Blackboard Inc.: The Rise of the New “Online Learning” and the Race for Profits

In organizing the resignation of University of Virginia President Theresa Sullivan, Rector Helen E. Dragas may have expressed the concerns of many higher education boards of directors about the impact and effective use of education technology. Other Presidents and Chancellors may now have a similar career-threatening incentive.  History in technology suggests a wave of implementation of “online courses” will follow when decision-makers are presented with similar press enthusiasm for a technology.

In April Silicon Valley venture capital firms Kleiner Perkins Caufield and Byers and New Enterprise Associates invested $16 Million in a Silicon Valley start-up called Coursera.  Three months later Coursera announced they had signed up 15 new university partners. An extra $3.7 million was invested by the California Institute of Technology, University of Pennsylvania, Stanford University and other partners.

Reading through the 50 plus enthusiasitc articles listed on the Coursera websites from the general and trade presss, one might get the impression that the company had invented eevery aspect of online education. The writers failed to credit the successful work of others—the Open Universities and the telecourse- veteran community colleges that have enrolled millions in quality online courses and projects at traditional colleges and universities.

However, as Avron Barr, a Silicon Valley business consultant and life-long ed tech enthusiast, noted after attending a Coursera briefing at Stanford said: “They’ve combined and improved features in pedagogically significant ways. More importantly, their offerings are being shaped by a new vision of the role of online courses in higher ed. We are no longer talking about web-based activities supplementing textbooks and lectures in a classroom-based course. If classrooms are used at all in these courses, they just supplement what is happening online.”

Chronicle of Higher Education reporter Jeff Young reporting on the Coursera “massive open cookout” quoted “[Lead venture capitalist L. John] Doerr as follows: ‘I think this could be big the way Google was.’ ‘It’s doing something very, very valuable for free, so it’s going to scale to be enormous.” And, if successful, very profitable for Doerr and other investors.

In less than two months big-name college and university executives are moving quickly to implement online learning, venture capital is available for start-ups, and learning technologies are being combined into learning systems. All expect a business model to emerge, likely the Kirschner model.

Where does that leave Blackboard?

In July last year Tech Crunch’s Rip Empson observed: “Yet, both because Blackboard got a head start on the market and has become fully entrenched in universities and across secondary education systems and because its user experience has left room for improvement, many education start-ups have popped up with their own models aimed at snatching up some of Blackboard’s market share, like CourseKit, Instructure, Nixty, to name a few.” Today he would add Coursera, edX, and Udacity; all are building new platforms. The University of California Berkeley is contributing an open-source platform call CourseSharing to edX.

Reviewing data from the companies acquired by Blackboard owner Providence Equity Partners suggests that Ascend Learning LLC and other Providence investments—including Blackboard—could become a strong platform competitor.

In July 2011 Ascend Learning LLC  acquired “certain assets” of PrepMe.

 Ascend Learning, which provides training and testing services for health care and other vocational fields, purchased PrepMe’s adaptive learning platform [emphasis added] and virtual classroom. PrepMe will continue to run its online college entrance test preparation and other businesses.

In March, PrepMe had “launched a platform called Coursification, which enables students to study in a customized and interactive manner. PrepMeCEO Karan Goel said: “The product, for instance, automatically calls up quiz questions that are tailored to students’ skills levels”. He also said: “The platform can be used by other education companies to run their programs,” He also commented “PrepMe received a lot of interest, both from small to mid-sized education companies that seek to use the Coursification platform and from larger players that wanted to acquire the company outright, said Goel”

Ascend did not acquire the company, but did acquire the Coursification platform.

Ascend Learning also acquired Advanced Informatics January 9, 2012:

Through its successful E*Value® software, Advanced Informatics helps its clients manage class schedules, evaluations, outcomes measurement, coursework delivery, electronic portfolios, curriculum mapping, and procedure tracking for their students. By streamlining these activities, the company addresses a critical pain point in healthcare education by automating much of a school’s reporting requirements for the accreditation process.

Three months later Providence Equity announced intent to acquire Blackboard. This acquisition added three more “platforms” to its technology portfolio.

Although the phrase “adaptive learning” can have many different interpretations, most imply features not now found on many of the installed learning management systems. Adapting current systems to meet the extensive requirements for courses planned for Coursera, Udacity and edX may be feasible. A new system may be preferred.

Blackboard reduced its software development expenses electing not to integrate their three current learning-management systems into a single system. Speculation suggests alternatively a strategy based on the platforms of Ascend Learning and its acquisitions. The platform could be marketed, maintained, and supported within the current Blackboard infrastructure. Blackboard, like Oracle, has been adept at integrating its acquisitions. Providence Equity could also purchase another learning system emerging from the Silicon Valley start-ups.

Providence Equity has an additional strength—they own companies that are designing, developing, and marketing courses for certifications. Similar to the movie industry they begin with a stock of course materials that are producing a profit.

It is unlikely University of Virginia Rector Helen E. Dragas realized the national impact of the email exchanges among the Board of Visitors, made public by the Richmond Times, would have on the public’s perception of online learning. Coursera has become the new expectation of “online learning.”

Without any reference either to prior art or to costs and benefits, the press has documented an assessment of why and how online should be widely implemented. Online courses are, they report, very effective, high quality, very low-cost instruction matched to the needs of Internet savvy schedule-constrained students. Problems of investing in course development, accreditation, employer preferences, financing students, and appropriate learning system technologies and learning processes have not yet been fully discussed or resolved, They now may be ignored by the public. The expected wave of technology becomes, as one report said, “a tsunami.”

Silicon Valley and private equity now appears to be leading the national expectation for the “reform” of higher education. Their impact on the future of higher education will depend upon how immediately and how well higher education responds.

Share Button

Google+ Comments

This entry was posted in Ed Tech and tagged , , , , . Bookmark the permalink.

4 Responses to Blackboard Inc.: The Rise of the New “Online Learning” and the Race for Profits

  1. Pingback: The End of ‘School’ as Usual… | online learning insights

  2. Pingback: Blackboard Inc.: The Rise of the New “Online Learning” and the Race for Profits | weiterbildungsblog

  3. Janderson says:

    After years of being in the stock market I have finally concluded the game is rigged! From blatant outright thievary which takes place on a daily basis to what goes on behind the scenes, I am absolutely disgusted with the current state of our financial system. Anyone have any thoughts? Is it Rigged or have a few bad seeds hurt the industry’s reputation?

  4. Renoman1000 says:

    Jim, you ignore two other key players in the learning management system market – Moodle and DesireToLearn.

    Both have significant market share, the latter enough that Blackboard tried suing them (without success).

Comments are closed.