Posts

Instructure Considering Sale Options

, /0 Comments/by

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.

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

, /4 Comments/by

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 1Disclosure: 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) 2Disclosure, 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.

The Canvas Learning Platform now includes the LMS and Practice and Studio and Catalog.

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.

The Century Foundation on Online Education and OPMs: Position paper masquerading as a study

, /3 Comments/by

The Century Foundation (TCF), a public policy advocacy organization, released a new ‘study’ today about online education and the usage of for-profit service providers such as Online Program Management (OPM) companies. “Dear Colleges: Take Control of Your Online Courses” follows up from the 2017 report loosely based on public records requests for contracts from public colleges and universities. Its intent is clear from the title, as it is hardly a study but more of a position paper against the OPM market in general and tuition revenue-sharing agreements in particular.

As public and nonprofit colleges have sought to expand their online course offerings, a major industry has developed to help them with that task. These private, for-profit developers—including divisions of big publishers, like Wiley and Pearson, and firms like 2U, Academic Partnerships, and Bisk—are known as online program managers (OPMs). They operate on a contract basis, and on terms that endow them with enormous, and, at times, comprehensive control over the services offered in the contracting college’s name. There are downsides to handing over responsibilities to external, for-profit operators—downsides that make the convenience schools receive in return seem a bad bargain indeed.

The Positives

It is valuable that TCF did the legwork to obtain and share 79 new contracts between providers and public institutions, and you can follow links in the report to see a broad range of contracts. OPM, Online Program Enablement (OPE), 3OPM is for bundled service providers including marketing and enrollment services, course and curriculum design, student support, and tech / data infrastructure. OPE is a broader category of enablers that may do a subset of those jobs, often unbundled, but are still directly helping a school develop an online program.LMS, courseware, MOOCs, Continuing Education or Professional Development, and general EdTech – they have them all.

It is also valuable to see TCF’s positions laid out in five warnings to colleges and universities.

1. Don’t Buy Bundled Services

2. Don’t Bypass Your Own Faculty

3. Don’t Sign Lengthy, Unbreakable Contracts

4. Don’t “Share” Your Tuition Revenue

5. Don’t Facilitate Aggressive Recruiting

While items 1, 3, and 4 really just reword the title argument against the revenue-sharing OPM model, items 2 and 5 are worth reading. From item 5:

On average, the universities from whom we’ve acquired contracts share half of their tuition dollars with the partnering OPM, and when that OPM is a for-profit company, as most are, and is also tasked with recruiting, it is incentivized to get as many enrollments as possible. This scenario leads to the same predatory and aggressive recruiting tactics long used by for-profit colleges, but this time under the very different guise of a nonprofit or public university.25

The Negatives

It’s well and good for an advocacy organization to take a position, but for TCF to describe this report as a study is disingenuous. I’m fairly confident that the main points were written ahead of time and are consistent with plenty of TCF advocacy efforts. The data analysis is just there to backup their main arguments and to lend weight to the report and make it feel like an actual study. TCF’s Bob Shireman helped draft the California bills I described a few days ago, where one goal of the bills were to cripple revenue-sharing agreements. He has been a frequent critic of bundled OPM services, long-term contracts, and revenue-sharing. We get it. 4To be clear, I have no problem with his work in this area. I do have a problem when his advocacy leads to harm for the very students the bills are meant to protect and when TCF presents its positions as a study.

If you look at the contracts in the new batch of records released by the report, they are all over the map as described above and often are not directly related to online programs. The LMS category may be a necessary part of the infrastructure for online programs, but at most schools the larger mission is to support traditional face-to-face offerings. The same is true with courseware offerings. And several of the Continuing Education contracts listed have strong face-to-face components. It would have been far better to keep this report focused on the subject – OPMs, OPEs, and perhaps MOOCs and CE / PD companies. Those are the ones that could be argued are relevant to controlling a school’s online courses.

Furthermore, there is a misunderstanding of traditional per-student fixed fees that have long been used by courseware companies, many EdTech companies, and LMS companies (although they tend to use enrollment bands). Tuition revenue-sharing is different, basing itself directly on the revenue brought in by the school with a percentage basis going to the provider.

The TCF report has Blackboard’s contract with Eastern Kentucky University listed as revenue-sharing, but the contract is a standard LMS model. Fixed fees per year based on estimated enrollment bands. The TCF also has courseware contracts with Cengage, MindEdge, Red Shelf, and The College Network listed as revenue-sharing when they are standard courseware versions – fixed fees per student. Two OPE contracts – Smart Sparrow and 352 – are likewise fixed fee per student and not true revenue-sharing. I suspect there are even more cases of false revenue-sharing positives, but I have only have had time for spot checking on this point.

To their credit, the report attempts to focus on those product categories tied to online offerings.

As of August 2019, we received seventy-nine contracts, and of these, forty-one are directly relevant to the management of online courses. These forty-one do not include contracts that only address access to software like learning management systems. Of the relevant contracts, over half (53 percent) entitle the provider to a share of the school’s tuition.

There are two problems here.

  • One is that TCF does not list in their summary spreadsheet which contracts they consider “directly relevant to the management of online courses”. By my hand-coding, I get 14 OPMs, 10 OPEs, 2 MOOCs (and these are not the more-recent MOOC-as-OPM version), and 17 CE / PD, for a total of 43. I’m guessing that my list is fairly close, but who knows.
  • More importantly, these data points are mostly arbitrary, depending on which schools they asked and how successful they were in obtaining public records. Yes, they claim to have targeted schools with large online enrollments, but the data are mixed up between face-to-face and online programs, degree-based and non-degree based programs and courses, and contract years from 2002 to 2019. As a public listing this approach is fine. But to make constant percentage-based claims (53% of contracts, 68% of contracts, etc) implies statistical relevance and is misleading.

There is also a misreading of other reporting, particularly with the story of USC and its School of Social Work. The TCF report states:

Since USC had given over so much control to 2U, it had little control over how the program recruited, or who it enrolled: as revealed by the Los Angeles Times earlier this year, the online social work program admitted students that it was not prepared to provide with a quality education, charging them more than $100,000 for their degree in the process. All the while, USC reportedly lost money on the program, because so much of the tuition went to 2U.

This story is problematic for USC, but the argument made by TCF that the loss of money was “because so much of the tuition went to 2U” is not supported by the source LA Times article.

The university, which has contracted with the company through 2030, said the factors that led to the school’s budget crunch were “much broader” than its relationship with 2U.

“Generally, this partner relationship has been positive,” the university said in a statement. [snip]

There is much to the USC story that deserves further scrutiny, but this claim by TCF is inaccurate or at least unsupported.

Online education and OPM relationships should have greater accountability and transparency, and it is good that TCF has done the legwork to bring contracts into the public view. But it is a mistake to treat this report as anything other than a position paper from an advocacy organization, and a rather poor one at that.

Postscript on D2L Fusion and LMS Market Slowdown

, /by

In O’Neal’s post yesterday he noted that despite D2L’s continuing improvements in its Brightspace LMS and its consistent market approach, we are just not seeing significant market changes.

Our view has not changed. D2L has some good wins lately (including several we expect to be announced in the next two months), but their overall market share is not improving in the core North American higher ed market. Phil will address this point in a separate post.

In interviews at the D2L Fusion conference, company executives essentially stated that their sales pipeline is strong, and they’re not seeing any sign of a market slowdown. These points could use clarifications for those following the LMS market.

Sales Pipeline vs Market Share

For its part, D2L has some recent wins in North American higher education this summer, winning new clients over Canvas and Blackboard and Moodle 5Disclosure: D2L, Instructure, Blackboard, and Moodle HQ are all subscribers to our LMS Market Analysis service. in competitive bids. These wins include the University of Rhode Island (moving from Sakai), Northeastern Technical College (moving from Moodle), and the Nebraska Methodist College of Nursing and Allied Health (moving from Jenzabar). In addition, we are aware of two large system wins (30,000+ students each) moving to D2L that we should be able to confirm within a month of two. I could see an argument of strong sales pipeline based on these wins and potential news ones this fall.

D2L is interesting, however, in that they are both winning and losing clients. Canvas in higher ed has only been winning new clients. Until the recent win with the Galileo Global Education, Blackboard had primarily been losing clients, where the primary question has been how fast these losses occur. Moodle is mostly losing schools or seeing them shift from self-hosting or mom-and-pop hosting to more professional cloud hosting. To get a sense of D2L’s market market wins and losses, consider the following two charts from our January 2019 LMS Market Analysis report show the migration of schools from one system to another during 2017-18.

LMS institutional migrations for 2017 - 18 in North America, showing the previous and current systems.
LMS institutional migrations for 2017 - 18 in Europe & Latin America & Oceania, showing the previous and current systems.

Note that D2L is the second biggest winner of new LMS implementations for both North America (primarily from Blackboard and Pearson) and the combined three international regions we currently cover (primarily from Blackboard and Moodle). But in North America, D2L also had a number of losses – takeaways where schools moved (mostly to Canvas). This year is different in that D2L has stemmed from losing clients to another system. We are finishing our mid-year report and will have more data in August to share.

D2L’s bigger “loss”, however, is the case of campus closures largely due to their wins in the for-profit sector and the Pearson LearningStudio end-of-life. The largest example is the closure of the former EDMC institutions (renamed as the Dream Center after converting to nonprofit status), a 2017 win. The net effect of both types of losses is that D2L is not gaining market share in the global LMS market based on our data, despite being the second-most-selected system for new LMS implementations. We’ll have to watch to see if their recent wins and sales pipeline changes this dynamic.

Market Slowdown

Despite D2L’s statements during Fusion interviews, we stand by our position that there is indeed a general slowdown for academic LMS market, starting last summer and continuing today. We have performed additional analysis for our premium subscribers showing that the slowdown applies beyond North America (it includes Europe, Latin America, and Oceania, with the exception of Blackboard’s recent win with Galileo), and it applies at small, medium, and large enrollment bands of institutions.

Brian Peterson from Raymond James recently downgraded Instructure’s stock based on his company’s data – independent of ours but coming to the same conclusions.

Proprietary checks indicate a meaningful deceleration in large deal activity in the North American higher-ed learning management system (LMS) market in 2018, with a double-digit decline in the number of full-year students, Peterson said in the Monday downgrade note. 

Despite this slowdown, Infrastructure’s Canvas LMS recorded an improvement in win rates in 2018, bagging the majority of large deals in the forth quarter, the analyst said. 

A resurgence in higher ed deals in 2019 seems unlikely given the modest year-on-year deceleration in the deal activity pipeline, Peterson said.

Combined, the two issues of wins offset by losses and the market slowdown clarify the challenges that D2L faces in turning its product improvements and recents wins into meaningful improvements in market share.

Disclosure: D2L, Instructure, Blackboard, and Moodle HQ are all subscribers to our LMS Market Analysis service.

InstructureCon 2019: A study in contrasts

, /3 Comments/by

This year’s InstructureCon LMS users conference was a difficult one to cover, largely due to contrasting messages that I heard – whether from interviews with company executives before the conference or from staff presentations during, whether from large established clients or from smaller or newer clients. On one hand, I was surprised the extent to which I heard about a company on edge, not understanding or knowing how to deal with recent pushback from clients and analysts. On the other hand, I heard from clients who were very happy (if not giddy) about being on Canvas and enjoying the community. 6Disclosure: Instructure is a subscriber to our LMS Market Analysis service.

Overlaying these contrasting views was the presence of investor pressure on the company, best exemplified by activist Praesidium Investment Management, whose public thesis is that Instructure stock would be more valuable if they shed their corporate learning business built around the Bridge LMS and instead focus on their strength in academic markets built around the Canvas LMS.

A lot has changed since last year’s InstructureCon. Dan Goldsmith replaced Josh Coates as CEO, with a mostly new executive team surrounding him (some of these changes pre-dated Goldsmith’s appointment). Canvas overtook Blackboard last summer as the top academic LMS in North America both in terms of institutional adoptions and number of student users, while remaining the fastest growing in much of the rest of the world – they are now more of a market leader than a scrappy upstart. Instructure outgrew the Keystone conference facilities and had to move to a traditional conference center for the first time, and they also moved the Bridge portion of the conference to a separate event in June. There had to be differences in the tone of the conference. The issue is discerning which changes and contrasting messages matter in terms of future company performance.

Product “News”

I put news in scare quotes as Instructure went out of their way to minimize expectations on product announcements and even on roadmap. The company went so far as to cram the main product keynote into the same slot shared by one of the external speakers, leading to a rushed but useful discussion and demo from SVP of Product Mitch Benson and colleagues. I personally could have used more information and less inspiration.

Benson described a redesigned Rich Content Editor (RCE) that includes drag-and-drop capabilities and more intuitive menu items, and they also shared more of their platform vision, emphasizing the importance of MasterConnect and Portfolium acquisitions. The long-delayed Quizzes.Next was briefly mentioned, with the current roadmap targeting full production (ready to become the default quizzing engine and replace the original tool) sometime next year as shown in the Canvas Community page.

As I have described before, Quizzes.Next is late. After being announced in summer 2016 with promises to be “made available to you over the course of the next several months”. It is now two years later, and the chart above shows, the product won’t be fully ready until 2020.

This update captures some of the contrasting messages. Besides executives being on edge, there is also some confusing messaging around Quizzes.Next. When I asked during interviews about this tool’s progress, I got a concerning answer talking about Instructure not ever promising to offer feature parity with the previous quizzing engine. Whatever the case of previous promises, I know that there are a minimum set of features that Instructure must deliver for true replacement of the old quizzing tool. Informal conversations with clients at lunch and outside of sessions seemed to confirm that this replacement is indeed in the future and not here today.

On the positive side, however, I think the current chart and roadmap appear to be realistic, and what seems to be most important about Quizzes.Next is not at the feature level. The bigger news is the re-architecture into a more scalable and more accessible toolset – mostly happening behind the scenes. Instructure is investing in Canvas, and much of that investment is along these lines of modernizing and making systems more accessible, supporting assistive technologies through out.

Below are some of the key product updates to Canvas coming out this year.

Canvas product updates planned for this fall - several around New Quizzes (aka Quizzes.Next) and the beginnings of Assignment tool changes.

Data, Data, Data

The most significant product news continues to be the evolving description of their Data, Analytics and “Dig” plans (scare quotes here and below as Instructure folks keep saying the name will change but no replacement name has been shared yet).

Data, Analytics and "Dig" header

Instructure started re-investing in data & analytics work over two years ago after initial phase of work in the 2013 – 15 time frame. The primary result from the earlier efforts was Canvas Data – the ability for schools to access data from the LMS and do their own data analysis work – along with several visualizations that were lightly used by faculty. During this year’s InstructureCon there were several schools (e.g. UC Berkeley, Stanford, and Seminole State College) presenting their own analysis tools and results – mostly basic analysis of grades and participation measured by discussion posts, assignments, and page views. While these stories largely were not sexy or truly innovative, per se, it is interesting to see real schools consuming data and figuring out how to improve their student success initiatives.

The biggest product showing for the whole conference was the new Analytics tool in Beta (schedule for full release by the end of the year).

View of Canvas Analytics in beta, showing faculty view of a course with drill down into one assignment.

The focus of this tool is to improve faculty visibility of student performance within courses, with ability to compare results (e.g. section to section, or even section to student) or to drill down into specific assignments or students, as shown in this video.

Live demo during InstructureCon 2019 of Analytics faculty view

Beyond the Analytics tool, “Dig” is touted as a set of AI and machine-learning tools (or products to be sold separate? the details are not clear) with the goals of:

  • Help faculty and staff gain deeper insights into student success
  • Help institutions support best practices in usage and course design
  • Help students stay focused and succeed

The only tangible example of Dig mentioned at the conference was a nudge system to be released later this year where the machine learning is to build a profile of each student using their historical course data – not just the current course. The idea is to better understand individual student habits to let the system know whether, when, and how to send a nudge about a late / missing assignment or poor course performance. I’ll have more to share on this subject in a separate post.

Contrasts

The reason that the issue of contrasting messages matters is that it takes thick skin to stick to a strategy while also understanding pushback coming from analysts or customers. I have talked to several schools who are frustrated that it does not appear that Instructure executives fully hear what they are saying about delayed or missing functionality, or are concerned about company direction in data & analytics or consistent customer service. And when I or Jeanette asked questions in interviews, we got some answers that were almost dismissive of the unique challenges around educational data usage, or sounded like mischaracterizations of customer sentiment. That matters, especially in a company like Instructure, as I described two years ago:

While Canvas is a market-changing platform, that is not really Instructure’s primary strength. Instructure as a company is the real strength.

But Instructure’s competitors should not pop the champagne yet. Even for the frustrated clients, I am not aware of any who are thinking about leaving Canvas, and the company’s win rate for new LMS implementations has not dropped. The current re-architecture of Canvas to improve scalability and embed accessibility support throughout is making Canvas a better platform. And I heard many examples backing up Goldsmith’s claims that investment in the Canvas product is increasing.

There’s a lot to watch here. Instructure is the market leader in the academic LMS space and continues to perform well. It will take some time to see if the contrasting messages I heard will adversely impact the company’s future or if their company culture will continue to prove their biggest advantage.

Disclosure: Instructure is a subscriber to our LMS Market Analysis service.