About the Class Technologies Acquisition of Blackboard Collaborate

Anthology, which acquired Blackboard in the fall, or more accurately whose private equity primary owner Veritas Capital acquired Blackboard and combined with Anthology in the fall, announced a new deal with Class Technologies. Class is the company founded and run by Blackboard co-founder and former CEO Michael Chasen that provides education-specific virtual classroom software on top of Zoom. From the announcement:

Class Technologies Inc., a leader in the synchronous virtual classroom space, and Anthology, a provider of education solutions that support the entire learner lifecycle, today announced they have signed a definitive agreement for Class to acquire Anthology’s Blackboard Collaborate virtual classroom tool.

Anthology’s Blackboard Collaborate is a leader in the synchronous virtual classroom space with deep integration into Blackboard Learn Ultra, serving over 10 million users across more than 1,300 institutions in over 75 countries worldwide. Class brings the classroom online by adding teaching and learning tools to the Zoom platform, which is used by hundreds of thousands of institutions and businesses globally. Together, Class and Blackboard Collaborate will serve over 1,750 institutions representing higher education, K-12 and corporate learning & development teams around the world.

The rationale provided is focus – Anthology to focus on the LMS, Class on synchronous virtual platforms.

This transaction will allow Anthology to focus more resources on accelerating innovation within its flagship learning management system, Blackboard Learn Ultra, and in other areas of the business where Anthology is uniquely positioned to support the global education community. [snip]

Class Technologies will continue full support for customers across Class for Zoom and Blackboard Collaborate. The companies will also partner to build a tight integration between Blackboard Learn and Class to promote student success. The future combination will bring the best of both products together:

* Class brings its expertise leveraging the scalability of Zoom and the extensibility of the Zoom SDK to build large, stable synchronous video experiences enriched by teaching and learning tools.

* Blackboard Collaborate brings an industry leading integration with Blackboard Learn and a large user base to help shape and guide future product development.

* With the addition of the Blackboard Collaborate team, Class will bring industry leading teams of educators and technologists together to build the next generation learning platform for hybrid, hyflex, and online learning.

Class will become the preferred virtual meeting technology partner to Blackboard.

I had a chance to interview both Michael Chasen and JD White, Chief Product Office of Anthology, to get further details.

History is Relevant

The Washington Business Journal gets their history wrong, or at least partially wrong, in their coverage “Michael Chasen helped launch Blackboard Collaborate. Now he wants to buy it back.” To understand this deal it helps to connect some historical dots. What actually happened is that Blackboard in 2010 acquired two virtual synchronous platform providers – Elluminate and Wimba – for a combined $116 million ($154 million in 2022 dollars). Blackboard then rebranded the combined entity (primarily Elluminate) as Collaborate. At the time, Elluminate and Wimba had a combined 240 employees and 2,600 clients. Today’s deal, reported to be for $210 million, will move roughly 60 Collaborate employees and 1,300 clients over to Class.

What Does Anthology Get?

Besides the reported $210 million, Anthology gets focus. Collaborate was never going to be a growth opportunity for Anthology, as Zoom and Microsoft Teams have passed it by. This is probably the best news from an Anthology and Blackboard perspective, as it shows that the new ownership and management are willing to make changes and not hold on to a platform that is mostly frustrating customers today.

Anthology can now focus much more on just the LMS, Blackboard Learn.

And yet . . . that does go against Blackboard’s strategy of providing a common data service based on shared platforms from the company.

JD White acknowledged that this change is relevant but that Anthology remains committed to leveraging combined platform data to provide insights for education clients. It’s just that Collaborate will no longer be a native platform, rather it will be integrated. Chasen described Collaborate’s deep integration with Learn as a key feature of the platform, but no matter how you slice it, this acquisition will remove Collaborate to a degree. Separate platform soon to be based on Zoom, controlled by a separate LMS-agnostic company.

I still think the move makes sense from Anthology’s point of view, but this area of Bb Data will take a hit.

What Does Class Get?

In a nod to the past days of Blackboard under Chasen’s leadership, Class primarily gets market share. From the TechCrunch article:

Now, with Collaborate, Class may be entering a new chapter. After the deal closes, Class customers can either use Class’ Zoom client or use Collaborate’s standalone product. That expanded support could be great for accessibility and help de-risk the startup for entirely depending on one platform. That said, Chasen said that Zoom is still the “long-term” play for the company, because its back end works well with his scale goals.

Zoom exclusivity aside, Class’ new buy does give it that kind of key partnership it needs to be taken more seriously from risk-averse institutions. Chasen said that the company is already bringing in significant revenue across its 350 clients, and now will be expanding to 1,750 customers with Collaborate.

In my interview, Chasen also mentioned the 1,300 Collaborate clients, but somebody has a math error. Class seems to have between 350 and 450 clients before the acquisition.

There is a secondary benefit in Class getting a combined feature set, with the opportunity and staff to combine Class for Zoom and Collaborate into a richer offering. But I will also note that I heard the same arguments when Blackboard bought WebCT, and in the end, WebCT shut down and Blackboard continued – with some new features, but not a full fusion of the product lines as promised.

But the primary benefit of market share is undeniable. With any reasonable level of client retention, Class will triple their client base at the least. And I suspect that Class will be seen by many clients as a beneficial owner, particularly if and when they drop or at least reduce the Collaborate excess storage fees.

Whither Collaborate the Platform?

I do not see how it makes sense for Class to support both their Zoom-based platform and Collaborate long term, and Chasen does mention Zoom being the “long-term” play. When I asked about Collaborate’s future in my interview, Chasen clarified that video conferencing based systems are different than LMS solutions, in that they have mostly similar functionality. The big difference is in the backend and ability to handle scale. Essentially the most important platform rationalization is to move Collaborate onto the Zoom platform as well, which Chasen stated would be the next major release.

That leaves the question of how long Class will keep the Collaborate brand and partially-separate product line alive. Chasen did not directly address this part of the question, but I am guessing it will be a matter of a few years, based on time to ensure there is a common feature set and commitments to migrate most of the remaining customer base. For the short term, the new product will be called Class Collaborate.

Open Integrations

Both Class and Anthology remain committed to open integrations, most often leveraging IMS Global’s LTI standards. Chasen stated that his companies current partnerships with D2L and OpenLMS remain important parts of the company business. Class uses Moodle as the basis for its LMS-like feature sets, and OpenLMS (the Moodle-based platform formerly known as Moodlerooms) is another key partnership in this area.

Putting it together, this is an interesting acquisition both in terms of product strategy and in terms of evolving financial markets for EdTech companies.

Disclosure: Blackboard and several of their competitors are subscribers to our LMS Market Analysis service.