Exclusive: University of Phoenix moving from homegrown platform to Blackboard Learn Ultra

The University of Phoenix has a history of using its scale to develop and rely on homegrown platforms, including the  adaptive learning platform branded as “Classroom”. I wrote about this investment in 2013.

The full significance of the University of Phoenix bet on adaptive learning platforms goes beyond pure dollars and became clear when the school announced the closure of 115 of its 240 locations. The stated usage of the savings from campus closures is primarily to further invest in the platform as described by the Phoenix Business Journal.

In early 2015 the University of Phoenix experienced “significant disruption with respect to our new online classroom platform”. By summer, the university’s parent company The Apollo Group announced to investors that it planned “to move away from certain proprietary and legacy IT systems”. CEO Greg Cappelli further described these changes in broad terms in the most recent earnings call.

Finally, as we discussed last quarter, we continue to build self-service capabilities for many of our student service applications, and we’re making progress in moving away from more costly proprietary and legacy IT systems that will greatly improve cost and efficiency. We’re still on track to begin to roll out the new Learning Management System for incoming students in partnership with a leading provider using their newly designed state-of-the-art LMS by the end of fiscal 2016 [end of August].

What we can now confirm at e-Literate is that the “learning platform” selected by the University of Phoenix is Blackboard Learn Ultra. This is the cloud-based redesign of Learn that Michael and I have described in several posts. Even with the University of Phoenix’s reduced enrollment, I consider this news to be the most important new client acquisition for Blackboard since at least 2011.

Interview

The Apollo Group’s Mike Sajor, CIO, and David Fraser, Senior Director of Academic and Instructional Technology, agreed to an exclusive interview with e-Literate to describe the changes.

The driver for the University of Phoenix to move away from their homegrown system to Blackboard is an initiative called Project Bedrock. The concept is that they view a pyramid of functionality, where the bottom level is necessary infrastructure that can be provided with a commodity SaaS approach (e.g. HR systems with little differentiation), and the top level is unique value-add functionality where it is worth investing in a custom solution (e.g. learning analytics targeted at individual students in their specific demographics). The LMS, with its rosters and grade books is no longer viewed as worthy of internal development and investment. As Mike Sajor explained, they could develop the world’s greatest grade book, and even if people acknowledged that this was indeed a great grade book, people would still not care that much nor would students see significant benefits.

Project Bedrock also assumes that commodity and off-the-shelf software should focus on configuration and not customization. Mike Sajor said that he was under no illusions that there would be no customizations, but they clearly want to minimize this work even by changing internal processes. Put another way, the University of Phoenix will be likely be using the commercial, standard version of Learn Ultra.

I pointed out that this was a major change in company strategy compared to recent huge investments in a homegrown learning platform, and they agreed. As David Fraser described, however, when they took a hard look at the problem, the continuing LMS investment was not worth it.

The University of Phoenix selected Blackboard’s Learn Ultra as their new LMS based on two primary factors – a comprehensive set of functionality and the redesigned user experience of Ultra. David Fraser described how the academic units and leadership looked at their mission and came up with a comprehensive checklist of functionality, and Blackboard hit those checklist items.

Where they want to invest more is in analytics. Mike Sajor described his view that there are two flavors of learning analytics – aggregate data in reports or visualizations across student groups and predictive behavioral model at an individual level. Apollo plans to “take what Blackboard has and use the heck out of it”, but they have not yet determined what types of analytics will end up in Blackboard or in custom development. They did explain that Blackboard’s Analytics mostly addresses the aggregate data problem. Again, this area of learning analytics is where Apollo wants to invest and provide unique functionality.

The decision thus far has been specific to the University of Phoenix. While other Apollo Group brands (e.g. Apollo Global and Western International) are going through similar re-evaluations based on the same principles as Project Bedrock, they have not chosen to go with Blackboard. Yet.

David Fraser described that moving to Blackboard Learn Ultra is a disruptive change affecting a large number of faculty and students. The first communication went out in July notifying faculty of the change, and the executive team is holding a road show of sorts, visiting local campuses to describe changes and get feedback.

On the subject of expectations, I asked about adaptive learning, which was a major focus of the homegrown Classroom system and is not native to Learn Ultra. David Fraser said that faculty have largely become accustomed to the individual analytics and adaptive approach of the legacy Classroom system, and they will expect the same in Learn Ultra. While details have not been determined yet, they are mostly planning on adaptive applications integrated with Learn Ultra to provide similar functionality.

Notes

Given the strong focus on analytics at the University of Phoenix, several of Blackboard’s recent hires and acquisitions now make even more sense. Last year Blackboard hired John Whitmer from California State University, and he has been deeply involved in data research including user experience issues such as how different reports and graphs are presented in context. After the two founders of iStrategy, the company Blackboard acquired at the end of 2010 to provide the foundation for their Analytics platform, left the company in 2014, there was a hole to fill on how to design and implement the platform. This is where Blackboard’s acquisition of Blue Canary, announced just this week, comes in. I suspect that Blue Canary was mostly an aqui-hire of Mike Sharkey in particular – in fact, his new title is VP of Analytics. Mike actually worked at the University of Phoenix on their analytics strategy from 2002 – 2010. John and Mike are two of the most knowledgable and practical people in the field of learning analytics.

There is another story to consider in that one of the world’s largest educational institutions was unable to successfully develop and deploy a custom learning platform despite massive investment. In the interview, the decision was chalked up to their new IT strategy, but the earnings call transcripts make it clear that there were also real problems with Classroom.

This move also raises the question of how significant this LMS selection is to Blackboard themselves. We have extensively documented at e-Literate the market share losses over the years, the bold effort to redesign as Ultra, and the subsequent delays in completing Ultra. For Blackboard to remain viable as a long-term learning platform company, they need two things: international growth (which they appear to be gaining both for Learn and for Moodle Solutions) and successful completion and acceptance of Ultra particularly for the US market. Blackboard now has a huge anchor client for Learn Ultra with the University of Phoenix, and this client is one of the most demanding customers in higher education.

What are the risks? The most obvious one is the delays in Ultra coming at a time of aggressive cost-cutting and layoffs. Blackboard faces the challenge of needing to invest (to complete Ultra) and to cut costs (to improve their financial metrics for debt markets and for corporate acquisition). This is a difficult challenge, and the risk is now shared by Apollo Group. The sharing of risk, however, actually makes it more likely that Blackboard will maintain focus, complete the major functionality needed in Ultra, and deliver to the market in summer 2016. Another risk is that the University of Phoenix, Apollo Group, and Blackboard will need to provide similar levels of learning analytics and adaptive learning capabilities as provided by the legacy Classroom platform, and these capabilities will need to be pulled together from multiple sources – Blackboard software, integrated third-party software, and internal development.

We will continue to track this development and its impact on the University of Phoenix, Blackboard and the broader ed tech market. For now, count this as a major win for Blackboard and a major change in strategy for the University of Phoenix.

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About Phil Hill

Phil is a consultant and industry analyst covering the educational technology market primarily for higher education. He has written for e-Literate since Aug 2011. For a more complete biography, view his profile page.
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