InformationWeek

The five-year deal calls for DigitalThink to work with the EDS Web Universities & Training service, developing client projects such as business E-learning portals that provide registration, content delivery, and information tracking for online programs ranging from IT education to sales training. EDS has agreed to provide DigitalThink with at least $100 million in revenue from the E-learning systems and services it sells and to purchase $50 million of DigitalThink products for its own use. The deal should increase DigitalThink's share of the E-learning market, which IDC forecasts at $2.2 billion this year. With $10.8 million in annual revenue last year, DigitalThink is a small player compared with market leader SmartForce, with $198 million in revenue.

In March, DigitalThink teamed with KPMG Consulting LLC to offer E-learning content and services.

By using the expertise of systems integrators, E-learning vendors can provide businesses with company-wide implementations. E-learning typically has been used on a departmental basis, says Ian Morton, an analyst with Chase H&Q. Morton notes that other emerging markets have blossomed via systems-integrator alliances. "Having the mindshare with the systems integrators will be the deciding factor that determines who wins and loses in this category," he says.

Some analysts say that due to EDS's market recognition, the deal marks a seminal event for the E-learning industry. "They say that a rising tide lifts all boats," says Fred McCrea, research analyst for Thomas Weisel Partners LLC.

The development of E-learning portals is expected to make up two-thirds of EDS's workplace training business within a few years, says