The big buzz at EDUCAUSE last week was around OpenClass, Pearson's new LMS entrant. Much hyped but only rarely glimpsed, speculation has been rampant about whether it is a big deal or just a gimmick. Because most people (including me) don't have access to the product yet, the best source of information on it at the moment is Adrian Sannier, eCollege's VP of Product. I had the good fortune to both listen to him give a presentation on OpenClass and chat with him about it one-on-one. My conclusion is that this product could be a very big deal indeed.
In a previous post here on e-Literate, Phil Hill characterized OpenClass as potentially disruptive. I think he's right, but I also think this is one of those times where we have to be careful about how we use that term. Adrian Sannier is a big fan of Clayton Christensen, the man who coined the term "disruptive innovation." If you really want to understand what OpenClass is all about, go out and read The Innovator's Dilemma and The Innovator's Solution very carefully. There are very specific reasons why "free" and "easy" are the words you will hear most often from Adrian when he is speaking about the product.
The audacity of what Pearson is attempting should not be underestimated. If they succeed, they could cause major tectonic shifts across several markets that are currently critical to higher education. Colleges and universities need to pay close attention to the kind of deal that they will be striking for themselves. Overall, I don't think the biggest concern is whether Pearson will fail to maintain the platform as free. Rather, the more serious question is what will they be getting if they succeed.
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Before we get to the heart of the matter, I need to dispose of a few issues up front. First, full disclosure. In my day job I work for Cengage Learning, a company that competes with Pearson (though not with its eCollege division). The views expressed on this blog are solely my own and do not represent those of my employer.
Second, hype. There is a lot of it. Some of it has been caused by misstatements and overstatements by Pearson, and some of it is just an inevitable by-product of a big, splashy announcement that is not accompanied by a lot of detail about the product itself. I'll quickly walk through a few of the lowlights. To begin with, while Pearson has made much of the product's close connection with Google, the search giant apparently felt that Pearson was making too much of the connection. In fact, Google felt compelled to tell The Chronicle of Higher Education that "there were some misleading headlines with the [sic] Pearson's announcement." A Google spokesman clarified that OpenClass is "not a shared product. [Pearson] built it with really nice integration with our systems. We worked with them as we do with a lot of vendors."
Then there's the claim that Pearson is making about migration. During Adrian's big OpenClass presentation, he talked about how easy it is for Google Apps for Education schools to activate OpenClass. Basically they just log into their administration account, go to the Google Apps for Education Market, click a button or two, and OpenClass is available for the school. As proof of just how easy it is, Adrien noted that hundreds of schools had activated OpenClass in the first day of it being available on the in the market. (I may be slightly off on the details; I wasn't taking notes.) Adrian characterized this as "the fastest LMS migration in history," with the "previous record" being "about six months."1 Um, no. It may be more fairly characterized as the fastest LMS/LDAP integration in history, with the previous record being about six hours. LMS migration entails a heck of a lot more than that. It may turn out that OpenClass will substantially reduce migration times for schools, but Adrian's characterization of the data point he was sharing was hyperbolic.
And finally, there's the question about whether OpenClass is a traditional LMS or a category breaker. It's hard to judge this one without having more access to the product than I have had so far, but from what I have seen at EDUCAUSE and heard from a friend I trust who has accessed it through the Google Apps for Education Market, it's pretty much an LMS. It has some interesting twists on the one hand and is missing some features on the other, but it's not a category breaker. I don't think that Pearson has claimed otherwise, but you wouldn't know that from some of the breathless coverage the new system has gotten.
How much does the hype matter? For the most part, not much. I don't think institutions would sign onto OpenClass just because they thought it was backed by Google. I don't think any institution faced with an actual migration will somehow be tricked into making the leap because Adrian was over-exuberant in his claims during one speech. And I don't think people will stop paying attention to OpenClass just because it's not redefining the functional category. Where I do think these matter collectively is in the area of general trust. As I'll get into later in this post, Pearson is asking both potential adoptees and potential content partners to make a big leap of faith.
On the Nature of Disruption
With that out of the way, let's get down to business. Specifically, let's get down to the business of what makes an innovation disruptive. The term "disruptive innovation" is popularly misused to mean anything that is so new and cool that it overturns the market leader. The iPhone is a good example. Because it unseated the Blackberry and the Palm Treo (among others), it is called disruptive. But the iPhone probably wasn't a disruptive innovation in the sense that Christensen means it. A disruptive innovation in the Christensonian sense is one that generally starts at the bottom of the market. It isn't better than its competitors, but it is usually cheaper and/or simpler. Sometimes it serves a segment of the market for which the existing product was too expensive. Over time, it gets better and displaces the higher end product. The iPhone didn't do this. However, the camera phone did. It started off as a better-than-nothing camera for people who were carrying their phones anyway and didn't bother buying or carrying a digital camera. They were simple, convenient, and bundled at no extra cost with the phone. Over time, phone cameras have gotten better, to the point where people previously might have been buyers of point-and-shoot digital cameras may now be inclined to just rely on their phone cameras.
Now think about the OpenClass tagline. "Open. Easy. Amazing." But really, "Open" gets mostly glossed over in Pearson's message and elided with "Free." I asked Adrian whether "free" would be the one differentiator he would pick if he could only emphasize one. He said it was. So the OpenClass tagline could just as easily be "Free + Easy = Amazingly Disruptive." Everything about the way OpenClass is being marketed speaks to an attempt at disruption---including Adrian's hyperbole about the "fastest LMS migration in history." Sure, there is some effort to wrap the product in Google's mystique and to talk about cool features. And I'm confident that, in fact, OpenClass will have some cool features. But that's all secondary. The very clear, very consistent primary marketing message is "Hey, what have you got to lose? It's free! It's not going to take a lot of time or effort! And did we mention that it's free?"
Just how potentially disruptive can "free" be? The answer to this question came out when Adrian and I were talking about how OpenClass is positioned relative to LearningStudio (a.k.a. eCollege). Going back to his days as CIO of Arizona State University, Adrian has long contended that the LMS is overly complicated for the needs of most faculty teaching traditional face-to-face classes. While a few teachers here and there will fully utilize the platform, the vast majority have just a handful of needs that an LMS can help with and have to endure excessive complexity in order to meet those simple needs---at significant cost to the university. Fully online classes are a different story, according to Adrian. They require a much more robust product and extensive support services.
Adrian believes that there are significant numbers on both ends of that spectrum, but not a lot in between. LearningStudio (and the services that surround it) will continue to be Pearson's high-end platform aimed at meeting the needs of fully online (mostly for-profit) programs, while OpenClass will be aimed at the vast majority of on-campus faculty. I asked Adrian to tell me which features make sense to have in LearningStudio but not in OpenClass. He declined to give me a direct answer to that question, indicating that LearningStudio has a "secret sauce" that enables it to be dominant in that mostly for-profit, mostly online market segment. So I asked him what features other LMSs have that OpenClass would leave out. Again, I didn't get a direct answer. But then he said something really interesting. He was talking about the university purchasing process for an LMS and how that conversation would go with OpenClass. He said,2 "They will give us a list of features that they are looking for, many of which we'll have, and some of which we won't. For some of those features we don't have, we'll say, 'We're not going to build those; you can build them yourself if you want, but the question you have to ask yourselves is whether those three features are worth the half a million dollars a year you are going to pay for that other LMS."
Think about being in the position of having to take the other side of that argument. That's how powerful "free" can be as a disruptor.
How Much Does "Free" Cost?
Naturally, the "free" message has gotten a lot of attention. Many of the skeptics have focused on the question of where the hidden fees might be. That's the wrong question. The right question is, "What is so valuable to Pearson that they are trying so hard to give away something that normally costs real money?" I asked Adrian something along these lines, and his first answer was that it accelerates the adoption of digital products. This reply raises more questions than it answers. Textbook publishers make the bulk of their income from sales of the dead tree products. It will take them time to transition to digital, and they will want to make that transition in a way that causes as few ripples to their revenues and income as possible. Now along comes Pearson, saying not only that they want to aggressively give away an LMS that costs them serious money to run and that customers are willing to pay for, but that one of their reasons for doing so is to accelerate a transition that increases risk to their quarterly earnings statements while opening the door for born-digital competitors. This is not just a marketing gimmick for the eCollege division. It's way too high-risk for that. This has all the hallmarks of a strategic, bet-the-farm move for the whole company. But what are they betting the farm for?
I got a hint in my conversation with Adrian when he started to talk about the Xbox. Admittedly, this bit was a little abstract for me. My hand/eye coordination is barely sufficient for me to get a forkful of food into my mouth without injuring myself, so I don't play console games. But I think I got the general idea. Adrian talked about a kind of mezzanine feature of Xbox where a player can see her score not just for the game she was just playing but for all games. The implication was that OpenClass would become an aggregator of academic achievements from various online courses and assessments provided by both Pearson and third parties. Think of it as half transcript and half LinkedIn, with maybe a dash of ePortfolio thrown in for good measure. While this potential was always there for any LMS with decent market share, Pearson understands curricular materials and assessments in ways that other LMS vendors don't. They are in a position to suck the marrow out of the data they will be getting. And because their platform is genuinely multi-tenant, it will be easier for them to do massive data analysis across all their customers.
Then there's the market for content. Pearson has been pretty consistent and proactive about emphasizing that they want to sell third-party content through OpenClass. This could be powerful when combined with the analytics. Imagine a platform that could recommend content---and courses---to students based on their achievements, career goals, academic strengths and weaknesses, and so on. Imagine that it can automatically keep copies of their papers, tests, etc., and present their achievements in ways that prospective employers and graduate schools would find meaningful. It's a powerful vision, and one that is achievable over time if Pearson manages to realize adoption at scale and build out the necessary analytics and eCommerce infrastructure.
What does Pearson get out of all this? They potentially get all the data on your students and an iron grip on the point of sale for all curricular content. Everything that worries you about what Facebook and Google know about you and everything that worries you about the control that Apple exerts over the iTunes and App stores should worry you about Pearson's ambitions. If OpenClass succeeds in massively disrupting the LMS market, then Pearson potentially controls the center of the chess board for ePortfolios, digital educational content, transcripts---possibly even schools themselves. Just last month, Pearson announced the acquisition of Connections Education, a company that runs virtual schools. If OpenClass becomes the de facto platform for the automated production of transcripts, and if most course content flows through and is purchased from their platform, they are not far from turning that capability into an accredited virtual university---one that could have decisive advantages over its competition since its parent company would own the platform, have buying leverage over the content providers (and would be a content provider itself), and so on.
It is not my goal to predict either utopia or dystopia as the inevitable consequence if OpenClass is successful. The future has yet to be written, and a lot depends on the kinds of agreements that Pearson strikes with its customers and commercial partners. And, of course, OpenClass may not be successful, for any one of a variety of reasons. My point is simply that people need to pay close attention to what the company is doing with OpenClass. Pearson is attempting to shift from being a product company to being a platform company, in the way that Google and Facebook (and, increasingly, Apple) are platform companies. I happen to use Google and Apple products quite a bit and, for the most part, accept the trade-offs that I am making in order to reap the benefits that they provide. But we don't have anything like this kind of a bargain in the educational technology market, and the implications are far reaching. Now is the time to think carefully and read all the fine print.
- I double-checked with a couple of the other attendees to make sure I remembered this statement correctly. They all said that I had. [↩]
- I'm paraphrasing, since I didn't take notes during the conversation. [↩]