Thriving CBT keeps up training as sector becomes more competitive

For years, they've been quietly successful, but things are beginning to get a little more lively for the chief executive of Irish company CBT Systems, Mr James Buckley.

Computer-based training the general term for training offered in computerised form, from which the company derives its name has not exactly been the most glamourous of technology topics in the past.

But in the technology world, there is nothing more attractive than money.

In recent months the Wall Street Journal has pursued CBT, as has the US business magazine Barron's, which featured the training industry in a cover story. Perhaps part of the interest in the US comes from the high-profile entry into this field of former king of the junk bond dealers, Mr Michael Milken (after serving a jail sentence for trading offences, he's been buying up training companies to add to his Knowledge Universe company, in partnership with Oracle Corporation chief executive, Mr Larry Ellison).

The spectacular performance of CBT, in particular, has also been a prime attention-getter nothing focuses Silicon Valley minds like a stock price on an endless upward trajectory and fat dividends. CBT, the first Irish company to be listed on the tech-heavy Nasdaq, has never looked back since shares debuted in single figures. Now they hover around the $50 (£35) mark.

Mr Buckley is an expansive, garrulous man well-liked in the Silicon Valley technology community where he was a vice-president of computer manufacturer Apple Corporation in the Spindler and Amelio years. He went down in Apple developer history when he accidently gunned a HarleyDavidson motorcycle off the stage and into the front row of the audience during the opening festivities of a developer's conference and still made his introductory speech.

As CBT turned in yet another record quarter two weeks ago revenue up 51 per cent on the same quarter last year, and net income up 70 per cent it's clear he's a man with a strong hand on the throttle.

Mr Buckley, who stepped into former chief executive and CBT founder Mr Bill McCabe's shoes 20 months ago, stopped in Dublin this week after spending several days in Galway on a CBT employee weekend away (McCabe is now chairman of CBT and involved in setting up yet another computer-based training company, Knowledge Well in Limerick).

According to Mr Buckley, the higher media profile of computer-based training is due to the influx of new players as they sense opportunity, and the endless IT-industry hunger for new employees: "The competition has heated up in this business. It's a very sexy area right now," he says. "It's really driven by the shortage of IT professionals; it's really become a very visible problem. Everyone's talking about it and then saying, how are we going to train these people?"

Some people are taking it upon themselves to get the training, which has spurred a drive within CBT to offer courses directly to individual end-users through a number of channels, a change from CBT's former focus on the corporate market.

In order to reach those customers, CBT has made a number of acquisitions during the past year. To target end-users, the company snapped up ForeFront, a telesales company with a European telecentre in Dublin. Until then, CBT had relied on 55 telesales staff in its California headquarters to go after corporate contracts. Now, CBT will place an enlarged telesales force in new offices it is building in Arizona, bringing its total telesales group to more than 200.

CBT's other key acquisition was Scholars.com, a highly-successful, Web-based training company in Canada which offers a moneyback guarantee that students will successfully complete its software company-authorised certification courses.

Students correspond directly with Scholars.com as they work through a course, and have access to a tutor, online class chatrooms, and 24-hour, seven-days-a-week advice.

Aggressive moves into new markets in Europe, Japan and South America reflect Mr Buckley's goal of actively seeking out new customers globally industry analyst International Data Corporation expects the worldwide training market to grow to $28 billion by 2001.

"When we ended 1997 our business was 70 per cent based in the United States and 30 per cent based outside of the US; when we went into the year it was 80-20," says Mr Buckley, who adds that he would like it to be 65-35 by year's end.

Most outside business comes from Europe, some two-thirds of the total non-US business.

Other new areas for CBT are a concentrated move into the university market offering both coursework for students and instructors and for those who maintain the IT infrastructure of the university itself; a foray into offering Web-based training directly to customers, rather than setting up courses on customer servers, which drains bandwidth; and a set of partnerships with client companies and Web security companies like RSA and Checkpoint to offer companies a full course in keeping their e-commerce sites and intranets secure.

In a new approach for a training companies, CBT is also preparing coursework around a specific job, such as a system administrator, rather than around a given product, like Lotus Notes.

Structuring the courses has proven to be more challenging than CBT envisaged assessment companies hired to help them determine the range of IT job categories came up with 4,000. That's now been narrowed to a more manageable core of 25. "It's a pretty straightforward task, but its bigger than we thought," says Mr Buckley. "But our customers are asking for this."

With 500 of CBT's 800 employees based in its research and development headquarters in Dublin, Ireland still retains a central position despite the shift of corporate headquarters to California.

"It's our biggest concentration of people. It's where we have the most critical mass around the world," says Mr Buckley, who expects to continue hiring in Ireland as demand for products grow. (CBT apparently is already Federal Express's largest customer in Europe because it ships so many individual packages from Dublin.) Scattered across three sites Clonskeagh, Blackrock, and a shipment centre in Sandyford CBT will move to 60,000 square feet in a new Clonskeagh building in two months.

As more competitors move into the sector CBT helped to define, the company will face new challenges, especially against the kind of marketing pull Milken and Ellison can exert. But Mr Buckley feels that CBT will always have that critical technology company advantage first into the field.

"The strategic advantage I think we have is that we now have 625 courses; we'll have over 800 by the end of the year," he says.

"It took 14 years to build this. [A CBT product] is consistent, it has the same look and feel and interface. We have the partnerships with the software companies, and the content. No one else has the content. That's not to say that somebody else wouldn't or couldn't do it.