Jeff Walter has over twenty years of experience building and planning e-business applications for customers in various industries. Prior to founding Latitude, Walter worked for Commerce One, AppNet, and AMS, growing consulting, software, and business process outsourcing practices. He saw an opportunity to present more effective training and education less expensively than large companies were offering.

Bersin & Associates reported in 2009 that LMSs represent an $860 million market, made up of more than 60 different providers. Approximately 40% of U.S. training organizations reported that they have an LMS installed. The small business market offers the greatest opportunity for growth, as only 36% of these companies are using an LMS. According to a 2009 report by American Society for Training and Development (ASTD), 91% of ASTD respondents are using LMSs in their organizations, with one-fifth opting to go with a hosted platform.

More than ten years ago, Latitude Learning developed custom LMSs for Fortune 500 companies such as automotive OEMs. After developing several such LMSs, the company decided to develop and package a core, open-source product that could be easily adopted by any company yet have all of the functionality that the custom applications possessed. The current model has evolved into a software as a service (SaaS)/cloud, client-driven application that is customer agnostic.

Latitude Learning’s multilingual solution includes more than 75 e-learning courses in a variety of topics – Ace Your Job Interview, Be Your Own Manager, Building Customer Loyalty, Conflict Management, and others in areas of study ranging from business math to entrepreneurship to project management. The certification engine helps clients to create curricula and manage the completion of requirements. Custom branding, customer Web parts, and technical support are also available. The solution runs on a management platform with features for training planning, reporting, assessment tools, webinar management, wikis and other content management, and APIs for human resources staff.

Latitude Learning is launching a Forever Free LMS for the first 100 users of any organization. After reaching that threshold, users are provided options for paying for the LMS portal. The client pays only for how much the clients actually access the LMS portal. There are two access fee options:
1) Pay per active user or per course registration ($2-$5) – this is often the preferred alternative for in-house training departments.
2) Clients have their own instance of the open-source application. This option allows them to set up as many users as desired and includes a free license, but there are costs for the initial set-up/customization and support services, which are variable and based on the amount of work necessary for the project.

Latitude Learning currently host several implementations with more than 500,000 users and one with more than 1 million users in the database. The company says that performance testing indicates it is able to support more than 100,000 concurrent users at any time.

Walter describes the e-learning industry as having a “formidable list” of competitors, including Learn.com, which was just acquired by Taleo; Saba, which is focusing in solutions that can help companies manage unstructured learning; Plateau, named in Gartner’s 2009 Magic Quadrant for corporate learning systems; Desire2Learn, focusing on educational institutions; and Blackboard Learning System, which also has a strong education industry component.

Clients include Chrysler, which uses Latitude to establish more consistent dealer certification training among its more than 6,000 dealerships; the American Board of Emergency Medicine, to manage its online continuing certification program; and Administaff, which wanted a less bulky LMS than the one it had, and greater automation.

Latitude is a largely self-financed, bootstrapped business. It was initially a management buyout during the dot-com bust and financed by Commerce One. Management aims to run a lean organization, and Latitude used innovative financing to purchase additional firms. The company is profitable, and revenues are $5 million–$10 million. Latitude is not seeking financing at this time, but it would entertain strategic equity or non-equity investors that could help it improve and increase product distribution, expand sales opportunities, and open new distribution channels.

The company’s growth strategy is to focus on its target niche – enterprises with large sales and service organizations; build a network of resellers to magnify its reach in the marketplace; and give away access to its LMS to convert skeptical prospects of the effectiveness its product as a well–designed application that benefits their company at a low cost.

In the 1M/1M Deal Radar series, we celebrate entrepreneurs who have reached at least $1 million in annual revenue. It is part of the One Million by One Million (1M/1M) global initiative.

Recommended Reading
The 1M/1M Incubation Radar: SurgeForth
Deal Radar 2010: Greytip

This segment is a part in the series : 1Mby1M Deal Radar 2011