Posts

Purdue University Answers Questions on Purdue-Kaplan OPM Contract

, /0 Comments/by

On Monday I shared a post “Purdue University’s System-wide OPM Contract With Kaplan Higher Ed“ that was based on a public records request. In the post, I described a list of questions I had for Purdue University. Similar to the handling of the post on Purdue Global’s financial losses from the first year of operations, the university spokesperson provided welcome answers to the questions.

I am going to share Purdue’s response in full and then provide some initial thoughts below.

Purdue University Response

In this section, the original questions are in blue italics, and Purdue’s commentary is in quotation below each quote.

“The Kaplan agreement (the one for OPM services outside of PG) is significant. Can you describe how Kaplan was selected as your institution-wide partner? In other words, was there a competitive process, or was this tied to PG contract, or some other decision process?”  

Kaplan Higher Education (KHE) was selected as a provider of basic services because it made sense to do business with a partner with whom we had a long-term relationship (via PG) and who had a shared interest in cultivating online offerings that would cater to different needs in a cohesive and logical fashion. One of the key reasons for acquiring Kaplan University in the first place was to obtain rapid and ready access to online support expertise, as opposed to trying to build it in-house. Since KHE has that expertise, they were a logical choice to turn to for similar functions on Purdue Online’s behalf.

Even still, the agreement with KHE is not exclusive. KHE currently serves five non-PG online offerings for Purdue, but there are a greater number that are not being served by KHE, including legacy programs with other OPMs, programs that Purdue self-services or directly sells to a customer for workforce development, and small niche programs.  

“Which university groups have been briefed on the agreement and its implications?”

All colleges are aware of the options available to them as they develop and grow online programs.

“I was surprised that the entire section on distribution waterfall was redacted. Can you describe how the mechanics are different than PG waterfall (don’t need specific numbers like rates or rev share percentages)?”

The terms were developed through separate negotiations, but in general, the waterfall operates in a similar fashion: program revenue is distributed first to cover all program costs incurred by Purdue and KHE before any fee to KHE is paid. KHE is only paid a fee if all program costs of Purdue and KHE have been covered and if cash remains to pay KHE’s fee. Any residual revenue after that accrues to Purdue. To the extent there are differences between the two agreements, they likely stem from the fact that online programs being developed by Purdue are more in their infancy stage and the potential benefits of an OPM to a new program are different than those of an established program.

“How many programs outside of PG are using Kaplan for OPM services now that the contract is a year old?”

Five with a few more in the works.

My Commentary

Like the response on Purdue Global finances, this response from Purdue is quite helpful in filling in gaps in the public record. Given the increasing importance of the OPM market, and given the importance of institution-wide online strategy, it is important that other schools (and even for-profit companies) understand what is happening with this high-profile initiative, and to understand it accurately. I will share additional thoughts on this contract and what it means for Purdue and for the OPM market in a future post. Below I will just add some initial thoughts on the specific answers provided.

The Purdue response on how Kaplan was selected as an OPM provider addressed why Purdue perceived the need for an outside provider vs. using in-house resources, and they mentioned the explicit connection with the Purdue Global agreement. But what this situation means is that no, there was not a competitive evaluation for an institution-wide OPM partner with 30-year contract term and “limited exclusive” status. That is remarkable to me – making this big of a decision without any market evaluation or competition involved.

Purdue’s response mentions online programs not using Kaplan, but that somewhat misses the point. The contract listed named pre-existing exceptions to the agreement. Purdue has chosen to redact the information on the mechanics of how programs may end up using or not using Kaplan (section 4.1.1), but this is not a case where each program (or department, or college) can just pick who they want with no strings attached. This is an institution-wide strategy and approach with a “limited exclusive” partner.

Purdue’s response also seems to confirm that the contract decision was made by a small group of people without broad campus involvement or even information-sharing before decisions were made. What I believe the answer “All colleges are aware of the options available to them as they develop and grow online programs” implies is that this fait accompli has been communicated to individual college leadership (deans and staff) for decisions moving forward. Essentially a notification rather than a discussion.

The Purdue response on the financial structure is useful and confirms the hybrid approach. First, pay direct costs from Purdue as well as fee-for-service due to Kaplan. Second, look at net revenue to determine if Kaplan also received a revenue-sharing percentage (what I believe is meant by “the fee”). Third, accrue residual revenue to Purdue. Much of the discussion on the OPM market refers to a false binary between revenue-sharing and fee-for-service without recognizing the significant trend of hybrid revenue structures such as used in the Kaplan contract.

Time permitting, I’ll add some overall thoughts in a future post. For now, I’d like to thank Purdue University again for answering questions on this important topic.

Purdue University’s System-wide OPM Contract With Kaplan Higher Ed

, /3 Comments/by

Purdue University made its big announcement in Spring 2017 about the agreement to acquire Kaplan University and turn it into what is now known as Purdue University Global. Purdue further made news one year ago by announcing a centralized office to coordinate all online activities of the system – Purdue Online. What has not been made public is that Purdue also signed a Master Services Agreement one year ago with Kaplan Higher Education (KHE) to make it effectively a system-wide Online Program Management (OPM) vendor for online programs across all four campuses.

Historically OPM partnerships were program-specific, made with little oversight in a period that has been called “deans gone wild”. As online opportunities expanded and the OPM market grew, there were cases of multiple OPM contracts within the same institution, either a mix of OPM providers, multiple programs using the same OPM provider, or a mix. This trend towards centralization, or coordination, is now leading to institution-wide OPM contracts. This Purdue – Kaplan agreement represents perhaps the most significant case, while 2U’s recent agreement with the University of North Carolina represents another. Thanks to a public records request, we can get a much better understanding of this new OPM model.

Continuation of a Vision

While this institution-wide OPM contract has not been made public before today, there have been hints that this move might happen, including Purdue president Mitch Daniels’ presentation of the Purdue Global case to state officials in 2017.

The deal, Daniels contends, puts Purdue in line to get access to Kaplan’s online infrastructure, allowing the university to leapfrog its virtual campus efforts much more quickly than if it had tried to develop one on its own.

If we jump forward to December 2018, Purdue officials received approval from the Purdue Board of Trustees to establish Purdue Online as a new organization. As described by Inside Higher Ed a year ago:

“It’s a shift from a college-level strategy to a Purdue-level strategy,” said Frank Dooley, Purdue’s senior vice provost for teaching and learning. “We’ve kind of been drinking from a fire hose in the last year.”

Purdue’s vision for its online programs, according to administrators, preserves distinctions between traditional Purdue and its former for-profit extension while taking advantage of overlapping goals and complementary offerings. Online education observers will be tracking Purdue as a potential new collaborative model settles in. And Purdue’s faculty — portions of which bristled at Purdue’s handling of the Kaplan acquisition — will be watching closely and warily.

Not mentioned with the announcement of Purdue Online, however, was that the university signed a Master Services Agreement – dated January 1, 2019 – with Kaplan Higher Education. This contract gives Kaplan essentially the right of first refusal to be the OPM partner for online programs across the system.

The Services

The services to be provided are separated into basic and enhanced (pp 2-3), where basic is the minimum set of services to be provided and enhanced are optional services.

2.1.1 Basic Services. In general, at a minimum, KHE shall provide the services set forth on Exhibit A uniformly to each Purdue online Program that is the subject of a SOW hereunder (the “Basic Services”).

2.1.2 Enhanced Services. In addition, for a given Program covered by a SOW, KHE may also provide: (a) any of the additional services set forth on Exhibit B hereto that are selected by Purdue and the relevant Purdue Unit, to apply to that Program, by mutual agreement, and (b) any other support services not specifically described on Exhibit B that the Parties may mutually agree to include with respect to that Program (collectively, the “Enhanced Services”).

The Basic Services and the Enhanced Services are referred to herein collectively as the “KHE Managed Services”.

Exhibits A shows the basic services that include program and portfolio strategy, student recruitment, and reporting and analytics.

Basic services description

Exhibit B shows the enhanced services that can include, well, almost anything to be done in an online program. Including teaching and delivery. Everything except application decision and admissions policy.

Enhanced services

Kaplan is now the limited exclusive provider of program services for Purdue’s online initiatives (p 5):

During the Term of this Agreement, KHE shall be the “limited exclusive provider” of Basic Services for all new online Programs developed and launched by Purdue Units during the Term, other than with respect to Program Exceptions.

This contract has reversed the dynamic of an OPM being selected for a program. KHE is now the provider for all online programs unless they are listed as an exception in the contract, or in the case that Purdue and Kaplan mutually agree to not work together on a program.

Exclusivity and Non-Competition

In section 6.2.1 on p 6, the contract specifies that for any new statement of work (SOW) governing a specific online program, Purdue may not use another vendor for similar services.

. . . KHE shall be deemed, in addition to its status described in Section 6.1, the “exclusive and sole provider” of the KHE Managed Services described in the SOW with respect to that Program, such that Purdue shall not enter into any agreement or arrangement with a third party to provide services similar to those covered by such SOW for the purpose of supporting the same Program offered by the same Purdue Unit via an alternative online channel or platform, unless KHE has elected to waive exclusivity in writing in such SOW.

Furthermore, Purdue has agreed to not allow programs to compete with each other (section 6.2.2 on p 6).

6.2.2 Additionally, once a SOW is entered into hereunder and remains in effect for a given Program, Purdue shall not do either of the following, unless, in either case, KHE has elected to waive the relevant restriction in writing in such SOW:
6.2.2.1 Enter into any agreement or arrangement with a third party to provide services similar to those covered by such SOW for a Purdue Unit’s proposed offering of an online program that is the same as or Substantially Similar to the Program covered by such SOW, or
6.2.2.2 Directly undertake the development, launch or promotion of any online program that is the same as or Substantially Similar to the Program covered by such SOW.

For purposes of this Agreement, Program(s) are considered “Substantially Similar” if they (i) compete for the same student population, (ii) result in the same credential level or degree (e.g., AS, BS, MS, PhD or other), and (iii) have the same six digits of their CIP Codes (as defined in Exhibit D).

Redactions

What is almost as interesting as what the contract says is what Purdue University chose to redact as part of the public records request.

One example is section 4.1.1 (p. 4), which describes Purdue’s obligations on which programs that Kaplan has the exclusive right to bid upon and the mechanics of how this limited exclusive provider works out in practice. I am not sure how this is considered a trade secret or confidential information.

Redacted section 4.1.1

Another example of redactions is the mechanics of payments. It is perhaps not surprising, however, that Purdue chose to redact the entirety of Exhibit F, which describes the “distribution waterfall” of how Kaplan gets paid. In the case of Purdue Global, the waterfall is mix of fee-for-service and revenue sharing provisions, with defined priorities of which party gets paid first, second, etc based on program revenue. None of this information was shared in the response to the public records request. I could see redacting specific revenue sharing percentages, but the basics of the distribution waterfall should be a public Purdue issue, not a proprietary Kaplan issue.

Net Effect

The net effect is that Kaplan has an institution-wide OPM contract for almost all of the system’s online offerings moving forward, with Kaplan provided exclusivity and non-competition status. I do not believe that any of this information has been competitively bid or shared with the university community, and it certainly has not been described publicly.

I have requests out to both Purdue University official channels and with several faculty member on the following. When I get answers from Purdue I will share an update.

  • The Kaplan agreement (the one for OPM services outside of PG) is significant. Can you describe how Kaplan was selected as your institution-wide partner? In other words, was there a competitive process, or was this tied to PG contract, or some other decision process?
  • Which university groups have been briefed on the agreement and its implications?
  • I was surprised that the entire section on distribution waterfall was redacted. Can you describe how the mechanics are different than PG waterfall (don’t need specific numbers like rates or rev share percentages)?
  • How many programs outside of PG are using Kaplan for OPM services now that the contract is a year old?

The Master Services Agreement

I have further thoughts on this agreement, what it means for Purdue, and what it means for the OPM market. But I will leave this commentary for a future post while waiting to see if I can get answers on some of the questions above.

I appreciate Purdue University’s timely response to the public records request. You can download the MSA here or view below.

REDACTED-TS-PURDUE-KHE-MSA-2019-Signed-Copy-2-5-19_Redacted-1

Postscript on Purdue University Global Post

, /1 Comment/by

After my Sunday post “Purdue University Global Loses $43 million in First Full Year Since Kaplan Transfer“, a spokesperson from Purdue University contacted me and provided commentary on several points made in the post. I welcome this clarification, especially as it helps explain the $90 million line item on non operating revenue and whether that is relevant to long-term Purdue Global financial viability. In short, that revenue is relevant, and therefore it is best to interpret the loss last year as $43 million and not $133 million.

I am going to share Purdue’s response in full and then provide my thoughts below.

Purdue University Response

In this section, quotes from my original post are in blue italics, and Purdue’s commentary is in quotation below each quote.

“Strictly speaking, the $43 million number is most relevant for this year, but this amount obscures the effect of one-time or short-term payments from Kaplan that were part of the initial agreement. In other words, the operating losses matter from a long-term viability perspective.”  

This is false. Payments from Kaplan have no impact on the profit and loss and even if they did, they occurred last fiscal year not this one. 

Additionally, “operating losses” are constrained by some accounting rules and they are only one part of Purdue Global’s financial picture.  Due to accounting rules, virtually every university in the country reports an “operating loss” and so the reported number is an insufficient and misleading measure of “long-term viability.” 

However, you do raise an important question regarding what was in the $43 million number?  That included a deliberate one-time, $28.5 million marketing investment as we launched a new university brand.  It also included $9 million in accrued but unpaid KHE fee that won’t need to be paid until the cash flow is positive.  Only $5.5 million was a loss from operations. 

“What is not entirely clear is the breakdown of $90 million in Non-Operating Revenues. Purdue University Global is a public institution, but it does not receive state funding. I believe this revenue includes $30 million in transfers from Kaplan’s parent company, Graham Holdings, that was defined as part of the initial 2017 agreement.” 

This is false.  The $90m is tuition and fee revenue from Pell grants plus a small amount of investment income and gift revenue.  It’s only classified as non-operating due to accounting rules. It’s clearly revenue from student enrollments, not transfers from Kaplan.

“The Purdue – Kaplan deal was never popular among Purdue University faculty and last spring there was an interesting debate in a local paper between three faculty members …”

This is an overgeneralization, especially following our work on campus to dispel myths and to explain the opportunity.  There will always be some vocal critics, but the University Senate is in a much different place than it was a few years ago in regard to Purdue Global. Over the last year, the Senate declined to take up a resolution critical of Purdue Global.  A special ad hoc committee established by University Senate to study a variety of issues related to Purdue Global has effectively disbanded after concluding that any concerns had been addressed.  In addition, faculty from at least four Purdue West Lafayette colleges are now engaged with Purdue Global to offer new educational offerings through the new online university.

“I am not sure the difference between the following numbers (around 29k) and the IPEDS numbers reported by Purdue (see above, around 36k), but nevertheless the following updated numbers indicate a new steady state of enrollment.” 

IPEDS has some unique requirements for Purdue Global since it’s on a quarter system.  The chart you chose is ours and was correct at the time and an easier way to look at the data.  The most up-to-date, year-over year comparison looks even better with enrollment growth from 2018 to 2019.

Updated Purdue Global enrollment numbers for calendar year 2018 and 2019, showing an increase of 5%.
source: Purdue University updates using October 2018 and October 2019 census dates

“… but for now it is not apparent that Purdue Global will be financially viable.” 

Purdue Global had $45 million cash on hand at the end of FY19.  The deficit in FY19 was primarily driven by one-time strategic start-up investments, particularly brand marketing and the development of some new programs that align with Purdue’s strengths and competitive advantages.  For FY20, we have every expectation that Purdue Global will generate an operating surplus.

My Commentary

This response from Purdue is quite helpful in filling in gaps in the public record. Given the importance of Purdue Global, it is important that other schools (and even for-profit companies) understand what is happening with this high-profile initiative, and to understand it accurately.

In particular, the most important clarification is that the “$90m is tuition and fee revenue from Pell grants plus a small amount of investment income and gift revenue”. Additionally, it is useful to see details on the “deliberate one-time, $28.5 million marketing investment” and “$9 million in accrued but unpaid KHE fee that won’t need to be paid until the cash flow is positive”.

In my opinion, the majority of the $90 million non operating revenue is relevant to operations, meaning that the $43 million loss (and not $133 million) is applicable. I disagree, however, with the statement that “only $5.5 million was a loss from operations”.

The $28.5 million marketing investment does NOT imply that Purdue Global spent only that amount on marketing and will not need to in the future. What it means is that based on internal budgeting Purdue Global spent $28.5 million more than what they believe is a steady state marketing level, and that they believe they can go back down to steady state marketing in FY2020. For perspective see this Purdue Exponent article.

According to the May 2 SEC filing, Kaplan will assist PUG in areas including admissions support, technology support, marketing services and international and domestic student recruitment. The filing does not cite expected costs of those services, but according to a fact-finding team from the Higher Learning Commission, Purdue representatives estimated the cost of KHE’s “back office services” to be about $200 million in addition to an estimated $100 million to be spent on marketing. The Higher Learning Commission’s report was published earlier this year.

If accurate, this information indicates that Purdue Global likely spent more than $130 million on marketing in FY2019.

As the chart above and my original post showed, Purdue Global seems to have slowed down or even reversed the enrollment declines of Kaplan University (good for them), but the additional marketing spend was clearly a key part of this change. The total marketing spend, even the amount above steady state, is very relevant to operations.

Furthermore, the accrued but unpaid KHE fee of $9 million is also relevant. The liability has not gone away, it is part of annual operations, and (assuming PG becomes cash flow positive) due to Kaplan Higher Education in the future.

Purdue’s claim about me overgeneralizing that the “deal was never popular among Purdue University faculty” is a fair point, but in the same way I challenge their brushing off of faculty complaints as “myths” and “some vocal critics”. It would be interesting to survey the Purdue faculty on this question to get a better sense of support, but that is not in the cards (at least as public information).

All in all, this is a valuable update from Purdue University. Looking forward, the final statement Purdue provided is the one to watch – “For FY20, we have every expectation that Purdue Global will generate an operating surplus”.

Purdue University Global Loses $43 million in First Full Year Since Kaplan Transfer

, /2 Comments/by

Update 7 Jan 2019: Purdue responded to this post and answered some questions raised below. See follow-up post “Postscript on Purdue University Global Post“. I have adjusted the text below on the new information on non operating revenues.

One of the biggest stories in postsecondary online education in the past few years was the partnership between Purdue University and Kaplan University, where KU was transferred to Purdue and rebranded as Purdue University Global under a 30-year contract. The high-profile move, announced in March 2017 and finalized in April 2018, converted the 30k+ university from a for-profit into a public nonprofit under the Purdue brand while turning Kaplan Higher Education into a single-client Online Program Management (OPM) vendor.

Last year it was reported that Purdue Global was losing money, almost $16 million in the partial year (Purdue’s fiscal year starts on July 1st), and now we have more recent data.

Financial Report

Based on the latest Purdue University Financial Report provided to the Board of Trustees in October 2019 and approved in December, Purdue University Global had $133 million in operating losses and $43 million in net position losses in its first full year of operation. Strictly speaking, the $43 million number is most relevant for this year, but this amount obscures the effect of one-time or short-term payments from Kaplan that were part of the initial agreement. In other words, the operating losses matter from a long-term viability perspective.

The financial report describes its separation of Operating Revenues and Non Operating Revenues as follows (p. 15):

Revenues are classified for financial reporting as either operating or nonoperating. Operating revenues are generated by providing goods and services to our students and other important constituents of the University and include tuition and fees, grants and contracts, and sales and services. Tuition and fees and housing revenue assessed to students are reported gross, with the related scholarship allowance presented separately. Nonoperating revenues are those received by the University without providing a corresponding good or service and include our state appropriations, investment income, and private gifts.

The July 1, 2018 through June 30, 2019 statement of activities (p. 77) shows the revenue and losses. The key numbers are in the Loss before Other Revenues line.

Financial Report 2019 shows increasing losses for Purdue Global

What is not entirely clear is the breakdown of $90 million in Non Operating Revenues. Purdue University Global is a public institution, but it does not receive state funding. I believe this revenue includes $30 million in transfers from Kaplan’s parent company, Graham Holdings, that was defined as part of the initial 2017 agreement. But I have to admit that I’m not sure here, and I can find no public reporting to better explain the numbers.

Falling Enrollment

It should not be surprising that Purdue University Global is losing money, as Kaplan University was already losing enrollments like most of the for-profit sector. Looking at IPEDS data from Fall 2012 through 2018, I have combined all of Kaplan University and Purdue University Global campuses into one institution and showed on the same chart as other large online enrollment institutions. The data show a persistent drop in enrollment since 2014, although the losses may be slowing.

IPEDS data 2012 - 2018 highlighting Kaplan / Purdue Global enrollment dropping from 2014 through the last reported year.

Administration Statements

The Purdue – Kaplan deal was never popular among Purdue University faculty, and last spring there was an interesting debate in a local paper between three faculty members and the Purdue CFO, Bill Sullivan (there is a good summary by Derek Newton in Forbes). In Sullivan’s response to the faculty members’ initial letter, he described the initial losses and expectations moving forward.

While it is true that, in its first year of operation, Purdue Global invested more in startup costs than it offset by revenues, this was a deliberate strategic choice and was, importantly, prefunded by Kaplan Higher Education through the assets it brought to Purdue at acquisition. It is important to note that Purdue Global had more than $66 million in cash at the end of 2018 – a far cry from “bleeding the system dry.”

Another important consideration is that under the acquisition’s terms, Purdue is guaranteed payments of $10 million a year for the first five years. These funds could be reinvested at Purdue Global or they could even be shifted to other areas of Purdue, potentially including the regional campuses. Again, that is a far cry from “bleeding the system dry.”

But perhaps most important is the fact that Purdue has the first claim on any revenue Purdue Global takes in. Recall that Purdue owns and runs the university while Kaplan is reimbursed for its expenses in providing various back office support services as marketing, human resources, admissions and information technology. In the waterfall of cash flow, the last to get paid will always be Kaplan and the first will always be Purdue. That is, as money comes in, Purdue’s side of the operating costs and its $10 million priority payment are paid first.

This is an important point because I expect elevated startup costs to continue into 2019 and more modestly in 2020.

There are signs, also from Board of Trustees report from October, that the enrollment has stabilized since Fall 2018. It is worth noting that Indiana offers a 45% tuition discount to state residents in undergraduate programs at Purdue Global, and that Purdue employees can attend for free. I am not sure the difference between the following numbers (around 29k) and the IPEDS numbers reported by Purdue (see above, around 36k), but nevertheless the following updated numbers indicate a new steady state of enrollment.

Slide from Purdue report to board, showing total enrollments at Purdue Global 2018 - 2019.

Kaplan Higher Education as OPM

Due to the Purdue deal, Kaplan Higher Education changed from a for-profit set of institutions into an OPM provider. In their most recent earnings release, the Kaplan Higher Education division of Graham Holdings showed $238 million in revenue in the first nine months of 2019 from Purdue University Global (I believe Purdue represents the vast majority of this division’s activities), based on p. 28.

Extrapolating this number for a full 12 months, Kaplan HE as an OPM is likely making close to $315 million in revenue from the Purdue agreement, out of Purdue Global’s roughly $437 million in operating expenses. While Kaplan’s case is unique, that is still a large OPM operation, especially from just one client.

Note that the fiscal years of Purdue and Graham do not align, so use these numbers as a rough estimate.

Termination Clause

There is one other item worth mentioning here, in that the original Transition and Operations Support Agreement (TOSA) between Purdue and Kaplan had a clause for either side to terminate the contract based on financial losses. I am not suggesting that either side is considering this option based on the current losses, but it is worth remembering this option. From p. 26 of the TOSA:

Either Party shall have the right to terminate this Agreement in the event that New University generates $25 million or more in annual Cash Operating Losses for three (3) consecutive Fiscal Years, or incurs, during any period of the Initial Term, aggregate Cash Operating Losses greater than $75 million (taking into account gains during such period) (either circumstance being called a “Triggering Loss
”).

Where (p. 2 of Exhibit A):

“Cash Operating Losses”, for any Fiscal Year, means the amount by which: (a) the sum of: (1) the Academic Costs plus the Support Costs incurred in such Fiscal Year, plus (2) $10 million for each of the first 60 months following the Effective Date, exceeds (b) the total Revenue earned by New University in such Fiscal Year.

I believe the “Cash Operating Losses” for any year refers primarily to $43 million. Essentially $43 million plus the annual $10 million priority payment, or $53 million for this year. Clearly this exceeds the clause (i) above for the first year.

More to Come

Enrollment at Purdue Global appears to be improving, but at what cost? There are some real one-time revenue items obscuring the true financial state of Purdue Global, and the enrollment stabilization includes free or reduced tuition offers. I’d like to see details on the $90 million in nonoperating revenues as well as some breakdown of expenses, but for now it is not apparent that Purdue Global will be financially viable.

As it turns out, however, there is a lot more to the Purdue – Kaplan story beyond Purdue Global, as I’ll share in an upcoming post.

Institutional Decisions on OPM Market: Upcoming discussions on complicated questions

, /by

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.

Online Program Management: An updated view of the market landscape for 2019

, /2 Comments/by

Yesterday I had the opportunity to share an updated view of the Online Program Management (OPM) market in a webinar with WCET. There were too many questions to fully address during the session, and we are planning a joint blog post to address additional questions over the next week.

You can view the recorded webinar at https://youtu.be/uMSa3lEn_4I or at the embed below the graphic.

We have a session planned for the annual WCET conference in Denver in early November. We’d love to see you there and continue the conversation in person.

Updates since 2018

As part of the webinar I released an updated graphic of the OPM landscape, taking a broader view of this growing but dynamic market. Since the last version shared a year ago, I added a new sub-category of vendors, for-profit conversions, to capture the Kaplan (Purdue Global) and Grand Canyon Education (GCU) with its recent Orbis acquisition. I expect this group to grow, as Bridgepoint Education (Walden U) is seeking approval to make similar changes.

Some other enhancements to note:

  • The business model axis makes it more clear that there is a range of options between Tuition Revenue Share and Fee for Service.
  • 2U now shows its acquisitions of GetSmarter and Trilogy, while also add its investment and partnership with Keypath. I also am showing the entry into the bachelors degree market the London School of Economics and the more recent Institutional Suite.
  • Wiley shows its acquisition of Learning House.
  • I have adjusted the sampling of fee-for-service vendors based on market activity.

Fall 2019 Graphic

As before, please note that this view is intended to give a visual overview of the market landscape and is not comprehensive in terms of vendors represented. This is particularly true as you approach the bottom of the graphic.

Market landscape of OPM vendors, showing business model from revenue sharing to fee-for-service on vertical, and credential from degrees to certificates on horizontal.

The webinar covers additional context around this graphic.

(Source for video: https://youtu.be/uMSa3lEn_4I)

Expect more coverage soon on the OPM market and the broader world of online and hybrid education.

Update 9/28: Mentioned that 2U’s entry into bachelors degree market started with London School of Economics, which pre-dated the Institutional Suite announcement.