As the world's biggest companies strive to build on the intellectual capital held within their workforces, the value of the corporate e-learning market is set to rise dramatically over the next few years.

According to IDC, the technology and e-business consultants, the global e-learning corporate market will exceed $23bn by 2004 - up from $1.7bn in 1999 - and rising at a startling compound rate of nearly 70 per cent a year.

Executives will be offered increasingly flexible courses of lifelong learning within their own companies as the estimated 2,000 corporate universities expand towards some 3,700 at the end of the decade.

Academic universities - hard-pressed for cash and fired by the chance to enter the overall $50bn so-called webucation market - will also begin offering lifelong learning opportunities - particularly to executives.

The external provider market for e-learning to companies was first opened up by traditional instructor-led trainers (ILT), offering IT training, using online methods to provide courses to clients.

But that model is now changing, with the big suppliers diversifying or finding partners to offer a wider curriculum. Niche e-learning companies are also appearing in markets such as financial services, languages, and telecoms.

"E-learning is changing the way corporations organise and manage training, particularly in North America and Europe," says Sheila McGovern, senior research analyst at IDC.

In the past, IT was delivered separately from other skills. Now non-IT topics, such as finance, management, employee orientation, and product information are being delivered through a common system.

However, IT still accounts for 71 per cent of the market, according to IDC. By 2003, the global picture should be an even split between IT and non-IT. Inside companies, these changes mean that managers of human resource departments - and chief executives - are often the purchasers of the new systems rather than departmental heads or IT managers.

Most of the big global suppliers are US based, including SmartForce, Click2Learn, DigitalThink, Global Knowledge Network, NETg, and Saba. IT industry training vendors are also driving the market, including IBM, Oracle, and HP. Pearson, which owns the Financial Times, is also active in this sector, via FT Knowledge, its business and management education division. Last year FT Knowledge bought Forum, a leading US corporate training company, for $90m.

As corporate leaders try to leverage the value of their workers' ability to learn on the job - and reskill for new ones - the internet provides a new tool, not just a faster or less costly way of delivering the old training programmes. "If you consider the traditional classroom approaches used in the business world, then it could be argued that very little stays with the person, for any length of time," says Steve Harvey, HR and finance director for Microsoft.

E-learning - particularly so-called asynchronous or self-paced learning - offers companies a way of delivering training in a very flexible way.

"It helps companies rethink the best way to assess, source, deliver, evaluate, and manage the development of their staff at all levels, making the process easier, faster and more effective," says Jane Carr, for Skillvest.

Along with many entrants to the market, Skillvest seeks to work with companies to ensure training adds to companies' ability to meet long-term objectives.

"The real money is in saying to a chief executive 'this is about meeting your business objectives'. If it does not make money, why are they doing it?" says Ken McNaught, for NIIT Europe.

"A client of ours, a major international telecoms company, saved £1.3m on a course for one product launch by using e-learning," says Steve Dineen, chief executive and founder of Fuel, an e-learning provider. "The course, which involved substantial spending on equipment, would have cost £1.4m. Using e-learning and the creation of 'virtual' versions of the equipment, it cost just £100,000."

The biggest suppliers now offer strategies to corporate clients which may include several forms of delivering training and education - not just online content.

"It is important to consider how e-learning supports or replaces other forms of learning," says David Baty, for PricewaterhouseCoopers, the Big Five accounting and advisory firm.

He says e-learning is well suited to deliver "know what" and "know how", or skills-based learning, while face-to-face training is better at teaching staff softer skills and developing corporate values.

The shape of the new market is, however, confused, both geographically and in terms of content, and there are a series of hurdles still standing in the way of a fully integrated e-learning industry. Language is a big barrier, but technological advances may make expansion possible. Cathay Pacific Airways, for example, is using a system called EKP - supplied by NetDimensions - to train 14,000 employees. The system can handle double-byte character set languages, such as Chinese and Japanese, as well as western languages such as English and French.

The e-learning market has grown from the US. "North America presents the largest potential and it will continue to account for close to two-thirds of the market over the period," says Ms McGovern. But by 2004, Western Europe will be a much closer second - growing at a phenomenal 96 per cent a year. Spain will be a hard-fought market as it is seen as offering access to Latin America. Japan will fall into global third place.

Each market provides a challenge for the bigger suppliers. Canada is a good example, with its dual language culture and the dominance of the mid-sized business providing resistance to one-size-fits-all products from global players. But Canada's language problems look insignificant to those in the Asia-Pacific region. Here, Australia is set to account for half the region's e-learning market by 2004. Progress elsewhere could be slow.

Another problem is the growing demand from companies for e-learning programmes which come with full service back-up, including online live technical support and, increasingly, tutorial and mentor services.

"Its all about creating the community aspects you take for granted in the classroom," says Mr McNaught. "It's about support-mentoring, web help-desks, expert answers, and 'pushing and pulling' the learner."

Corporate customers may look to other portals and suppliers for e-learning products. In the UK, for example, the government has set up the University for Industry. Through its learndirect High Street brand it is seeking to become as ubiquitous as the Post Office. It offers learning units covering a wide range of skills but is also signing contracts with corporates. These include British Telecom, Sainsbury, the Royal Air Force, The Army, and the Trades Union Congress. And the government has just announced plans for a University for the National Health Service.

"A key benefit for smaller organisations is that they can provide their staff with training on tap, that can be picked up and put down to suit their time constraints," says the university. The services it offers highlight a key concern for companies - especially smaller ones. Training to meet individual needs may not fit corporate plans. Small- and medium-sized enterprises (SMEs) often complain that trained employees simply move on \ 2 6 0 a concern that is being partly met by UK government plans to introduce "portable" training courses.

Another potentially important supplier in the corporate market are universities - many of the the larger ones with international reputations are involved in the early stages of constructing virtual online colleges. These are likely to provide academic courses which may attract companies interested in developing staff and promoting lifelong learning.

Universitas 21, a network of universities, has announced a partnership with Thomson, the Canadian electronic publishing group, to set up a global online university. The colleges involved have a combined operating budget of $10bn.

Oxford University has linked up with Princeton, Stanford and Yale to set up an elite virtual college providing internet courses for half a million alumni - many of whom hold seats on the boards of the world's leading companies.

For companies, the next decade will see a rapidly expanding market in e-learning. The only cloud in the sky is the possibility that some ventures will provide the dotcom disasters of the future.