Centra Software, Inc. is one of the world's leading suppliers of what is known as e-Learning software. This is a fast-growing category.
Wall Street's opinion about electronic education is that the sector has at least progressed from a concept to a competitive industry, with companies vying for market shareà(But) E-learning remains a fledgling sector composed of dozens of start-ups each with its own twist on delivery and content (Eklund, 2001, p. 1).
The category is now an annual $3.5 billion dollar business, and "forecasts growth to more than $25 billion in 2003. That figure represents huge potential, but equally high optimism" (Eklund, 2001, p. 1).
Centra went public in early 2000. While it will have a loss of about $2.2 million in the current quarter, this is below analysts' expectations. The majority of the loss comes due to high start-up and R & D costs (Centra Home Page). FY 1999 revenues were $8.6 million, FY 2000, $18.8 million, and FY 2001 is targeted to reach some $40 million.
E-Learning stocks skidded in the latter half of 2000, in tandem with the overall slide in the market. In the last six months, content leadersà.have experienced, as a group, a 33.6 percent decline in stock value, just ahead of the 29 percent drop in the Nasdaq (Eklund, 2001, p. 1). This does not reflect lack of customer or shareholder confidence, but the realities of very high start-up and R & D costs.
Customers are companies who depend on continually upgrading the performance of their employees. "For instance, a 1999 benchmarking study by the American Society for Training and Development (ASTD) shows a direct relationship between company performance and the amount of money spent on training employees" (Fields, 2001, p. 1).
Among Centra's customers is Nortel Networks. "Nortel Networks uses Centra products to train and communicate with 40,000 employees and customers, significantly reducing the time and costs associ...