Moodle unveiled its new product, Moodle Workplace, at the the Learning Technologies conference in London three weeks ago. While the open source Moodle LMS has been used by companies and organizations for employee training for years (approximately 40% of Moodle implementations worldwide according to this 2015 interview), Workplace represents a new approach for Moodle's usage of open source deployment.
Based on an email interview with Moodle Pty Ltd (aka Moodle HQ) CEO and founder Martin Dougiamas, Moodle Workplace is a "a series of well-written plugins that sit cleanly on top of the standard core distribution" and is being released under an open source GPL license. The plugins add functionality to:
- Create training paths;
- Create departmental structures and reporting;
- Automate enrollment, certificates and other back end processes; and
- Customize reporting and report delivery.
From first reading, the Workplace functionality is a subset of the features available in other products, notably Totara Learning. That solution is also based on Moodle core, although Totara forked its code base more than three years ago.1 Workplace appears to be a solid, if somewhat unremarkable platform for organizational training delivery which can provide compliance tracking, learning pathways, and other business-focused features. For organizations looking to add training features to existing stock Moodle, Workplace should offer an easier migration path than Totara.
The bigger news is the change in the distribution and business model as described by Dougiamas.
We are restricting distribution to Moodle Partners for now so that we can give more value back to our Moodle Partners who invested time and money into it.
Similar to Totara's business model, there are limitations put on the Moodle Partners to prevent modification or distribution of the code. By providing Workplace only as a SaaS solution, Moodle is using the same distribution loophole in the GPL.2 The upshot is that if a company or organization wants to use Moodle Workplace, they have to work through a Moodle Partner and cannot download and install the software for free.
The business model around Moodle Workplace is clearly a departure from the norm for Moodle, where the core GPL code is available to anyone, anytime, for free. But it is not clear whether this change in model for Workplace is a limited play or has broader applications that may impact education markets. In our interview, Dougiamas directly addressed our question on whether we should expect similar changes to Moodle core:
No, we remain intensely committed to developing and improving Moodle core as a GPL product with the same license, open source practices and active community as now.
He further stated:
Our team developing Workplace have been contributing features (the more general ones) into core at the same time, and the plan is that any Workplace features that also supports sectors like Higher Ed or schools will always be migrated into core this way.
So, what are educational institutions to make of the new business model around Moodle Workplace? We're not entirely sure at this point. At a minimum, it would appear to be an attempt to better monetize the large installed base - a move to satisfy investors and to replace the Blackboard revenue after cancellation of their Moodle Partner agreement. At a more strategic level, it could be an attempt to stay competitive with peers, particularly SumTotal and Totara, who are going after the corporate learning space.
If Workplace is successful, it will create a new revenue stream for Moodle HQ, potentially accelerating the development of the core educational product. A Moodle Partner we interviewed for this piece claimed they were already seeing increased lead generation from the announcement. The small and medium business (SMB) market is larger and generally has faster sales cycles than the education market, which could drive partner revenue and cash flows. The partners who are able to create sales momentum in both spaces and find their product / market niche are likely to see some accelerated growth. If this is successful, Moodle HQ should capture additional revenue and accelerate the product and service roadmap. This move directly addresses the issue Michael raised in the Fall about the termination of the Blackboard contract and revenue stream.
For Moodle, everything rides on their ability to grow alternative sources of revenue. The company has been touting newer offerings such as MoodleCloud, MoodleNet, LearnMoodle, and MoodleServices. Since we don't have any external evidence that these are material sources of revenue for the company, and since the company itself has not shared numbers that we can independently evaluate, it's very hard to tell what their chances are. Moodle has a huge installed base, which gives the project a lot of momentum. But the company that drives most of the core platform development has a business model that has not aged well and is in the process of diversifying into business models that are as yet unproven. I remember enough physics to know that momentum and acceleration are not the same thing. I think the risks are probably greater for Moodle Pty. than they are for Blackboard. But both sides of the equation bear watching.
Moodle Workplace as a monetization strategy seems to be a stronger bet than the previous offerings.
The risk for education institutions, however, is that the Workplace development roadmap pulls resources from making investments in core Moodle necessary to keep pace with better-funded rivals. At worst case, Workplace fails to find a market niche and position itself in a crowded field. The opportunity cost of investing in Workplace vs other potential investments in the core education product and cloud services could end up having larger knock on effects downstream.
What we have observed over the past 6 - 9 months is an increased customer focus by Moodle HQ, acknowledging the importance of market messaging (e.g. first-time presence at EDUCAUSE, announcing Workplace at London conference) and better understanding and satisfying business needs of revenue-generating Moodle Partners. The jury is still out on how these changes will impact financial sustainability and competitiveness of Moodle in education markets, but there is little doubt that there are changes in behavior.
In the end, this is another example of corporate financial health issues having an outsized impact on the LMS market in 2018 - 2019. And one that bears watching, coming from the LMS provider with the world's largest installed base.
Update 3/6: Changed naming throughout to Moodle HQ instead of Moodle Pty to reflect more accurate and common usage. Also edited footnote about 'Moodle for Workplace' prediction to remove the implication of Moodle Workplace being a copy of Totara code.
- At the time of the fork, Totara management also predicted Moodle was planning to offer the market ‘Moodle for Workplace'. [↩]
- For those unfamiliar with the peculiarities of open source licensing, Moodle and Workplace are released under the General Public License (GPL). The GPL requirement to release the source code ONLY applies if you are providing someone a copy of the binary. Providing software as a service does not constitute “distribution” under the GPL. This is how Google, Amazon, Facebook and all the other major internet players can build on open source, but not release their source code. [↩]