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What's Happening with Training Companies?

Florida-based GTS is an extreme example of what's happened in the broader computer training industry, but some CTECs have managed to remain in business with reputations intact.

The Florida-based Certified Technical Education Center GTS is an extreme example of what's happened in the broader computer training industry. Since the bottom fell out in the late 1990s, Microsoft CTECs and other training companies have hemorrhaged students, operating cash and profits. For many, the wounds never clotted.

Keep in mind that not all training schools are CTECs. A CTEC must be authorized by Microsoft, have at least two Microsoft Certified Trainers that teach there and nowhere else, and use the Microsoft Official Curriculum (MOC). A non-CTEC training school can still teach students on Microsoft technologies and to pass Microsoft certification tests, but can't use the MOC and can't identify itself as a Microsoft CTEC.

Also on this article:

Part 1: Outraged Ex-Employees of Training Company Allege Theft, Fraud

Part 2: A Pattern of Intentional Non-Payment

While there are no hard and fast figures available, those in the industry are well aware of the massive numbers of CTECs and training schools that have folded over the last several years:

  • Hyattsville, Maryland-based Unisoft School of Technology closed abruptly last Feb. 3 and left hundreds of students and teachers deep in debt.
  • In mid-October of last year, Xintra Computer College in Ottawa shut down, "leaving students out in the cold after having paid between $3,000 and $4,000 for courses," according to a local newspaper report.
  • One of the biggest and most well known CTECs of all, Computer Learning Center, based in Manassas, Virginia, closed the doors of all 25 schools nationwide in early 2001. About 10,000 students were left in the lurch when CLC went belly-up.

That's only a smattering of the closings nationwide, and it's undoubtedly not the end of the carnage. Has the bottom fallen out of the CTEC industry?

Not necessarily, says Hugh Whelchel, general sales manager for the mid-Atlantic region of Computer Education Services Corporation. CESC has 12 offices up and down the East Coast, and several hundred employees.

CESC has bucked the trend of CTECs, making money last year, and projected to be even more profitable in 2003, Whelchel said. CESC is doing well because it's mostly abandoned what he said is the outdated notion of individual certification training.

"We've been moving away from individual certification tracks and focusing more on corporate clients than individuals. [The previous CTEC] emphasis has been on the career-changer market. That market really doesn't exist any more," Whelchel said. CESC has partnered with different institutions, including Boston University, and corporations to broaden its range of offerings.

It's the same approach taken by Anaheim, California-based New Horizons, which says it has the largest CTEC network in the world. It has about 280 training centers in 51 different countries, according to Gene Longobardi, Senior Vice-President for Global Franchise Operations. Roughly 85 percent of those centers are CTECs.

New Horizons has been affected like most of the rest of the industry, losing money in both 2001 and 2002, Longobardi said. But he expects a turnaround this year and believes New Horizons will be back to profitability.

New Horizons didn't suffer as much as some other companies in the industry, because it's traditionally gone after the business market anyway, up to 80-85 percent, as compared to about 10 percent individual training, Longobardi said. But, like CESC, it's been branching out into more non-traditional IT offerings.

"We've started to move into business skills. Career-changers and IT pros need business skills to make them more effective and productive," Longobardi said. "We started with project management and [added] different business skills classes, like presentation skills, time-management and meeting management skills." Although it's early, Longobardi said New Horizons is encouraged by the response from clients.

What companies want these days, Whelchel commented, "is employees to have certain skill sets to help them do their jobs better. We customize the curriculum so that they can meet those skill sets. We ask them, 'What do you want your employees to do?' and tailor their training to those specifications," he said.

Whelchel sees several reasons why training companies have been struggling. Reason No. 1, he believes, is that they're "living in the past, putting way too much emphasis on certification and not on meeting the needs of corporate clients. I think the individual market has moved to community colleges and other colleges. There's not enough there to support all the training firms." He calls it the "butts in seats" CTEC business model: filling up classrooms with career-changers and individual title-pursuers.

The second reason, Whelchel said, is that so many companies rode the wave of certification in the mid- and late-1990s, when it appeared that anyone could start a training operation and rake in cash, and it didn't take savvy leaders to do it. "There's a real lack of leadership in industry, [and the CTEC market, especially] got completely saturated. Now we're seeing the fallout. The ways to make money in '97, '98 and '99 don't work now," Whelchel said.

A subtle silver lining has been the weeding out of the "paper" MCTs. "When things were red hot, we couldn't create instructors fast enough," Longobardi said, and it often didn't matter whether they had real-world experience. "With the last two years of belt-tightening, contract instructors [with strong IT backgrounds] are starving and coming back to our training centers" looking for full-time work. "The [quality] level of our instructors has risen dramatically over the last several years."

Despite the drastic shakeout, Whelchel feels confident about the future of CTECs. "The death of instructor-led training been has been well-documented, but I don't think it's going to happen. The type of people in our industry enjoy coming to class and being with their peers. There's a social dynamic there, a social element that will keep instructor-led training at the forefront of industry." Just not in the same form as the salad days of the last decade.

While people like Whelchel and Longobardi remain optimistic about CTECs and their chances for survival, others, especially those who feel burned by their experiences at GTS, are less enthusiastic. They echo the sentiment of MCT Charles Gardner, who said he's owed $6,700 by Eric Schaer and his company: "Sometimes you're the windshield, sometimes you're the bug."

Next: Finding the Right CTEC

About the Author

Keith Ward is the editor in chief of Virtualization & Cloud Review. Follow him on Twitter @VirtReviewKeith.

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