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Visigoths at the LMS Gates

In an excellent post several months ago, Michael Feldstein accurately stated that the common perception of the LMS market as Moodle vs. Blackboard is misleading.

But the narratives around exactly what’s happening tend to be off. Typically, I hear the frame as being a contest between Blackboard and “open source.” Has “open source” (by which we mean Moodle and Sakai, the two open source LMSs with significant market share in the United States) made inroads into the market?  If you read what the majority of sell-side financial analysts1 are writing, you may see the claim that “open source” is not putting a major dent in Blackboard. If you talk to Moodle or Sakai advocates, you might hear that they are crushing the company in sales. Neither account is really capturing what’s happening in the market . . .

Michael is right and you should read the whole post and its second part, but I have a different opinion on the conclusions.  I agree with the conclusions that…

by 2014 we may see it beginning to change the whole picture for educational technology infrastructure in some fundamental ways. Buckle up, folks. It’s going to be an interesting ride.,

but I am less inclined to rely on straight-line projections of market data to look ahead, and am more inclined to think the market changes we are seeing are driven by outside forces with potentially nonlinear effects. Rome may have been weakened from within, but when real change happened, the Visigoths made it happen.

This week the big news is the potential acquisition of Blackboard, which I mentioned in yesterday’s post. This move from an unknown party helps to clarify my point. As we have been telling our clients privately and the community publicly, the LMS market of tomorrow, say ~2 years from now, will not look like the market of today, and the current vendors are not the biggest driving forces of change.

For a decade now, since the inception of a real LMS market in higher education, the market has been characterized as a handful of players (no more than 5 – 10 of real market significance) often reacting to the acquisitions of Blackboard. Most investments were used to purchase competitors and complementary tools – internal maneuvering by the same players. The rise of open source as a viable alternative around 2006 was a significant change, but the dynamics continued.

Today, there is a flood of new money into the educational technology market. In addition to the potential acquisition of Blackboard, Instructure just raised $8M in venture funding and vying for the role of Alaric in their marketing position, Pearson has been heavily investing in Learning Studio (eCollege for you old-timers), and Moodlerooms raised $7+M in venture funding. Publishing companies, ERP vendors, private equity, venture funding – these are major disruptive forces. And there is still significant moves being made by technology companies such as Google.

Whatever happens with the potential acquisition of Blackboard, expect to see a different market emerge, with new dynamics. For higher education institutions – is your academic technology strategy ready to handle the changes in the market?