Blog Archives - PhilOnEdTech

Instructure Considering Sale Options

Instructure, maker of the popular Canvas LMS, announced this morning that they are “reviewing strategic alternatives”.

Instructure (NYSE: INST) today announced that in response to interest received from multiple third parties, its board of directors, supported by management, has commenced a process to explore strategic alternatives in order to maximize shareholder value. These alternatives may include continuing as a standalone public company, going private, or being purchased by a strategic partner. The board has retained J.P. Morgan as its financial advisor and Cooley LLP as its legal advisor in connection with the review.
“Consistent with its duties and in response to interest from several parties, our board of directors has determined that it is prudent to undertake a review of alternatives to identify the best way to maximize shareholder value,” said Josh Coates, Chairman of the Board at Instructure. “As the board conducts its review, we remain focused on executing our strategy with an increased focus on the education market as well as the previously-announced strategic review of Bridge.”

This news comes on the heels of several articles about investor pressure being applied on the company.

April 2019 – Activist investor Praesidium takes 5+% stake in Instructure and pushes thesis that Instructure would be more valuable by selling off Bridge (corporate learning market) and concentrating on Canvas (academic market).
Early October 2019 – Instructure announces investor day on December 3rd where “management team will describe the company’s new strategy and operating model, key decisions about future financial goals, and the plan for focused capital allocation”. (couldn’t find direct link anymore, so using Google cache)
Late October 2019 – Activist investor Sachem Head takes a stake in Instructure and pushes company “to explore alternatives, including selling itself, two people familiar with the matter said”.
November 2019 – Praesidium joins Sachem Head in call for Instructure to explore a sale.
Today – Jana joins activist investor pool.

As part of today’s announcement [emphasis added]:

The company has not set a formal timetable for this exploration, nor has it made any decisions related to strategic alternatives at this time. While Instructure is pursuing opportunities, there is no assurance that the process will result in a transaction. The company does not expect to make additional public comment regarding these matters until the board approves a specific action or otherwise concludes the process.
The previously scheduled financial analyst day on December 3 has been canceled to allow management and the board to explore these strategic alternatives for the company.

Disclosure: I will note more prominently than usual that Instructure is a subscriber to the MindWires LMS Market Analysis data service (as are many of their competitors), and that we have a number of investment firms who are also subscribers to the service and pay for in-depth market data and research.

There will be more analysis coming in the future, but I would note several items to set context, especially for academic readers:

Bridge is a corporate learning LMS created by Instructure (not a corporate acquisition) starting in 2015, the same year that Instructure went public. This additional product line, with its larger available market, was a key part of Instructure’s IPO story.
When Blackboard went through a similar process and actually went private (i.e. a private equity firm acquired the company, taking them off of the public stock market), the process lasted from early summer 2011 until October 2011. That should give some sense of the timeframe of these decisions.
Blackboard also considered a sale in 2015 but did not actually change ownership – these processes do not always result in a sale.
At the risk of annoying some readers (again), I have pointed out that “there are strong arguments that company financial health in 2018 / 19 for the providers will continue to have an outsized impact on the future of LMS offerings”. Consider PowerSchool’s planned acquisition of Schoology and Blackboard’s recent debt ratings news (more on that in future post). This news is as much about the LMS market as it is about one company.
For academic community, it is worth noting that much of the investor-based pressure is for Instructure to focus more on supporting Canvas, not less. Instructure management has made it a point to say that they are increasing investment in Canvas, but today’s news puts even more emphasis on that need.

Keep watching – this should be interesting for the LMS market.

Update 11/14: Added note about Jana disclosing investment. Also added bullet about Bridge history.

Bb Learn Hosting Models: New global data for LMS market

Justin Menard from LISTedTECH (our partners in LMS market analysis service for higher ed and K-12) shared today that we now have the ability to track Blackboard’s Learn LMS hosting models. Self-hosting, Managed Hosting and SaaS Hosting (software-as-a-service, aka cloud hosting) are now captured in the data – globally for higher ed and in the US and Canada for K-12. This is a great addition, and to my knowledge we are the only ones to have this data in this scope. Head over to Justin’s blog to read more on the data additions. Also note that we will be validating and updating this new data over time, so treat this as our initial views. ¹Disclosure: Blackboard, D2L, Instructure, and Moodle are subscribers to our LMS market analysis service.

Part of the reason this is so important is that Blackboard, their competitors, and many in the investment community agree that a client moving to SaaS hosting changes their likelihood of remaining with Blackboard, and not just due to the contract extensions involved in the SaaS move. The movement to Learn SaaS and then to the Ultra user experience remains the core of Blackboard’s corporate strategy.

We can now provide independent analysis of the global transition to Learn SaaS, whereas previously we tracked this transition based on public Blackboard statements.

Our data confirms that roughly 30% of clients have shifted to Learn SaaS:

Recently Blackboard announced that they are making significant progress in moving many of their Middle East clients to Learn SaaS, which is impressive given the historical tendencies in this region to strongly favor self-hosting models. From the press release:

Blackboard, a leading education technology company for teaching, learning and student engagement, announced today that many of its clients across the Middle East continue to transition to the Software as a Service (SaaS) deployment of Blackboard Learn, the company’s flagship learning management system (LMS). [snip]
The benefits of moving to a cloud-based delivery model include continuous delivery of new features, zero-downtime updates and quicker delivery of fixes. Once institutions are on SaaS, they can enable Learn Ultra, Blackboard’s next-generation LMS, which offers educators and students a clean, modern interface and intuitive workflows.

Using our data, we see that the Middle East has indeed started a significant shift to Learn SaaS hosting models. In Justin’s post you can see that approximately 20% of Blackboard Learn clients are now on SaaS, and interestingly they shifted directly from self-hosting (i.e. there is no managed hosting usage in this region).

What is interesting is to look at the age of Blackboard Learn implementation for each of the current hosting models. In other words, for each hosting model of Learn, how long have those schools been Blackboard LMS clients.

For higher ed clients, there is a broad range of ages moving to Learn SaaS, yet for K-12 there is a narrow range of mostly 4-6 year clients that have moved. Part of this is likely due to K-12’s smaller support staff and budgets for LMS, which also has lead to a smaller percentages on Learn SaaS than in North American higher ed (19% vs. 33%).

We expect this data addition to open new capabilities for us to analyze the LMS market and its underlying trends. Instructure’s Canvas was created designed on cloud hosting, and D2L’s Brightspace has recently completed its transition to the cloud. The story is broader than Blackboard.

Disclosure: Blackboard, D2L, Instructure, and Moodle are subscribers to our LMS market analysis service.

IMS Global Europe Summit 2019

Author Jeanette Wiseman, Blog November 6, 2019/0 Comments/by Jeanette Wiseman

A few lifetimes ago, I spent quite a bit of time engaged in IMS Global activities– be it bi-weekly workgroup meetings, regional presentations, or the annual Learning Impact conference. IMS Global was something I was steeped in. It had been years since I spent time in that space, but when I had a chance to go to Barcelona to attend CanvasCon Europe ²That post is coming, likely in conjunction with Phil’s report after he attends Global MoodleMoot, also in Barcelona. and IMS Global Europe Summit, how could I refuse? Educational Technology and Tapas? Sign. Me. Up.

Barcelona

The summit took place at the beautiful Palau Macaya. The 112 attendees of the IMS Global Europe Summit were primarily from various countries in Europe, but the attendees also included the US, Asia, and Africa. Of late, IMS Global has seen incredible growth in its European membership, with more than 60 organizations headquartered in Europe. This number doesn’t include organizations and vendors with a European presence, such as the large LMS vendors or VitalSource, who all contribute to the standards community.

One of the largest success stories of IMS Global is the widespread adoption of the Learning Tools Interoperability (LTI) standard. LTI has seen wide adoption with institutions and vendors alike, leveraging it for the tools and applications that they want integrated within the platforms that they use. It’s been successful because it allows tools to be used in multiple independent learning platforms, overcoming what used to be heavy lifting for each vendor having to develop custom code for each platform, with each platform’s custom integration interface. Instructors and learners now expect this seamless learning experience that LTI enables.

LTI Advantage

Now, LTI Advantage, a package of LTI services by IMS Global, looks poised to be even bigger than LTI’s current version (1.3), and based on this year’s Summit, it is a clear priority for the members of the consortium. The IMS Europe Summit agenda was primarily focused on the success stories of the ease of use of LTI Advantage from large and small vendors alike. LTI Advantage is a package of three services: Deep Linking (Content Item in LTI), Names & Role Provisioning (Membership Service in LTI), Assignment and Grade Center (previously Outcome Services in LTI), each to be more easily configured and controlled.

LTI Advantage’s history, however, is related to the recent abandonment of LTI 2.0 specifications. Michael Feldstein has a good summary of what went wrong there:

Interoperability standards, being multilateral trade agreements, are rarely innovative or sexy if they are done right. Once in a while, a working group may come up with a new spin that is generative. But this is always a risky proposition. The technologists and product designers on these working groups, being creative people, want to come up with cool stuff. But “cool” isn’t what drives their employers to adopt. There always needs to be a cost/benefit analysis for each potential adopter. If that analysis doesn’t look good, then no amount of coolness will matter.
As far as I can tell from the outside, this is precisely what went wrong with LTI 2.0.

Originally it appeared that LTI Advantage might be a hodgepodge of leftover standards meant to help recover from LTI 2.0. But it is now apparent that LTI Advantage is more than that, and most importantly, there seems to be broad buy-in and adoption of the standard.

In my past experiences with IMS Global meetings, there was always an energetic yet cordial gathering of folks looking to discuss integrations and uses of standards within education technology. For a non-coder/techy type the discussions could become somewhat dry, they also could become very lively. In my past, there always seemed to be those one or two guys that are frustrated with how a standard is working within their platform and make sure the group knows it. Maybe I have been gone too long, but I did not hear one naysayer on LTI Advantage. Instead, there was an apparent consensus of how well the standard is working for the early adopters.

To date, there are currently 28 LTI Advantage certified products. This status has been made possible through the hard work of the IMS Global members meeting twice weekly for several months, to make sure that the release of the standard was where they wanted it to be. I heard more than one tool provider say that the integration took less than an hour to complete and that it was the most straightforward process they have experienced with a standard. To prove this point, IMS Global had 30 companies volunteer for lightning talk presentations highlighting the plug-and-play ecosystems using LTI.

The lightning talks did lead to some eyebrow-raising (or in my case, open-gaping mouth) moments during the panel session where a panelist described that LTI is so easy to implement, it passes the “mom or wife test”. Yep – even those moms and wives could do it. ³Eye roll While I understand the point that LTI Advantage is poised to take interoperability to the next level, there is a cultural issue worth calling out. Women were under-represented at the conference, which is fairly common for a conference like IMS. On one hand, that panelist needs to understand that it’s 2019. On the other hand, we need more participation from women in education technology (among other areas) to counteract these types of sentiments.

One reason LTI Advantage is off to just a great start is the active role the LMS vendors have taken from the beginning of the development of the new standard. For the Europe Summit, both Blackboard and Canvas were top sponsors, with leaders from both companies playing a major role at the conference itself.

IMS Global Europe Summit 2019 Sponsor Logos

Given what looks like a successful launch of a new standard, it will be interesting to see how widespread LTI Advantage becomes and how this interoperability will change the EdTech landscape for educators and students.

Well That Was a Memorable OpenEd Conference

Author Phil Hill, Blog November 2, 2019/0 Comments/by Phil Hill

Some conferences are more difficult to cover than others, and this year’s #OpenEd19 – the primary OER-related conference in the US – goes in the former camp. Obviously the big story was David Wiley’s announcement that this would be the last OpenEd even he (and Lumen Learning) would organize.

The End, The Beginning

With that growth comes change. That little meeting I convened 15 years ago has evolved organically in a way that has served the community fairly well. However, as currently constituted, the conference does not leverage all the energy, enthusiasm, passion, and leadership ability in our increasingly large and increasingly diverse community. And so the time has come for us to reconsider, as a community, how we wish to organize ourselves, learn from each other, and collaborate with one another.
In order to make the necessary space for that conversation, this year’s Open Education Conference is the last I plan to organize.

Thankfully, Michael Feldstein came to the rescue with an excellent post “The Crumbling of the OpenEd Coalition”, which starts by quoting David’s post in its entirety and then frames the situation in historical and coalition context.

In my opinion, these reactions miss an underlying dynamic that makes this change more serious and difficult to patch over than it may appear on the surface. OpenEd was always at least partly an exercise in coalition politics. The attendees were a mix of people coming with different primary and secondary goals that overlapped enough for them to make common cause. That coalition has crumbled. In fact, it has been crumbling for some time. The idea that this conference could have been neatly handed off to some new steward as-is assumes that OpenEd is is otherwise tenable as-is. I don’t believe that is true.

My primary thoughts? Go read Michael’s post in full. It’s that important. I’ll wait.

Part of the reason that this conference was difficult to cover was the difficulty to cover a complex subject, with some personal biases and potential conflicts, in a productive manner. First, Lumen Learning is a client of MindWires – I’ll let the reader decide how that should influence your reading of this post. ⁴Typically I try to avoid writing directly about consulting clients, but for this story it’s unavoidable. Second, Michael described our joint keynote at the 2015 OpenEd, arguing that OpenEd “a brittle coalition that could fracture if the coalitional challenges were not addressed”. I’m an interested party.

The key argument Michael makes is that “the current situation is not a signal of OER’s failure but rather a side effect of its success.”

It was an encouraging sign to see the conference wrapping up with community discussions on discovering and planning the future, with much of the discussion focusing on the point expressed by Lauren Slingluff and Ethan Senack:

Transparency & community ownership need to be part of future conferences. The community needs to have a real convo about who is involved, what a conf might look like, reflected values, who is centered… no one is being crowned as a successor; we need to figure it out together.
— Ethan Senack (@ESenack) November 1, 2019

That is exactly right and aligns with David’s point on reconsidering as a community. There is already a shared Google Doc organizing community input (see responses here). I doubt the answer will end up being “continue the same thing with new organizers”, and I would also expect to see several communities come out that capture the needs and interest of various factions. But we’ll have to see what happens.

Alternate Views

One of my favorite sessions at the conference was a session labeled “Alternate Views on Open”, where I was expecting some more of the coalition politics and fracturing views of OER. I guess I didn’t read deep enough into the abstract, as one part of the session captured student views – something that can easily get lost in the internal debates and social media dynamics. Helen McManus from Northern Virginia Community College shared my favorite OpenEd slide, capturing the all-too-common narrative that open education advocates see and present.

But McManus’ point was that this is not the view that students have for the most part.

Students are dealing with real-world problems like dealing with jobs and families while trying to get an affordable degree or certificate. Insiders tend to fall back on the narrative and forget the students. Yes, the topics overlap, but it is all too easy to focus on the narrative over the reality, especially with the changing demographics of student populations.

Here’s hoping that the OpenEd community takes the opportunity of reflection and reconsideration of coalition changes to raise the priority of students’ viewpoints and participation in the discussion.

Institutional Decisions on OPM Market: Upcoming discussions on complicated questions

Author Phil Hill, Blog October 31, 2019/0 Comments/by Phil Hill

Following our recent webinar with WCET on the Online Program Management (OPM) market, I am excited to lead two sessions next week at one of my favorite events of the year – the #WCET19 conference in Denver. As background, see this post addressing the OPM market.

Wednesday, Nov 6th at 1:45pm MT in Penrose 2 – #WCETOPM Navigating the OPM Marketplace: Picking the Right Partners While Avoiding Market Chaos This will have some overlap with the webinar but will focus more on the choices and decision-making processes that academic institutions face when evaluating OPM vendors or even deciding whether to use an OPM partner.
Wednesday, Nov 6th at 4:30pm MT in Denver 1-2 – #WCETOPMUnconf OPM Unconference Session Our webinar from September is available online, and we had some great questions during the webinar but were restricted by time constraints on addressing them all. During this session we plan to focus on answer the webinar questions and new questions from attendees. Come for a discussion.

Some the topics that we plan to address in these sessions, partially based on webinar questions:

Ideas for bringing OPM providers and schools together for more transparency and research on program outcomes;
The relationship between the OPM (and broader Online Program Enablement, or OPE) market and all-too-common lack of institutional support/structures vs. demand/competition for online learning programs;
Whether OPM critics, analytics, scholars, company leaders, and schools can come together for a collegial discussion;
The increasing emphasis on quality course and curriculum design; and
Advice for schools to consider with regards to policy, practice, and regulation when entering into a partnership with an OPM/OPE.

I don’t pretend to have simple answers for all questions – come, participate and expect a real discussion at the sessions.

Did Instructure Refute LMS Market Slowdown? It’s a matter of semantics

Author Phil Hill, Blog October 29, 2019/4 Comments/by Phil Hill

On yesterday’s Instructure Q3 earnings call, the company’s opening statement seemed to refute the LMS market slowdown that we noted just over a year ago.

Now I would like to share details on how key areas of our business are performing. Domestic Canvas is progressing nicely, on track to deliver results in line with our outlook for the year. So while some analysts have been reporting a sharp slowdown in Higher ED LMS switches we are not seeing that trend in our domestic Canvas bookings. In fact our high ED domestic bookings are on track to be up this year over last year.

Brian Peterson at Raymond James is the other analyst besides us reporting on an LMS market slowdown, using independent data collection.

Did Instructure ⁵Disclosure: Instructure is a subscriber to our LMS Market Analysis service. refute our argument of “a sharp slowdown in Higher Ed LMS switches”? That’s a question that we take seriously, as it gets to our reputation and accuracy of data for market analysis. On one hand, if we have big holes in the data or even wrong data, we need to describe this openly and fix the problem. On the other hand, if our data is accurate, we need to call out why we have different interpretations.

One explanation that is becoming more clear is that we’re dealing with a matter of semantics, and Instructure’s statements include confusing terminology.

Before we go on, I should clarify that what we provide at MindWires and through this blog is LMS market analysis. We describe the relevant trends on the higher ed and K-12 markets and how to best understand what might happen in the future. We are not a financial analyst firm. My interest is in transparency and accuracy in market trends and not in stock prices.

Confusing Blog Post

Instructure changed their announcement strategy on new clients to list most of them in a blog post released just after the earnings call instead of during the call. In this blog post yesterday, Instructure did list some impressive new wins, including some that we did not yet have in our data set. We’ll highlight the domestic ones, since that is the scope of Instructure’s comments on our market slowdown reporting.

Previously, a list of customers from each quarter was highlighted on our quarterly earnings call, but moving forward, we plan to dedicate blog posts, like this, to highlight the organizations that are joining the Instructure family.

Princeton University, Wake Forest University, and Ferris State University were big wins that we already had.
Prairie View A&M, ~~CalPoly Pomona~~, Eastern Gateway College, University of South Alabama, and Chapman University are wins that we found out about through the Instructure blog post. Note: Upon further research we discovered that CalPoly Pomona was not a new Canvas client – they remain a Blackboard client. Their listing in blog is based on some other system (e.g. Portfolium, MasteryConnect).
This is a good quarter with some solid wins, but let’s get to the confusing part.

Instructure also listed several clients that moved to Canvas years ago.

Skyline College in California adopted Canvas as its LMS through the Online Education Initiative (OEI) ⁶Disclosure, OEI is a long-time consulting client of MindWires, and I facilitated the LMS selection in 2015. back in 2016/17, and in early 2018 their academic senate even produced a report describing their cost savings by using this statewide contract.
Laramie County Community College adopted Canvas as its LMS in 2017.
University of North Texas Health Sciences Center adopted Canvas as its LMS prior to 2017.

Why would Instructure list old clients in a blog about “organizations that are joining the Instructure family”? This is particularly important when there are claims and counter-claims about market slowdowns.

I asked the company for a statement, and they clarified that this post included upsells and that they would update and clarify the language.

Depends on what the meaning of “Canvas” is

One issue I see is that the definition of Canvas is changing, and these changes confuse the story about organic growth. To understand, we should look at two changes in branding that happened this year. This summer Instructure rebranded Canvas from being the core LMS to being the Canvas Learning Platform. This bundled Catalog, Practice (acquired product), and Studio into the definition of Canvas.

This fall, Instructure further rebranded the software products from their acquisition of Portfolium. In essence, the Portfolium Network kept is name and is offered free to all Canvas clients, but the revenue-generating portions of Portfolium are now branded as Canvas. Canvas Folio Management, Canvas Pathways, Canvas TalentMatch, Canvas Outcomes Assessment. In essence, Portfolium brand is the free stuff, Canvas brand subsumes the paid stuff.

Now go back to the earnings call. The prepared remarks are highly-edited and very deliberate in wording. I would think that the corresponding blog post was highly reviewed as well, but that is not as clear. CEO Dan Goldsmith acknowledged our (and Brian Peterson’s) LMS market slowdown analysis as LMS switches, but he answered this claim as “we are not seeing that trend in our domestic Canvas bookings“. During the Q&A portion of the earnings call, Brian Peterson asked for more details. [emphasis added]

Brian Peterson
And maybe just a follow-up on the domestic Canvas bookings. I think the comment that the higher ed bookings are on track to be up this year but that’s better than I expected. Can you confirm if that’s an organic comment or does that include Portfolium? And are there any large deals for the rest of the year that could swing that figure one way or the other? Thanks, guys.
Daniel Goldsmith
So that is 100% an organic number. You know I can’t speak to the rest of the industry but as you and others have been indicating you are seeing us sort of sharp slowdown in LMS switches. This year when we look at our domestic higher ed Canvas bookings, you know we are forecasting being up in bookings year-over-year which we’re pretty excited about.

Note that Goldsmith said organic but did not say explicitly that the bookings growth did not include Portfolium stuff. Is this due to Canvas branding now including Practice, Studio, Catalog, Folio Management, Pathways, TalentMatch, Outcomes Assessment when these were not included last year? I do not know the answer to this question but have asked Instructure for clarification.

Who else saw the slowdown? Instructure

We should be clear that Instructure’s CFO Steve Kaminsky noted the LMS market slowdown one year ago in their Q3 2018 earnings call.

So for renewals what we’ve seen specifically this year is fewer large deals in the multi-hundred thousand dollar range than we’ve seen in previous years. It’s a little still too early to talk about 2019, we’ll be doing that in a few months but we have seen that and when I referenced earlier that it didn’t look like we’re going to grow domestic Canvas by much of it all, that’s what I was really referring to, that’s the key driver there.

There has been a slowdown in the LMS market, but there is a question of when it started and whether 2019 is different than 2018.

At the very least, Instructure is playing around with semantics and not directly answering relevant questions about its core LMS platform and the LMS market slowdown. Instructure is coming out with statements that appear to refute our analysis of an LMS market slowdown, but they have not (thus far) provided meaningful specifics backing up their claims. When they appear to show new clients in a blog post, the conflate upselling old clients with acquiring new clients (but kudos for promising to fix the post). The definition of Canvas is changing, and it is not clear how much of their platform redefinition and M&A activity gets included in their definition of Canvas bookings.

If Instructure is changing these definitions and bundling in new items into Canvas bookings, then I do not believe that Instructure has refuted our claims of an LMS market slowdown. And I believe it is misleading to describe year-over-year changes in Canvas without clarifying how the definition might have changed. It’s all well and good that Instructure is expanding its product line and generating new business, but we need to have clarity around the core LMS market trends.

If we find out that our analysis of the market slowdown is inaccurate, we will update our analysis and publicly disclose the changes.

Update 11/5: CalPoly Pomona is not a Canvas LMS client. See description above.

Disclosure: OEI is a long-time consulting client of MindWires, and I facilitated the LMS selection in 2015. Instructure is a subscriber to our LMS Market Analysis service.

About the PowerSchool Acquisition of Schoology

Author Phil Hill, Blog October 27, 2019/1 Comment/by Phil Hill

On Thursday we got word that PowerSchool has reached an agreement to acquire Schoology, potentially shaking up the K-12 LMS market. EdSurge covered the news on Thursday.

If approved, the pending acquisition would mark the latest puzzle piece that PowerSchool has purchased this decade. Founded in 1997, Powerschool was first bought by Apple in 2001, and then by Pearson in 2006. The publisher sold the PowerSchool to private equity firm Vista Equity Partners in June 2015. Onex, another private equity firm, invested in PowerSchool in 2018 and shares equal equity ownership with Vista.
Since 2015, PowerSchool has acquired eight companies. Through these deals, the company has expanded its product suite beyond its original K-12 student information system offering to assessment, enrollment, special education and talent management services. Schoology would be PowerSchool’s second purchase of a learning management system (LMS), after it acquired Haiku Learning in 2016. Haiku has since been rebranded as PowerSchool Learning.

I have covered Schoology in a series of posts at e-Literate, mostly focusing on their partial entry into the higher ed LMS market. I described the company and product in some detail in this 2016 post. In addition, Jeanette covered the recent Schoology NEXT users conference. In the EdSurge article last week, she observed:

Even in third and fourth place, Schoology holds unique bragging rights. While Instructure, the developer of Canvas, has reportedly never lost a higher ed customer, “our data showed that two K-12 districts became the only losses of customers that we are aware of in the history of Canvas, with both selecting Schoology in 2019: Tempe School District and Turner Unified School District in Kansas City,” wrote Jeanette Wiseman, a senior associate at MindWires, an education market consulting and market analysis firm, earlier this year.
From her perspective, PowerSchool’s desire to add a popular tool to complement its flagship student information system makes sense. “They’re taking what is a really successful LMS in the K-12 space, and pairing it with the tool that all teachers have to work with, the SIS. All the data that schools manage … everything flows into the SIS,” she tells EdSurge.

New K-12 LMS Market Data

The “third and fourth place” comment relates to our new K-12 LMS Market Analysis service, and the data helps explain why this acquisition makes sense.

Like our higher ed market analysis, we (through our partnership with LISTedTECH) track historical trends in the K-12 market, allowing a view of market trends. One view is looking at percentage of North American (US & Canada) new LMS implementations each year by vendor.

Some notes from this data: ⁷Disclosure: Schoology, Canvas, and D2L are subscribers to our LMS Market Analysis service.

Schoology and Canvas are strongest competitors for revenue-generating LMSs in K-12, generating far more new business than other proprietary systems.
Not directly shown in this view, but Google Classroom is playing an increasingly large portion of the “All Others” category. This is important, but that solution does not directly generate revenue, and this story is about corporate finances.
PowerSchool did not get big impact from the 2016 Haiku acquisition and is a secondary player at best in the LMS market. This position has limited their ability to truly provide full enterprise K-12 solutions and “unified classroom”. Schoology, however, does have real market power in K-12.
At the same time, business is difficult in this market, and Schoology has gone through layoffs since their late 2015 fund-raising round of $32 million. Their biggest competition in the K-12 market is Canvas and Classroom (primarily) and D2L (secondarily), and it takes capital to aggressively compete.

Does It Make Sense?

Seen in this light, the acquisition makes sense from a PowerSchool perspective. They can now try a more realistic approach to fully serve K-12 districts with their “unified classroom”. This is a data play at its heart, as described in a 2016 EdSurge article on PowerSchool.

PowerSchool has now added an array of services in the past 15 months, including a learning management system (through its purchase of Haiku Learning), special education reporting (TIENET), student enrollment (InfoSnap), formative assessments (Interactive Achievement) and a Canadian SIS (SRB Education). The company doesn’t plan to halt its shopping spree, Gulati says: “We’ll continue to remain acquisitive and continue innovating.”
By hooking up different education tools into the PowerSchool SIS, which serves more than 24.5 million students across the world, Gulati hopes to make data more accessible and actionable for teachers. He’s not alone: other companies such as Alma, based in Portland, Ore., also aim to combine SIS, LMS and other education data tools into one single package.
“What we’re trying to solve is the problem of data silos and fragmentation in K-12,” he explains. “Teachers currently have to go through several systems to use all the tools they need for instruction.”

The acquisition also makes sense from a Schoology perspective, as they now have a “potential” source of capital in a difficult market. I put potential in scare quotes because we don’t know how much Vista Equity Partners and Onex will invest in Schoology product and service development. Vista is well known for having a playbook on how they view software companies, as described in a 2018 WSJ article.

The goal of the Austin, Texas-based firm, which is 18 years old, is to transform business-software companies into profit machines. Behind its approach is Mr. Smith’s belief that certain aspects of the companies Vista buys are interchangeable.
“Software companies taste like chicken,” he said at a conference in New York a few years ago. “They’re selling different products, but 80% of what they do is pretty much the same.”
Derek Jones, managing director at longtime Vista investor Grosvenor Capital Management, says “their process is like a factory. A deal comes in and it gets compartmentalized, and they apply experts on each compartment. After it goes off the assembly line, the margins are higher.”

The article is largely about Vista’s founder and leader, Robert Smith. Yes, the one who said he would pay off all student debt for Morehouse College 2019 graduates.

Potential Impact on Market

Assuming that Vista follows this playbook, there will be significant changes to Schoology’s operations, and if successful the company will become more profitable. If those changes take investment, Vista has been known to put in near-term money (often debt) to get longer-term payoff. The real investment is in PowerSchool, but there are certainly signs that Schoology will be run as a separate entity, at least initially.

I can see both positive and negative effects for other LMS competitors such as Canvas and D2L (something makes me think that Google doesn’t spend too much time worrying about this type of move). On the positive side, corporate acquisitions tend to create pushback from academics, although this effect tends to be greater in higher ed than for K-12. But certainly Schoology’s competitor’s have new marketing messages to use. On the negative side, one of the top four K-12 LMS competitors is about to get a lot more financially sound and likely more aggressive. The acquisition makes sense, but that does not necessarily mean that it will succeed.

For now, the pending PowerSchool acquisition of Schoology is more evidence that corporate finances will have an outsized influence on the LMS market. This move could even accelerate other LMS companies to shore up finances. We’ll keep our watch on the market.

Update: Make sure to read this post from our partners at LISTedTECH, including a really cool graphic showing K-12 SIS & LMS shared usage data.

Reminder: If you’d like a deeper look at the data, check out our new K-12 LMS Market Analysis service.

Disclosure: Schoology, Canvas, and D2L are subscribers to our LMS Market Analysis service.

Exploring Equity as an Emerging Data Trend at #EDU19

Author Kevin Kelly, Blog October 22, 2019/0 Comments/by Kevin Kelly

“Diversity is where everyone is invited to the party. Equity means that everyone gets to contribute to the playlist. And inclusion means that everyone has the opportunity to dance.”
Defining DEI, University of Michigan

We all view the world through specific lenses, and those lenses change over time. Based on work I’ve been doing with Peralta Community College District over the past two years, equity ⁸If you’re not clear on the definition, Peralta uses the term equity to mean “freedom from bias or assumptions that negatively impact online learners’ motivations, opportunities, or accomplishments.” See more details at https://web.peralta.edu/de/peralta-online-equity-initiative/equity/ is one of my lenses. When searching the the recent Educause Conference (#EDU19) schedule, I was pleasantly surprised to find several sessions that used the word “equity” in the title or description – 3 breakout sessions and 5 repeating poster sessions on Tuesday, 1 featured session and 3 breakout sessions on Wednesday, and 2 breakout sessions on Thursday.⁹NOTE to the #EDU19 organizers: With so few breakout sessions devoted to equity topics, it was disappointing that several of them were scheduled at the same time as another. While it was a pretty small percentage of the overall program–I counted over 90 breakout sessions on Tuesday alone–hopefully that percentage will grow over time.¹⁰The number of sessions did increase a little if you also searched for “diversity” and “inclusion.”

In our October 21 post, “Educause 2019: Multiple views into educational technology conference,” Phil Hill and I described a heavy emphasis on data and analytics at this year’s conference. Interestingly, when viewed side-by-side two institutions from Michigan presented an emerging dichotomy related to how using data affects equity and inclusion. A breakout session described data-driven decision-making to increase inclusion, while a featured session warned against (mis)using data in ways that decrease equity. More interestingly, both presentations’ different perspectives made sense.

Taken together we can see that using data to improve access equitably is an example to follow, but using data to analyze people’s behaviors without understanding equity is a mistake to avoid.

A Tale of Two Sessions

The breakout session about data-driven decision-making was standing-room-only–no surprise for a conference serving over 8,000 people, a quarter of whom were first-time attendees. I was able to catch some of the presentation while standing in the hallway at the back of a long room. As the first of three presenters to speak in this session, a representative from Grand Valley State University (Allendale, MI) described how that school uses data from Blackboard’s Ally tool to determine how many learning objects or materials need to be or have been remediated after identifying accessibility issues. They are just getting started, but the data fosters an awareness of just how many learning objects are inaccessible to some extent. Accessibility accommodations for people with disabilities comprise a key set of equity-based practices.

At the human level, I’ve taught online teaching workshops that provide accessibility strategies. Faculty can get overwhelmed by the facts that a) their materials are not accessible and b) they may have to fix between 50 and 100 files for any given course that they teach. To their credit the Educause conference organizers provide “Accessibility Information for Presenters,” which contributes to the ongoing awareness campaign.

The featured session by Chris Gilliard from Macomb Community College (Detroit, MI) was my favorite session at the conference this year. EdSurge has already posted an article outlining Gilliard’s session about “Digital Redlining,” summing up the session’s premise in the first sentence:

“Colleges are increasingly using Big Data to monitor students, control their access to information and set them on learning paths they may not have chosen.”

I encourage you to go read the entire article. The author, Rebecca Koenig, paid close attention to Gilliard’s cautions about predictive analytics, his challenges to the joint Educause-AIR-NACUBO publication that states “Analytics can save higher education,” and his issues with the use of digital surveillance. Rather than cover the same ground, I’ll share some practical takeaways.

The Old Takeaway Shop

One, just as historical policies and practices enforced redlining to discriminate against certain populations in a community or housing context, higher ed policies and practices can cause digital redlining that discriminates against certain populations in an educational context. Here are two examples Gilliard presented:

IT units should consider how campus-wide Internet filters may block learners from accessing otherwise public content. This has a disproportionate impact on learners who do not have broadband connections at home.
Given limited funding, libraries should include equity-related criteria when selecting the resources (e.g., electronic journals) they purchase and provide.

And two, just as faculty need to gain awareness of accessibility issues, educational technologists and campus leaders need to gain awareness of potential equity issues, especially when data is involved. National organizations are doing their part–here are just three examples:

The EDUCAUSE Board and leadership have established diversity, equity, and inclusion (DEI) as a critical priority for the association. At #EDU19 the Educause CEO also addressed “The State of Digital Ethics in 2019,” prescribing both caution and hope.
The Association for Authentic, Experiential, and Evidence-Based Learning (AAEEBL)¹¹Disclosure: Kevin is currently a member of the AAEEBL Board of Directors.
has created a year-long Community of Inquiry related to digital ethics and ed tech, starting with a global Twitter Chat, “Defining digital ethics and ePortfolios.”
The Association of American Colleges & Universities (AAC&U) has an entire conference on Diversity, Equity and Student Success.

Great Expectations

While the conversations around data and analytics started years ago, the conversations that extend to equity and inclusion are just getting started. The two Educause sessions highlighted here present different scenarios. One involves leveraging data to decrease discrimination, while the other advises approaching data projects with open eyes. Paraphrasing Gilliard, “Do not say your work is like Netflix or Amazon or Google for education. It doesn’t mean what you think it means.”

As campuses begin data-driven decision-making or learner analytics initiatives, those efforts can be made a) more diverse and inclusive by inviting a wide range of different people to participate and by welcoming their perspectives, and b) more equitable by collectively checking for bias or assumptions that could negatively impact learners. The EdSurge article about Gilliard’s conference session made note of recent move in this direction:

“There were signs throughout the conference that educators are trying to strike a better balance with their data practices. …The chief information officer at Dartmouth College, Mitchel Davis, explained how he is working to rewrite campus contracts about what tech vendors can do with student data. At UT Dallas, …administrators collaborated with student government to better inform students about how their data may be collected.”

At MindWires, we bear the same responsibility. As we engage in various research efforts, we need to expand the circle of conversation to include people who can help us check our own biases and assumptions. As I tell my students who are learning how to improve their learning, becoming aware is just the first step in the process. You have to follow that with intentional action, and close the loop with reflection on what worked and what needs further adjustment. Similarly, IT professionals who become aware of equity issues, must make it more than a good idea. They have to apply equity principles to their data practices. To that end, keep an eye out for the development and publication of tools (e.g., rubrics), exemplars, or guidelines to support campuses that are ready to engage in that intentional action–collecting, analyzing and using data in equitable ways.

Notes:

If you’re not clear on the definition, Peralta uses the term equity to mean “freedom from bias or assumptions that negatively impact online learners’ motivations, opportunities, or accomplishments.” See more details at https://web.peralta.edu/de/peralta-online-equity-initiative/equity/
NOTE to the #EDU19 organizers: With so few breakout sessions devoted to equity topics, it was disappointing that several of them were scheduled at the same time as another.
The number of #EDU19 sessions did increase a little if you also searched for “diversity” and “inclusion.”
Disclosure: Kevin is currently a member of the AAEEBL Board of Directors.

EDUCAUSE 2019: Multiple views into educational technology conference

Author Kevin Kelly, Author Phil Hill, Blog October 21, 2019/0 Comments/by Kevin Kelly, Phil Hill

Last week we (Kevin and Phil) attended the Educause conference (#EDU19), the EdTech event in the US for higher education. As always, the conference leads to a flurry of meetings and social connections – with ~8,300 attendees it can be difficult to not have meetings – as well as the opportunity to get a sense of what higher education administrators are talking about and seeing from vendors. This year was particularly interesting as we were able to have multiple views into the showcase at the exhibit hall – from our consulting & market analyst role and from an academic administrator & staff role.

Market Analyst View

One theme that emerged as soon as one entered the exhibit hall was the (Re)emergence of Big Tech. Attending EDUCAUSE a decade ago, it was difficult to not view technology as primary by large companies selling IT infrastructure and ERPs (student information systems in particular). The marketing spend on ERP has gone down in the past five years or so, but this year ERP is back – big booths for traditional Oracle, Ellucian, Jenzabar suppliers as well as newer ones like WorkDay, Unit4, and Unifyed. These booths were mostly clustered at the entrance, and the level of spending on the booths and the general interest were markedly greater than previous years. Add to this the increased presence of Big Tech such as Amazon, Microsoft, and Google. And the mood of these companies seemed to be more positive. As we heard at Jenzabar, they think schools are not taking transformation seriously and want to re-engineer their business processes.

Another theme goes beyond exhibit hall booths and hallway conversations – Data and Analytics. This year EDUCAUSE started taking an activist role in pushing for the usage of data and analytics as the way to enable transformation, best described in their recent article “Why Data and Analytics Matter—and Why They Matter Now“. The italics for Now is intentional, and EDUCAUSE is pushing it:

EDUCAUSE, AIR, and NACUBO created a Statement on Analytics that describes the urgency of a cross-enterprise approach and outlines actionable recommendations for heightening analytics’ role in an institution’s strategic efforts. We’ll present the statement and help you develop ideas for collaboratively moving analytics forward at your institution.

There was also a heightened sense of pushback on this idea of data and analytics as all-important drivers of change, both from a privacy perspective and an equity perspective. We’ll devote a follow-up post to the provocative counter-argument about ”Digital Redlining” posed in a concurrent session led by Chris Gilliard from Macomb Community College (Detroit, MI).

There were a large number of exhibitor booths related to Cybersecurity, reinforcing both emerging higher education needs, such as addressing ransomware and cyberattacks on college IT systems, and recent higher education trends, such as addressing workforce and statewide needs in the cybersecurity arena. Just a few specific examples of higher ed cybersecurity initiatives to watch include a) University of Albany launching its first-in-the-nation College of Emergency Preparedness, Homeland Security and Cybersecurity, b) the CalState system targeting cybersecurity as a career path, and c) University of South Florida hosting and leading the Florida Center for Cybersecurity (aka Cyber Florida).

Oh, and continuing a marketing trend from last year, business cards are getting thicker.

Academic Staff View

While MindWires consults with higher ed institutions every day, it’s been around eight years since Kevin managed two academic technology teams on a campus. Kevin found it quite instructive to make a pass through the exhibitor hall with colleague Crista Copp, Director of Loyola Marymount University’s Educational Technology Services & Support. For sure, she had typical conversations about mission-critical systems and common campus technologies–for example, before she even got to a booth, a rep from an LMS vendor stopped her to see if LMU is happy with D2L (they are). However, in the span of 15 minutes, the two made a number of stops that highlight the increasingly diverse needs that today’s campus ed tech units support. Some of the topics that Kevin encountered with Crista that we would likely have overlooked on our own are described below.

eSports (MSI): As of last December, “over 50 colleges and universities [had] created competitive eSports athletics programs,” and that number is expected to grow quickly (Academic Impressions, 2018). Loyola Marymount is starting its eSports efforts with a small space, confirming the lede from the recent Inside Higher Ed article about eSports in higher education: “Colleges don’t need fancy arenas or hundreds of high-speed computers to launch esports teams, but they do need engaged students.” In time, LMU may choose to emulate Harrisburg University, which was described as wanting to be the ‘Notre Dame of esports.’ First things first.
Career preparation platforms (vmock): LMU has launched an initiative to help undergrad, grad, and law students alike prepare for and pursue careers through tech-based career readiness activities like mapping academic work to career goals, optimizing résumés and LinkedIn profiles, or practicing interviews. This aligns with larger career center trends shared in last year’s Inside Higher Ed article advocating the addition of career preparation to classroom learning.
Battery charging kiosks (Hubbell): While not all students have equal access to reliable technology (Indiana U, 2018), most students do have at least one device that needs to be charged (e.g., see U of Central Florida’s multi-year study on mobile learning or McGraw Hill’s 2017 Digital Study survey). LMU wants to provide charging options for mobile learners, without charging students an additional fee.

Additional Coverage

Additional EDUCAUSE coverage worth reading:

e-Literate (it was great seeing Michael in person): What I Didn’t See at EDUCAUSE
Chronicle: The Talk of Educause
EdSurge: At Educause, a Push to Monitor Student Data is Met with Concerns About Privacy and Equity and How Tech Companies Are Selling Colleges on Mass Data Collection
Inside Higher Ed: Prioritizing Privacy
Education Dive: In higher ed tech, where’s the ‘hype’ and what’s the promise?

We plan to make a deeper dive in future post(s) on the topic of data and analytics, and in particular on the push for data and analytics. Stay tuned.

LMS Decommissions: A view of lost clients and campus closures

Author Phil Hill, Blog October 19, 2019/5 Comments/by Phil Hill

One theme of our coverage of the academic LMS market over the past 1 – 2 years, both at e-Literate and in this blog, continues to be worth watching:

there are strong arguments that company financial health in 2018 / 19 for the providers will continue to have an outsized impact on the future of LMS offerings.

Both posts linked above described the overall market slowdown – where there has been a significantly lower number of LMS switches – that we first described to our LMS market analysis subscribers just over a year ago and in the blog starting this year. Our updated data over the summer shows no signs of the slowdown ending.

Another issue to consider is not just who is winning and how often, but from the opposite side. Who is losing LMS clients? Let’s first look at the US and Canada for LMS switches since the beginning of 2017, from our report this summer. The left side shows the previous campus LMS, measured by number of institutions, and the right side shows the new LMS.

Blackboard Learn lost the largest number of campuses, followed by Pearson LearningStudio and Moodle, then by D2L Brightspace and Homegrown and Sakai.

When looking at company finances, however, it is important to expand this view. One expansion is to look at global regions beyond North America. Another expansion is to include campus closures as a source of losses in addition to switches. The following chart shows the percentage of decommissions each calendar year in North America, Europe, Latin America, and Oceania combined (but note that North American numbers are the largest portion of these numbers). Decommissions is a combination of switches and closures, and the percentage is calculated on a per-year basis.

We see that two LMS end-of-life situations created by Blackboard acquisitions (where bought their competitor and eventually cut off the product line) were huge factors through 2015. WebCT was acquired in 2006 and shut down by 2013. ANGEL was acquired in 2009 and shut down in 2016.

Blackboard Learn has consistently lost customers since mid 2000s, with roughly 27 – 36% of decommissions each year coming from this solution recently. While Blackboard is the primary beneficiary of the LMS market slowdown, and its improved performance is clearly one of the causes of that trend, when looking at the data it is clear that they are still a big source of LMS losses. Consider their recent loss of long-time clients Purdue University and Princeton University. They also are at risk from several high-enrollment systems expected to complete LMS evaluation processes this year and next.

One of the most remarkable stories in EdTech is that Instructure has not lost a single Canvas higher education client due to an LMS switch. ¹²In terms of primary systems available campus-wide in higher ed. They have lost two K-12 clients to Schoology. But Instructure has lost clients due to campus closures, particularly from Education Corporation of America (two systems shut down) and secondarily from DeVry University (several campuses closed), mostly in 2018.

D2L Brightspace has lost a relatively small number of clients over the years, but their LMS decommissions ramped up in 2018 and 2019, largely due to campus closures. They were particularly hard hit by the closure of Dream Center systems (Art Institutes, South University, and Argosy University, all acquired from the for-profit EDMC).

Moodle has lost a consistent number of clients over the years, particularly in North America, despite it having the largest installed base worldwide. We documented a broader look at the overall changes in Open Source systems recently.

Pearson LearningStudio, formerly known as eCollege, was popular with for-profit chains and with some nonprofit fully-online programs, but Pearson shut down that system by the end of 2017.

Sakai has slowly but steadily lost clients for years, and it continues to do so with recent decisions at the University of Rhode Island and UC Davis, and potentially with several other decisions expected within the next year.

Every LMS provider loses clients, and these losses are important to understand in terms of the organization’s financial health. If you’re interested in seeing more information on the data behind these charts, we have them available with our LMS Market Analysis service.