U of Phoenix: Losing hundreds of millions of dollars on adaptive-learning LMS bet

It would be interesting to read (or write) a post mortem on this project some day.

Two and a half years ago I wrote a post describing the University of Phoenix investment of a billion dollars on new IT infrastructure, including hundreds of millions of dollars spent on a new, adaptive-learning LMS. In another post I described a ridiculous patent awarded to Apollo Group, parent company of U of Phoenix, that claimed ownership of adaptive activity streams. Beyond the patent, Apollo Group also purchased Carnegie Learning for $75 million as part of this effort.

And that’s all going away, as described by this morning’s Chronicle article on the company planning to go down to just 150,000 students (from a high of 460,000 several years ago).

And after spending years and untold millions on developing its own digital course platform that it said would revolutionize online learning, Mr. Cappelli said the university would drop its proprietary learning systems in favor of commercially available products. Many Apollo watchers had long expected that it would try to license its system to other colleges, but that never came to pass.

I wonder what the company will do with the patent and with Carnegie Learning assets now that they’re going with commercial products. I also wonder who is going to hire many of the developers. I don’t know the full story, but it is pretty clear that even with a budget of hundreds of millions of dollars and adjunct faculty with centralized course design, the University of Phoenix did not succeed in building the next generation learning platform.

Update: Here is full quote from earnings call:

Fifth. We plan to move away from certain proprietary and legacy IT systems to more efficiently meet student and organizational needs over time. This means transitioning an increased portion of our technology portfolio to commercial software providers, allowing us to focus more of our time and investment on educating and student outcomes. While Apollo was among the first to design an online classroom and supporting system, in today’s world it’s simply not as efficient to continue to support complicated, custom-designed systems particularly with the newer quality systems we have more recently found with of the self providers that now exist within the marketplace. This is expected to reduce costs over the long term, increase operational efficiency and effectiveness while still very much supporting a strong student experience.

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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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