October 26, 2014

More on the acquisition of Blackboard

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Boyd, R. (2011) Blackboard: A Tale of Two Companies Seeking Alpha August 29

Farmer, J. (2011) Investment bankers and Blackboard’s future, Part 1, If…. e-Literate, July 2

Back in July, I wrote about the implications of the then potential acquisition of Blackboard by a private equity company, referring to Jim Farmer’s market analysis.

Now another financial analyst, Robby Boyd, has issued a scathing critique of the financial status of Blackboard. Whether or not you agree with his analysis, he provides some interesting comparative figures about the pricing of Blackboard license fees.

Blackboard’s fees are often negotiated individually with each institution and vary depending on the level of service and functions/tools provided, but Boyd estimates costs for higher education institutions in the range of $20-$30 per student per year for Blackboard users, with more towards the lower than the upper end of the range. However it’s difficult to know how reliable his figures are.

Boyd’s point is that Blackboard charges much more for US military contracts than for higher education, and that Blackboard’s profit comes primarily from the large, high-cost contracts with the military. He also argues that Blackboard’s share of the higher education market is rapidly diminishing, citing a large number of major higher education institutions ‘who have announced plans to quit Blackboard.’ (This certainly reflects a trend in my own province, British Columbia, where now only three out of 24 or so post-secondary institutions are now using Blackboard.) Boyd argues that

The reasons for this exodus are naturally varied–and include pricing–but for the most part, however, they boil down to dissatisfaction with a nearly decade old software framework seen as, well, obsolete.

In particular, he argues that newer products, such as Instructure, make better use of new technology developments such as social media. What Boyd underestimates though is the inertia in higher education institutions which are often reluctant to upset faculty by making radical changes in online software which, at least in the short term, means more work learning a new tool, and possible snafus when the first courses on the new platform open.

Where does this leave institutions wanting to make a decision about learning management systems? Apart from increasing their unease if they are Blackboard users, probably not much better placed. In the end what really matters is how institutions and in particular individual faculty want to teach. Any LMS can probably do the job.

The real question is whether you need an LMS at all, given the range of tools now available. My own view is that LMSs do provide a useful way to organize teaching materials, but the more they enable the easy integration of other tools, the more likely it is that the quality of teaching, in terms of student engagement and participation, will increase. Frankly, without a major re-design, this leaves Blackboard at a disadvantage, so the question is, will the new owners invest in a better product, or will they look for a quick exit?

Comments

  1. Inertia in higher educational institutions is THE SINGLE factor that would determine the future of all learning systems – LMS, Web 2.0 et all.

    On a different note, it may make sense for institutions to experiment with flexible Web 2.0 tools that can keep the learning informal and thus engaging.

  2. Tony

    Some interesting thoughts. I agree that higher education has a long transition time to change. I also share the view that a learning platform must be able to integrate well with tools to be successful, and that the best learning platforms will allow best of breed learning tools and systems to flourish with them providing student names/authentication and other glue.

    You might be interested with this interview with Ray Fleming of Microsoft (see http://blog.sharepointlearn.com/2011/09/08/sharepoint-best-bred-for-education/) who argues that SharePoint could be that system – obviously from Microsoft so not unbiast, but an interesting perspective.

    John

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