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What am I not seeing?

It’s old news that Blackboard has been acquired by a private equity firm for $1.64 billion.

An education company being acquired is hardly novel – we are entering a period of dramatic change in education and the change will largely be led from outside of the education system.

$1.64 billion – that is novel.

Why is Blackboard worth that much? If you speak with academics and students, the product and company is almost universally disliked. This largely stems from their D2L lawsuit a few years ago and the concerns that generated around patents in the educational technology market.

Providence Equity must have been aware of this end user negativity before they purchased Blackboard. Which means they are seeing the investment from a perspective that I don’t recognize. And it has been bothering me.

Providence has three areas where it can generate value for its Bb purchase:

1. Integration of tools as a competitive advantage: The LMS market requires integrated tools – as I detailed here – in order to add value in what is a Moodle-dominated LMS market (globally).

2. Integration of existing companies within the Providence investment portfolio to leverage advantage from Bb. Have a look at their education-dominated investments. None of these companies seem to target end users. They are generally listed as:
- Technology-based learning solutions focused on student training and testing results in healthcare and other vocational fields.
- subscription-based online education products.
- or vaguely, the largest independent education company in Sweden
- leading provider of technology solutions and services to the K-12 education market.
- leading provider of private post-secondary education in North America.
- leading provider of technology-oriented post-secondary education in the U.S.
- leading provider of university access and preparation programs and English language courses to international students, as well as a provider of vocational courses mainly to Australian students.
(at this point, you talk to your PR people and say “hey, look, you’ve used your quota of the words “leading provider” on our website – can you hit a thesaurus please?”)
- global leader in integrated software and processing solutions and is a leading provider of information availability services.

3. Content-centric value that fosters an educational ecosystem with Bb at the centre – such as recently announced partnerships with educational publishers. Before long, Bb will deliver courses and assessment in their entirety to the cash-strapped education sector. Plug and play faculty. Offering degrees, as Pearson is doing in UK, is a logical step – even if only done in partnership with existing universities.

Blackboard’s strategy, as detailed above, focuses on product integration, full-spectrum education (content provision to testing), targeting the needs and concerns of senior-level decision makers (management focus), and fostering ecosystems where other companies enhance Bb’s centrality by providing content and related services in the Bb platform.

Bb is not focused on learning and teaching in their strategy, though I’m sure their language to faculty will include teaching language. Where words can misrepresent focus, investment history presents a clear reality: the focus is on shaping the education field and targeting leaders and decision makers within the field.

And, if you’re an entrepreneur trying to make a profit by offering a service to a troubled sector, Providence Equity has taken the right approach. In the US and UK in particular, higher education is at the early stages of a massive shift from public ownership to private ownership and entrepreneurial solutions. As the funds flow to innovators – or in Bb’s case, value hubs – tremendous wealth will be created for the risk-takers. In language and ideology that I’ve heard in numerous discussions over the past five years “education is the last industry to globalize”. Providence is one of the early companies out of the gate. Pearson, U of Phoenix, Capella, Laurette, and others are marching in a similar direction.


  1. One word: data. Access to student data. Tracking learning outcomes and assessment. I think all your points are in there, too, but Google and Facebook both monetize data. I don’t see why Bb wouldn’t also.

    Thursday, July 14, 2011 at 6:38 am | Permalink
  2. Just a hunch, but could Providence Equity see any profit in leveraging the wealth of personal information they will gather on Bb users, mostly highly educated people? Or maybe I’m just paranoid about how corporations deal with personal data.

    Thursday, July 14, 2011 at 7:04 am | Permalink
  3. Chris Beks wrote:

    I think you’re right on with your points above. Blackboard isn’t nearly as badly positioned as some reports make it out to be. Those working with their product, like myself, know that it has gotten a huge improvement in the past year, with more added value and partnerships than ever before. Which all brings it to the integration you talk about. Blackboard is becoming the glue that bring together the “old” LMS tools, the newer “Web 2.0″ tools, and now the publishers as well. Combine that with very good, and further developing integration of SIS, and the only thing that is holding Blackboard back is (and has been) their price.

    Friday, July 15, 2011 at 1:18 pm | Permalink
  4. John wrote:

    With more capital investment, Bb first needs to work. Too often, it doesn’t (e.g., just changing formatting in discussions and assignment is an exercise in futility). If Bb cannot get the simple things right, who cares about more tangential features?

    Saturday, July 16, 2011 at 3:54 pm | Permalink
  5. C. D. wrote:

    Wide user dislike doesn’t matter when the decision is really made by university administrators and executives. Since the latest version of BlackBoard Learn meets most enterprise LMS feature checklists, adoption ends up driven by status quo, change avoidance and accounting reports.

    Sunday, July 17, 2011 at 9:19 pm | Permalink
  6. Jim wrote:

    I wonder whether Blackboard is truly “almost universally disliked.” I agree that is the perception, and I believe it is true among those most likely to have and voice an informed opinion. But among the rank and file, at least at my university, it is simply accepted as a part of the infrastructure for teaching and learning. The most common feedback we get (by far) is that students wish faculty would use it more, and faculty want to use it more effectively. Not criticism of the product or company. I suspect this is true in most institutions of higher ed where there hasn’t been some sort of widespread negative publicity about Bb due to a system failure or pricing struggle.

    In this sense I think of Blackboard kind of like Microsoft has been in the past – a target of criticism by those in the know, but for the average user, just a fact of life. And I would expect that Blackboard, like Microsoft, will lose a bit of its dominance over time, but will continue in many places to be just an uncritically-accepted cog in the machine. But I’m not sure how well Microsoft has done at leveraging their past dominance into an MS-centered integrated ecosystem, and I am not convinced Bb will be able to succeed on that path, either.

    Monday, July 18, 2011 at 8:23 am | Permalink
  7. Jenni wrote:

    No University in the current litigious, student right to privacy environment would ever allow its Learning Management System parent company to collect live student data. Not ever.

    Wednesday, July 20, 2011 at 1:14 pm | Permalink