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A More Sustainable Business Model for MOOCs

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Tue Nov 04 2014

A More Sustainable Business Model for MOOCs
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MOOCs, with their promise to make world-class education more accessible, have attracted millions of users to free online courses on just about any topic under the sun—from artificial intelligence to game design to the history of jazz.

Free education is a worthy goal, but the disappointing reality is that few users actually finish the classes—and once they drop out, so does any chance of them paying for certificates of completion, one of the common schemes for procuring a little funding.

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In need of a bigger cash cow, MOOC providers like Udemy, edX, and Coursera are beginning to create and market corporate training programs. For a fee, companies can access online courses or develop their own, tailoring them to their needs. “MOOC providers are looking to shear off a small slice of a corporate training market that tops $70 billion in the U.S. alone,” wrote Melissa Jones for The Wall Street Journal, citing research from Bersin by Deloitte. According to this research, just 8 percent of companies use MOOCs regularly for training, but 44 percent of companies are experimenting with them.

MOOCs have a lot to offer companies looking for better training and professional development opportunities for their employees. "Corporate training, in the past, has been a bit of a backwater in terms of innovation," says Dennis Yang, CEO of Udemy. Stodgy, unrealistic e-learning and costly off-site training may have met their match in MOOCs, which offer less expensive, more scalable, more convenient learning.

In March, edX launched a pilot course on big data, for which about 3,500 people from more than 2,000 organizations enrolled. It grossed nearly $1.75 million. Udemy for Business launched late last year and now has more than 350 corporate customers, including Oracle Corp. and 1-800-Flowers.com. Organizations can license Udemy’s content for $29 per user per month, or pay $15 per user to develop customized courses on the Udemy platform.

Datalogix rolls a Udemy class into its existing training program on data. "The right recipe is going to be a blend of the infrastructure we have in place and leveraging the stuff that they have," says Datalogix President Eric Roza. Coursera’s new customer, Bank of New York Mellon, plans to train its new employees using Coursera’s courses on finance.

With the growing corporate interest in MOOCs, it will be interesting to see how these innovative companies fare as they move into this competitive market.

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