Since Blackboard announced its acquisition of several Moodle partners, numerous voices have chimed in to explore what it means to education. In particular, Michael Fieldstein (as usual) has a wide ranging and thoughtful response: What the heck happened? and Phil Hill captures the tone/responses from major players.
A common response to the longterm impact of these acquisitions has been to link Blackboard’s manoeuvre with the IBM’s transformation into a services company. This comparison is particularly silly because IBM was heavily invested in a hardware field that was being commoditized, whereas Blackboard is a software company (i.e. Microsoft). And the LMS is not being commoditized – it’s being integrated with new value adds including curriculum, eportfolios, analytics, learner relationship management, advising, mobile, etc. The IBM model of transformation may be a goal of Blackboard, but the demand side of the equation does not yet exist for Bb. Michael Fieldstein quotes Ray Henderson as saying “50% of the company’s revenues are now from sources other than LMS licensing, “and it’s going to get larger.””. My first thought is that it’s likely not revenue growth in new offerings that drives that number, but a collapse in LMS licensing.
Blackboard has a history of not knowing what it is. Or the type of market in which it operates. Signal Hill’s Trace Urdan, in an investment report, stated that Bb is “a shark in waters that aren’t used to seeing sharks” (i.e. higher education market). (OT: Trace is hands down the best investment strategist/advisor in edtech. He used to do a monthly newsletter, but that appears to have been discontinued. I’ve tried a few times to connect with him to deliver a presentation on his work and how he sees the higher ed tech market, but no luck).
Blackboard’s legal moves rank as one of the most significant missteps that I’ve seen by an education company. The name Bb evokes almost unanimous snickers/vitriol/disgust, largely based on their patent lawsuits. Bb is the most hated company in education (I briefly tackled their reputation here). A few folks that I respect greatly have recently softened in their disdain for Bb and are willing to give them a chance. I personally have never had a hugely negative or positive view of Bb. Their move to synchronous tools, their tactics of buying competing company to eliminate competition (Elluminate and Wimba), acquisitions of iStrategy, etc., are sound business strategies. (Disclaimer: They have been generous in allowing us to continue using their Collaborate tool (formerly Elluminate) for open online courses).
Back to the main point: Bb has identity issues. They badly misjudged the reaction of the education community to their patents suits. They were no longer content to be an LMS provider and broadened their product line (good idea – Elluminate/iStrategy). Now they have decided to become a service layer for education (i.e. consultancy of sorts – PwC/Deloitte).
What confuses me is that I’m confused.
I don’t know where Bb is going and what target they are pursuing in the education space. Private companies have the benefit of not revealing their plays. Bb is at a precarious point and is making a significant gamble: they don’t want to be an LMS provider, they want to a services company. The problem, of course, is that higher education has not yet signaled, broadly, that they need or want this. From my discussions with university presidents and senior admin, their most significant concerns rest around content, reputation, curriculum, international partnerships, etc. Does Bb want to play a consultancy role of this type? If so, they need to really ramp up their capacity, especially since universities like to do knowledge-type things themselves.
Ok, let’s leave Bb.
What’s left in the LMS space? I see two primary companies: Desire2Learn and (based on momentum) Instructure. I’ve left out Moodle mainly because their deployments are smaller-scale. Instructure states “We rarely see Moodle or Sakai make it to the short list of any education institution.” With several university LMS selections that I’ve been involved with, Moodle is not a contender. Plus, purely anecdotally, Moodle has been tainted by their lovefest with Bb.
I’ve met John Baker (CEO) on several occasions and was a keynote at their annual conference in Memphis (disclaimer: Desire2Learn is a sponsor of the LAK11 and LAK12 conference) and have had numerous interactions with company over the past six years. There was a time – peak of Bb lawsuit – where both John and D2L seemed somewhat troubled (stressed?). Obviously their future was uncertain. As the lawsuit headaches cleared, D2L has been making tremendous progress. They’re poaching numerous Bb clients and succeeding in numerous systems-wide and state-level deployments. They’ve continued to flesh out their product line: eportfolios, design wizards, mobile, etc. They have a very loyal customer base. Instead of growing through acquisition (Bb’s model), D2L has grown through internal R&D which has produced an integrated product line with strong end-user satisfaction.
Last week, I visited D2L’s main offices in Kitchener as part of a possible research project in analytics. The mood or feel of the company can be described in one word: optimism. They are an organization that knows what/who they are (an LMS vendor) and have not wandered from their mission since they started. Apparently, they’ll be at about 500 employees by year end. Tony Bates states that LMS are here to stay and D2L’s success through being focused on that market supports his assertion.
Instructure is a new player in the LMS market with the “purpose of disrupting the Learning Management System (LMS) market by setting a new, open standard for education technology”. I don’t know their product well and they’re still a small company. It may be premature to lump them in with Bb and D2L. However, Instructure has a certain coolness factor.
They are Google to Microsoft (Bb, but I didn’t really have to spell that out, did I?): designed for the cloud, using openness as a lever, and VC-backed.
And they do the odd cool thing like giving DS106 $5000 to continue their work. (btw, Instructure, if you’re really in a mood for something new, why not work with Stephen Downes and me in building the technical platform for MOOCs? We have ideas, but need good programmers!).
The LMS space is a bit uncertain now, reflective of the education field as a whole. The change pressures are enormous: edtech startups, OERs, globalization, public divestment of educational support, new university models (Udacity, Minvera), and west to east and north to south capital and economic shifts.
Bb has embarked on a bold strategy, one that will essentially see it exit the LMS market. It’s risky. Very risky. Education may be ready for this type of player, but I haven’t seen it in my interactions with leaders and educators.
Desire2Learn and Instructure don’t generate the confusion in end users that Bb does today. D2L is clear: we are an LMS company and we offer value adds to this core product. Instructure has brashness on their side and as their creed: we’re cloud and open.
It will be an interesting few years for the LMS as the higher education market begins to acclimate to dramatic change pressures.