First it was just called "multimedia services", then, when "e"-everything became stylish, it became "e-learning". Whichever you prefer when talking about educational CD-Roms, DVD-Roms, or the Web, it was supposed to be very, very big in the Republic, writes Karlin Lillington

At the height of the dotcom boom, the Government and research institutions produced reports identifying e-learning as a promising areas of technology development for the State.

A frontrunner was CBT, the forerunner to Smartforce (now Skillsoft) and its fast-growing compatriot, Riverdeep.Then came the dotcom implosion and the hype over e-learning faded.

Or did it? Enterprise Ireland Boston vice-president Ms Renee Finn, who led an e-learning panel and networking forum last week in Dublin that brought together big US clients and Irish companies, says absolutely not.

"Fifty-eight per cent of all \ software exports are in the e-learning sector. It's a priority sector for us. We have a niche industry here, and it's actually growing." E-learning is not just growing, but is the fastest-growing sector of Irish-owned software industry, she says. Last year, the sector had total sales of €1.67 billion, up a third on the previous year, and exports of more than €800 million, marking annual growth of 46 per cent. The US is the single biggest market for Irish e-learning companies, generating sales of €350 million last year.

So, despite the downturn in the IT industry and cutbacks in US corporate spending, the US market for Irish e-learning companies actually expanded by 56 per cent - easily the biggest sales increase by an Irish sector in the US market, says Ms Finn. She notes that this reflects the continued rapid expansion of the whole e-learning sector in the United States, forecast to increase from $3 billion (€3.04 billlion) in 2002 to $18 billion in 2005, according to IT analyst IDC Research.

That's why Enterprise Ireland decided to bring Americans over to the Republic, in a format that would allow small Irish companies to ask a panel of mostly US buyer companies about how they select supplier companies, what they look for and whether there's really any opportunity at all for a company that employs, say, five people, such as Waterford-based Multimedia Instruction.

Director Mr Frank McNamee was encouraged by what he heard. Panelist Mr Harold White, organisation development consultant with Arch Chemical in Tennessee, said a familiarity with a potential client was more important than size: "You don't have to be big, you just have to have the ability to know someone and reach out and offer something."

Mr McNamee was at the event mostly to network and look for strategic alliances, he said, to talk not just to US companies but also to other Irish companies. Some are competitors, but also some, such as Cork-based Leading Edge Group, are consultants and larger brokers of e-learning services to big clients, looking for developers of products and services.

Mr Joe Aherne, director of Leading Edge, said he was interested in networking but also in learning more about the legal environment in the US.

Despite the growth statistics touted by Enterprise Ireland, both Mr McNamee and Mr Aherne expressed a mix of concern about the state of the e-learning industry, and disappointment that its initial promise has not been realised in the way many had hoped.

"The biggest disappointment has been the change in the market," said Mr McNamee, who says his company would have normally expected repeat business from some of their contracts. "A lot of large companies recognise the value of e-learning but aren't ready to spend." Still, he noted, the long-term trend was for an upturn, which should release some pent-up demand for e-learning products.

Mr Aherne sees "a major rationalisation of e-learning companies" in the coming months. Many Irish companies have folded or been bought out already, he said - even giant CBT/Smartforce has not been immune, having merged with Skillsoft and lost its name in the process.

Mr Kevin Stevens, senior director of content planning at Skillsoft and a panel member, acknowledged the changes his company and the industry as a whole has seen. "I think the merger of Smartforce and Skillsoft is part of the inherent state of the industry. We'd been hearing from our customers the need to consolidate; the need to concentrate on content and stop thinking of ourselves as a one-stop shop," he said.

"I think a number of players, including us, stepped into that space a little too early."

The focus is now shifting from producing lots of products to listening to what customers want, said Mr Brian Hackett, managing director of American firm the Corporate Leadership network, a consultancy and broker for e-learning products.

"You're seeing businesses moving from being product-centric to more customer-centric and now, to more network-centric as well," he said. "It's really about not just make and sell, but sense and respond."

Mr Hackett said that the Republic had a significant profile internationally in the e-learning sector. That's good news for Mr McNamee and Mr Aherne.