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Two-Year Anniversary of Blackboard Acquisition of Moodlerooms and NetSpot

March 26, 2014 in syndicated

Two years ago today, Blackboard made a dramatic change of course with a series of public announcements:

At the time I described these changes:

Most of the discussion in articles and blogs follows the meme of Blackboard entering open source, or even the meme of Blackboard acquiring competitors. I think the news is more significant than either of these two memes.

Blackboard just did a 180-degree turn on their strategy for their core LMS business. They have moved from consolidating all customers into Learn 9.1 to providing products and services that are almost LMS-agnostic.

Archive of Statements

Given this dramatic turn of events, I wrote an additional post that captured the public statements (press releases, blog posts) from Blackboard, Moodlerooms, NetSpot, and even Blackboard competitors for the purpose of checking to see if the acquisitions really did signal a true change in strategy and support for open source. This two-year anniversary seems the perfect time to check up.

Bb’s Previous Open Source View

Just how big of a change did the announcements represent? Consider Blackboard’s moves regarding alternative LMS solutions in the previous six years.

  • Blackboard acquired WebCT, their biggest competitor, in 2006.
  • Blackboard sued Desire2Learn over patent infringement from 2006 — 2009.
  • Blackboard acquired ANGEL in 2009.
  • Blackboard argues that Moodle is just meeting a minimum standard of competence as an LMS.

On that last point, note that less than three years prior to the acquisition of Moodlerooms and NetSpot, Blackboard publicly argued that Moodle was not a viable enterprise system, as described and quoted by Michael, in response to a study from the North Carolina Community College System (snippets below are quotes from Blackboard).

“The Moodle product roadmap offers only a short-term view into the direction of future product upgrades and is controlled by a single person, Martin Dougiamas.” [snip]

“Global innovation is by nature not static and moves at a rapid pace. Open source may meet some minimum standard of LMS competency, but only Blackboard can grow, adapt, and evolve with the customized and ever changing needs of your [NCCCS] students and faculty”

Bb’s Current Open Source View

Fast forward to March 2012, and Blackboard’s press release shows a remarkable change in its dealings with Dougiamas.

Leaders from each company recently traveled to Perth, Australia to meet with Martin Dougiamas, founder of Moodle and Managing Director of Moodle Pty Ltd, and present their plans. The meeting included Blackboard CEO Michael Chasen and Chief Technology Officer Ray Henderson, Moodlerooms CEO Lou Pugliese and Chief Architect Tom Murdock, and NetSpot Managing Director Allan Christie.

In a recent phone interview Mark Strassman called out the continued support for Moodle by stating:

It’s really clear that one size does not fit all, and we’re thrilled that we can help those who want Moodle, giving them a mechanism for support. Having different platforms for different types of customers makes sense.

Change in Management

In the past two years most of the senior leadership involved in the acquisitions has changed, yet the basic approach to open source seems to remain the same.

  • Michael Chasen and Ray Henderson are gone from Blackboard (at least operational management of products, as Ray is still on the board), replaced by Jay Bhatt, Mark Strassman and Gary Lang (the team formerly together at AutoDesk).
  • Lou Pugliese, David Mills, and Tom Murdock are gone from Moodlerooms, although Phill Miller remains.
  • The original NetSpot leadership, however, has actually grown in importance in the Blackboard organization. Allan Christie is now General Manager, Mark Drechsler is now in charge of consulting services, and Stephen Watt is in charge of sales & marketing — for most of Blackboard’s products and not just Moodle support. This support includes bringing Moodlerooms services into Australia.
  • Charles Severance recently announced his departure from Blackboard.

Statement of Principles

In terms of open source support, the most important document to review is Blackboard’s statement of principles signed by Chasen, Henderson, Pugliese, Christie and Severance (note that only one remains). This short document was directly aimed at countering skepticism about Blackboard’s actual intents with the acquisitions.

We are committed to supporting the growth, development and use of open source technologies in education worldwide. We expect to make significant contributions to the community to help ensure that open source options remain strong, reliable and sustainable for all. Our work will be guided by the following principles:

1. We will work in a way that supports and honors the values of the communities we serve, and will continue to participate and support important community gatherings.

2. We will continue contributions of code from products we support and from in-kind development activities conducted in partnership with community organizations like Moodle Trust.

3. We will continue to focus on supporting open standards through organizations like the IMS Global Learning Consortium to ensure interoperability and eliminate vendor lock-in for all LMS options, commercial and open source.

4. We will provide financial support for Moodle Trust and other open source organizations as our strategy evolves.

5. We will work to deliver innovative, visually elegant, and technologically robust education solutions to clients regardless of whether they are open source, proprietary, or a blend between them.

On principles 1 — 4, I would argue that Blackboard has met their commitments, with support for MoodleMoots, investment in data centers, contribution of code (LTI plugin, common cartridge backup/restore, outcomes system), and development and support of LTI 2.0 code. Principle 5 in my opinion is really a marketing statement subject to evaluation by customers.

Severance, in his departure note, pointed out his view of Blackboard supporting open source communities even beyond Moodle.

Blackboard is a great supporter of open source, Sakai and open standards, and it’s investments helped move Sakai 2.9 towards its ultimate release. [snip]

Arguably the most significant effort supported by Blackboard was my work on IMS LTI 2.0.

Financial Contributions

On the financial contribution (principle #4), there are some indications that this support is quite significant. At a recent presentation to Moodle partners, it was claimed that the Moodlerooms and NetSpot combined contributions to Moodle Trust was more than 50% of the total partner contributions.

NOTE: I have not been able to confirm this information from additional sources, and every person I asked during interviews declined to speak on the subject. I went back to the Twitter stream, and it appears that the original tweets (and therefore retweets) have been deleted. Open source does not equal open books, apparently.

Whether this information is correct or not, Blackboard has certainly maintained their financial support of Moodle through the partners program. If the information is accurate, however, there is a risk that Blackboard is contributing too much financial support for Moodle Trust.

Change in Emphasis

One change worth noting with the new Blackboard executive team is the change in emphasis on international markets. Jay Bhatt has stated to me that Blackboard has under-penetrated international markets, especially in growth areas such as Latin American and China. The company has pegged much of its growth potential overseas, and according to Bhatt Moodle is a natural fit in this role. Moodle already has a strong international base of users, and many markets cannot afford or support a full-scale Learn LMS deployment. The same could be said for U.S. K-12 markets.

Blackboard has also kept their commitment (to date) in supporting the ANGEL platform, which I described in more detail here. Some customers have pointed to this June 2012 message from Blackboard as somewhat of a mixed message for ANGEL clients:

Previously we had announced an end of life target for Release 8..0 of the ANGEL Edition LMS for October 2014. In order to ensure that you have sufficient time to plan and execute a move to Blackboard Learn 9.1, we are extending that end of life window beyond the previously announced EOL date. Blackboard will evaluate the decision on an ongoing basis and provide sufficient notice of any future change to plans for support. We plan to make select enhancements to ANGEL 8.0 over time to ensure that the solution is a viable platform until you are ready to plan a migration.

Nevertheless, it is two years after the announcement, ANGEL is still supported, and Blackboard’s management still encourages the usage of ANGEL. In a recent phone interview Gary Lang stated:

Customers are happy with ANGEL, people at Blackboard are still working on the software, and there is no end-of-life (EOL) planned. For many customers the LMS is not just about feature parity — some are religious about their choices — and Blackboard is fine with this choice.

Does It Matter?

While Blackboard has kept their word and made a major change in strategy, the question arises of whether that matters. According to the Campus Computing Survey for 2011 and 2013, Blackboard’s market share (combining Learn, WebCT, and ANGEL product lines) has continue to fall in the US over the past two years, from 51% of institutions to 41%. Moodle has risen from 19% to 23% (these numbers do not separate the market share of Moodlerooms clients, just usage of Moodle). Within US higher education, at least, Blackboard has not succeeded in stopping their erosion of market share, but they have tapped into a still-growing Moodle community.

It is difficult to evaluate the company’s fortunes in K-12, professional ed (corporate and for-profit clients) and international markets without reliable market numbers. Phill Miller and Allan Christie stated that Moodlerooms and NetSpot have continued to grow since the acquisition.

Bhatt, Strassman and Lang all emphasize that Blackboard is no longer primarily an LMS company. As Strassman indicated in our call, Blackboard is “expanding its purview beyond the LMS to the broader teaching and learning continuum”. As they do so, the company will focus on interoperability and providing choices in platforms.

At the end of the day, this story is not that dramatic. Blackboard has kept their word, followed their stated principles, and kept their support of multiple LMS solutions including open source over the past two years. What is more interesting is to step back and see this update as confirmation on just how big of a change Blackboard made two years ago.

The post Two-Year Anniversary of Blackboard Acquisition of Moodlerooms and NetSpot appeared first on e-Literate.

New look at LMS data for US small colleges

February 11, 2014 in syndicated

Last fall I mentioned two new non-survey data sources available to track LMS adoption within higher ed. While surveys for subjective, attitudinal information still make sense, surveys of hard data are losing their value over time. Analyses of automatically collected system data place less of a burden on the organizations providing the information, and these analyses also allow a more agile approach to refining the data collection and viewing from different angles. Today Edutechnica released a new report on LMS adoption that demonstrates these benefits.

When we provided our initial analysis of LMS usage in fall of 2013, one point of feedback that we heard loud and clear is that because our data only included institutions with greater than 2000 enrollments, we excluded a fair number of community colleges, career colleges, and liberal arts colleges. To the credit of those who provided this feedback, they were absolutely correct. Three-quarters of all recognized higher education institutions in the United States have fewer than 2500 FTE – a critical demographic as the majority of universities in the US are of this size or smaller. To more fairly represent LMS usage we needed to include data on smaller schools.

We are now excited to be able to provide analysis of a data set for institutions with greater than 1000 students.

The team presents the raw data for schools above 1,000 FTE, calling out some of the differences from their earlier report. But one key view they provided is looking at institutional LMS adoption per school enrollment size.

Seeing Moodle’s increased usage prompted us to investigate Moodle further. An interesting thing happens below 2500 FTE; Moodle actually exceeds Blackboard’s market  share.  Only after this point do the demographic segments diverge.

source: http://edutechnica.com/2014/02/10/lmss-of-smaller-colleges/

source: Edutechnica

While this data confirms a commonly-held assumption about Moodle’s popularity at small schools, it is quite valuable to have data available on a per-enrollment basis. Kudos to George Kroner and team for further developing their data set in response to reader feedback.

There’s more information at the post that’s worth exploring.

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The Resilient Higher Ed LMS: Canvas is the only fully-established recent market entry

February 5, 2014 in syndicated

For a few years starting in 2009, it seemed one of the best ways to raise VC funds or corporate internal investment was to say “we can beat Blackboard with a new cloud-based platform”. Witness Coursekit / Lore, Instructure / Canvas, OpenClass, LoudCloud Systems, Helix, and even more recently MOOC platforms. There were many articles written as these new systems entered the market, but what if we look back and ask whether the LMS market has actually changed recently? The picture that emerges is one of surprising resiliency by the established LMS providers.

In fact, I would argue that in the past eight years (at least in North America) the only new system that has fully established itself in the LMS market is Canvas. Note that I have combined WebCT and ANGEL within the Blackboard umbrella, but even these systems established themselves more than a decade ago.

In the mid 2000′s, we had Moodle and Sakai CLE join Blackboard, WebCT, ANGEL, Desire2Learn and eCollege as LMS solutions with staying power (let’s say based on having at least 5 mid to large-sized institutional adoptions). Then we have stasis until Canvas emerged in late 2010 (Utah Education Network selection) and early 2011. In just three years of production, Instructure boasts of 600+ institutional clients and 10 million end users for the Canvas platform.

MW-LMS-MarketEntries20130829-1

There were other LMS announcements, and several of these systems are still available but have not demonstrated that they are fully established and have a sustainable business model. These can be shown as sitting on the edge of the market – not fully in and not fully out.

LoudCloud Systems initially targeted for-profit schools, with early wins at Grand Canyon University, Career Education Corp, and a big K-12 win in Colorado. Since then the company has advanced the product line and grown the company, but I have not seen any significant new wins.

OpenClass from Pearson seemed to dominate the conversation at EDUCAUSE 2011 as a “completely free”, “amazing” solution that was going to change the market. Initially targeted at faculty adoption rather than institutional adoption (it now targets both), the system does claim over 300,000 students and 50,000 faculty end users. But there are only a few institution-wide adoptions such as Abilene Christian University, and I am not convinced that 300,000 students using a free system rises to the level of a sustainable model.

Sakai OAE (rebranded last year as Apereo OAE - I’ll change this in future versions of the graphic) has gone through near-death and rebirth as we have described here at e-Literate. It is not truly targeted at being an LMS replacement, however, and is currently used at a handful of schools (Cambridge, Georgia Tech, Marist, NYU). Although this is not fully an LMS, I share it here under its original name for perspective as it was at one point billed as the replacement for Sakai CLE.

BrainHoney is an LMS more targeted at K-12 schools, but with BYU’s adoption as well as its inclusion in the University System of Maryland’s master agreement there had been signs they would fully compete in the higher ed space. But there has been no apparent follow-up.

Helix is the LMS developed by Altius Education with a particular focus on personalization and competency-based program support. After the Tiffin University / Ivy Bridge College loss of accreditation, the Helix platform was acquired by Datamark to expand their service offerings.

MW-LMS-MarketEntries20130829-2

And finally there has been at least one example of an LMS that has come and gone, and two MOOC platforms that have shown signs of competing as the main learning platform for an institution.

Lore came out as Coursekit, and they had the most blatant pitch of “we’re better than Blackboard” as well as the biggest PR push (NY Times, the EconomistForbesTechCrunchFast CompanyIHEChronicle, etc) outside of OpenClass. Alas, Lore as a company was short-lived and the technology was acquired by Noodle last year.

At one point Coursera made statements that they were beginning to compete in the LMS market. There has not been any visible follow-up to these moves, however.

OpenEdX is the open-source learning platform used by edX and has been available to institutions since July 2013. It is too early to tell what level of adoption this platform will have.

MW-LMS-MarketEntriesALL20131104

Does this mean that analysts and reporters (including myself) were wrong about the potential for the new systems to change the market? To a degree, yes. Look at the standard list of LMS solutions in most higher ed selection processes now and back in 2010 – Blackboard, Desire2Learn, Moodle, and Sakai remain; the primary change is the addition of Canvas.

At the same time, there have been fairly significant changes in the LMS market in the past few years, certainly influenced by the success of Canvas but perhaps also influenced by the other recent announcements. LMS pricing power has significantly shifted from established vendors to higher ed customers. Vendors are quite willing to be aggressive in their proposals, either to win a new client or to retain a client. Furthermore, all solutions seem to be much more open as systems, at least in terms of standards compliance, particularly with LTI (learning tools interoperability from IMS).

The bigger change in the market might be the clear direction of mainline LMS providers towards becoming learning platforms that act as the hub of an ecosystem of learning applications. There are varying degrees of success in achieving this goal, but most solutions aspire to be such platforms.

I do not believe that the LMS is a commodity – which LMS a school selects can make a real, long-term impact. I also believe that schools should not ignore the trajectory of the various providers.

Nevertheless, despite the flurry of investment in new solutions, the higher ed LMS market has not changed nearly as much as many people had anticipated.

Full disclosure: Pearson and Coursera have been MindWires Consulting clients.

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Update: Blackboard and Washington Post change the employee count

January 29, 2014 in syndicated

Well that was a major change. As I noted yesterday, Blackboard described its reorganization efforts to the Washington Post for its Saturday profile of the company and CEO Jay Bhatt.

Blackboard today is completely reorganized, compared with a year ago, a process that required layoffs in some departments and new hires in others, Bhatt said. The company counts roughly 2,200 employees to date.

This was interesting to me, since in Fall 2012 Blackboard gave information to both the Washington Business Journal and the Washington Post stating that the company had 3,000 employees. I noted this in my post yesterday:

That is a significant change, if these stories are accurate, going from 3,000 employees to 2,200 in less than 18 months …

The Washington Post just issued a correction to their story today that changes the numbers significantly:

Blackboard today is completely reorganized, compared with a year ago, a process that required layoffs in some departments and new hires in others, Bhatt said. The company counts roughly 3,000 employees to date.

There is almost no explanation for the change in numbers, other than the following:

An earlier version of this story incorrectly spelled Adrenna, the learning management platform. It also incorrectly stated how many people are employed at Blackboard. This version has been corrected.

Blackboard, through a company spokesperson, let me know that part of the change in numbers was that 2012 they had included call center staff in the employee count and this weekend they did not (which I noted in an update to yesterday’s post). They also confirmed that they provided the 2,200 number to the Washington Post. I have requested that Blackboard provide precise numbers and accurate descriptions (number of employees counting or not counting call center staff for both Nov 2012 and today, or total number of staff layoffs over past 18 months), but they have declined to do so.

Nevertheless, the basis of my analysis was public information provided by Blackboard to the Washington Business Journal and Washington Post. These numbers have changed, so my analysis has to change.

I am no longer reporting that Blackboard has dropped 26% of its workforce nor am I reporting that “a large number” have been cut. How much has the workforce changed? According to the new public numbers, not a lot, but the real answer is that we do not know.

Given this significant change, I feel I owe readers some more context, through a timeline, so you can decide how to interpret the multiple posts and updates:

  • Sunday, Jan 26th: Blackboard is profiled by Washington Post, stating it has “roughly 2,200 employees”.
  • Tuesday, Jan 27th (morning): I write a post analyzing the changes, stating that “Blackboard seems to have cut more than 26% of workforce”.
  • Tuesday, Jan 27th (afternoon): After talking to Blackboard spokesperson, I revise my headline to “Blackboard seems to have cut large amount of workforce” and add the update. I ask for precise numbers from Blackboard.
  • Tuesday, Jan 27th (evening): Blackboard talks to the Washington Post and asks them to change the number of employees.
  • Wednesday, Jan 28th (morning): The Washington Post changes its number to “roughly 3,000 employees”.
  • Wednesday, Jan 28th (afternoon): I talk to Blackboard spokesperson again, asking for precise numbers; she cannot provide these, but she shares as much general information as she is allowed.
  • Wednesday, Jan 28th (evening): I write this post.

In my opinion Blackboard is making a mistake here. I understand the argument that they are private and don’t like to share details . . . but they certainly seem to like sharing numbers if no one calls them on it and were in no rush to correct the information from Sunday through Tuesday. Making an exception and being precise this week would answer the question on how much the workforce has changed and put this issue to bed. In the end it is Blackboard’s call on how much information to release, but it is also the general market’s call to figure out how much confidence to assign to that information.

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Blackboard seems to have cut large amount of workforce

January 28, 2014 in syndicated

Update: Please see new post with updated information.

Update: I heard back from the company that part of the discrepancy in numbers is that public statements about employee count may have changed in whether they included the call center employees (which vary seasonally). If I can get some hard numbers from Blackboard, I will publish a new post with more accurate information. For now, please note that the 26% number may be based on inconsistent definitions. Accordingly, I have changed the post title and am bumping this post.

The Washington Post ran a piece over the weekend about Blackboard’s reorganization efforts since Jay Bhatt took over as CEO.

Blackboard has upended its corporate structure and strategy behind closed doors since chief executive Jay Bhatt took over the private company a year ago with a mandate to reinvigorate one of the District’s oldest and most recognized technology brands.

The changes come after years of eroding market share for Blackboard, a pioneer in online learning management software. Bhatt said the changes made in the past year provide a foundation on which to grow the business.

Michael and I have both noted some of the layoffs that have taken place as well as the reorganization and removal of silos. Alert former employee George Kroner, however, noted on Twitter just how significant the layoffs have been. This nugget from the WaPo story is the key:

Blackboard today is completely reorganized, compared with a year ago, a process that required layoffs in some departments and new hires in others, Bhatt said. The company counts roughly 2,200 employees to date.

Compare this to the first story on company layoffs from September 2012, from Bill Flook at the Washington Business Journal. Note that Michael Chasen was still CEO at this point, as Jay Bhatt took over at the end of December 2012.

In a statement, Blackboard spokesman Matthew Maurer said the company has “seen strong growth this year in terms of revenue and in the acquisition of new businesses that have opened up new markets for us.” The company’s total workforce now stands at 3,000 globally, “even with the recent elimination of a small number of roles,” he said.

That is a significant change, if these stories are accurate, going from 3,000 employees to 2,200 in less than 18 months – a reduction of more than 26% of the workforce [see update above].

I’m sure that not all of these losses have come from layoffs, as a fairly significant number of employees have likely left of their own volition. This is fairly typical within companies making such significant changes, however.

For now, it’s worth noting that there are big changes happening at the two biggest commercial LMS providers (Desire2Learn recently laid off 7% of its workforce).

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Instructure releases their third public security audit

January 8, 2014 in syndicated

In the fall of 2011 I made the following argument:

We need more transparency in the LMS market, and clients should have access to objective measurements of the security of a solution.  To paraphrase Michael Feldstein’s suggestions from a 2009 post:

  • There is no guarantee that any LMS is more secure just because they say they are more secure
  • Customers should ask for, and LMS vendors should supply, detailed information on how the vendor or open source community has handled security issues in practice
  • LMS providers should make public a summary of vulnerabilities, including resolution time

I would add to this call for transparency that LMS vendors and open source communities should share information from their third-party security audits and tests.  All of the vendors that I talked to have some form of third-party penetration testing and security audits; however, how does this help the customer unless this information is transparent and available?  Of course this transparency should not include details that would advertise vulnerabilities to hackers, but there should be some manner to be open and transparent on what the audits are saying. [new emphasis added]

Inspired by fall events and this call for transparency, Instructure (maker of the Canvas LMS) decided to hold an public security audit using a white hat testing company, where A) the results of the testing would be shared publicly, and B) I would act as an independent observer to document the process. The results of this testing are described in two posts at e-Literate and by a post at Instructure.

Instructure has kept up the practice and just released their third public security audit.

To be clear, we are continually performing security audits on Canvas. Occasionally, our customers even call for their own third-party audits, which we fully support. But once a year, we bring in a third party for an annual public audit, which helps us remain objective and committed to the security of your information.

This year we retained the company Secure Ideas, a network security consulting firm based in Orange Park, Florida. Their security consultants have spent years researching various exploits and vulnerabilities, building toolsets, and helping organizations secure their networks.

This year’s audit started in November 2013. Secure Ideas spent three weeks doing penetration testing and conducting a general review of Canvas’ security architecture. They presented their findings in this Final Summary Report. In short, they found 0 critical, 1 high, 1 medium, and 2 low priority vulnerabilities. Details of fixes can be found in our Security Notes Forum.

No other LMS vendor has taken up this call for public security testing to my knowledge, and I attempted to describe some of the arguments against the practice here.

While I obviously have not had the same insight into the second and third annual public audits (you can review the results in the public report), I am impressed to see that the company has kept their word.

As such, we see no reason why all LMS providers in the market shouldn’t provide open security audits on an annual basis.

I still think it would help the market in general if more LMS providers adopted this practice of public security audits – it would be useful for higher ed clients and it would be good for the providers themselves.

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by cnyren

#Ladygeeks #37: The Best of 2013

January 4, 2014 in syndicated

LadyGeeks Square 600 This week on #LadyGeeks:

 This week the #Ladygeeks share our most favorite parts of 2013. Watch as we relive our favorite surprises, guests, tech tools we use, and tech tools we can’t wait to use! Join the fun on www.ladygeeks.org or subscribe to us on iTunes and Stitcher Radio.

Hosts: Shari Sloane (@sharisloane)

Katie Regan (@katieregan88)

Layoffs at Desire2Learn: Significant or not?

December 12, 2013 in syndicated

In a little-reported event the week of Thanksgiving, Desire2Learn let go 28 employees. The only public report I’m aware of comes from The Record out of Desire2Learn’s hometown of Kitchener, Ontario in Canada.

E-learning company Desire2Learn has cut about 25 workers from its product development department.

Virginia Jamieson, spokesperson for the Kitchener-based company, said nine per cent of the 280-member product development section was let go. That represents about three per cent of the firm’s total workforce. [snip]

Since it was founded in 1999, the company has grown to more than 900 [sic] employees in several countries.

“So it is a small percentage of that, but it happens to be people in Kitchener, which is where our initial growth was, so it may seem bigger than it really is,” Jamieson said.

While this move might be harsh for those employees affected, it does not sound too significant. But is there more to the story?

According to Sources

Michael and I have talked to 10 off-the-record sources and reviewed Twitter, LinkedIn and Glassdoor as we looked into this issue, and the consistent story we heard was that the layoffs may be much more significant, both in number and motivation. After research, we now believe:

  • while 25 people in product development were let go, there were 28 people in total affected that week;
  • a total of 56 people were let go in the past six months;
  • product development is not the only group affected;
  • the company now has ~750 employees, not ‘more than 900’; and
  • 8 of the 10 sources indicated that the layoffs were related to the company not meeting sales growth targets.

Besides the cuts in product development, it appears that there have been quite a few people (~18) in marketing and several people in business development and project management who were also let go in the past six months.

What has me interested in this story is that Desire2Learn:

  • Raised $80 million in August 2012 in the largest ever VC round for a Canadian company;
  • Was profitable as of the funding round – the funds were not needed for operations at that company size;
  • Has continued to grow in their core market (North American higher education), according to both Campus Computing and Edutechnica; and
  • Seems to be growing in K-12, international and corporate markets.

Given this situation, why would Desire2Learn let go more than 7% of its workforce?

According to Desire2Learn

I asked Desire2Learn to comment on this story, and they provided the following response (at the time I had heard that ~100 people had been let go but now believe the number is 56).

Thanks for touching base and sharing the discussion from the field.  To start, the sources stating that close to 100 people have been “laid off” over the past four months are simply not accurate. In fact, they are way off. There have been some incremental changes over the course of the year and the restructuring that occurred last week impacted 28 people.

The assumption that this reflects the company’s performance versus the recent investment is also incorrect.  We’ve had a great year and the recent changes have nothing to do with the company’s performance – they have been strategic decisions to put the right structure in place to help Desire2Learn’s continued transformation into a global company.

This past spring, we brought in a new product team leader (Nick Oddson, who you met at FUSION) who has tremendous experience in growing global software companies.  He restructured our R&D organization last week to align the department around our new markets and strategic directions.   Other departments were reevaluated and reorganized earlier in the Fall.

As a result of these changes, Desire2Learn is in a great place for continued growth.

There is no story here other than the fact that D2L has set up a foundation to position itself for the next wave of growth.  2013 was an amazing year and we are looking to even more exciting things ahead in 2014!

I also talked to one of the lead investors, Jon Sakoda of NEA, for his perspective.

We are hiring very rapidly and have grown from ~500 people to ~750 people in less than 18 months.  This is a lot of new people, and I think great companies always need to assess their talent and determine how to transition people who can’t be long term performers. [snip]

We added 140 people and churned 56 people since June 1.   Forced churn is good and healthy when you are scaling.  All of our companies do it – it’s a best practice.

Jon also pointed me to a blog post he had previously written on the subject of companies needing to ‘churn’ employees as they rapidly grow, which is consistent with his comments on Desire2Learn.

In a high growth company one of the hardest tests of leadership and loyalty is determining who can make the ascent and who will lag behind. Paradoxically, the bonds of friendship, camaraderie, and trust that make start-up teams strong in the early part of a company’s life become the hardest obstacles to overcome in making the tough decisions that set up companies to take on the challenges ahead.  How can you lead your company through these transitions?  Here are some best practices I’ve seen great leaders follow through the years: [snip]

Don’t Make “Churn” a Bad Word – in a scaling company, there is a relentless focus on hiring great talent to fill important roles.  But it is equally important to assess overall quality, not just quantity, along the way and to be honest about hiring mistakes that are inevitable in a hyper growth environment.  Make employee “churn” a metric that is measured every quarter, and don’t make “churn” a bad word.

What We Know

  • 28 people were let go in November, 25 from product development;
  • There have been additional rounds of people being let go since June, totaling 56 people;
  • The company’s growth in the past year (in north american higher ed) appears to be in the ~6% range, from 11.1% to 11.8% from 2012 to 2013;
  • The company is investing and most likely growing in K-12, international and corporate markets;
  • The company has grown its workforce by 50% in the past 18 months, going from ~500 to ~750; and
  • Since the Aug 2012 VC funding, the company has acquired three companies or platforms (Knowillage, Wiggio and Degree Compass) and opened four new offices (Boston, Melbourne,  Sao Paolo, and Newfoundland) to join London and Singapore as their international offices.

What We Don’t Know

  • How much has D2L grown in K-12, international, and non-education markets not measured by Campus Computing or Edutechnica;
  • How much of the $80 million investment is still available for operations (SEC rules prevent the company or investors from commenting on financial matters); and
  • Whether the end-of-January 2013 massive system outages or the problems with its Analytics engine have affected sales or not.

Additional Thoughts

In the end, I have trouble believing that these recent cuts are solely based on improving Desire2Learn’s growth without needing to correct for slower-than-expected growth. The arguments made by our sources that these are significant cuts driven by not hitting growth targets are compelling. However, there is no smoking gun that I have found to back up these claims definitively.

What I do feel confident in saying regarding employee numbers is that there’s more to the story here than just ‘churn’ alongside aggressive hiring. Since the end of the Blackboard patent lawsuit, Desire2Learn has grown at an average of 13 employees per month (140 in Nov 09, 560 in Sep 12, 750 in Nov 13). Yet the numbers might have actually gone down since July 2013:

  • At FUSION in July the company indicated they had more than 800 employees; yet
  • Today the company has ~750 employees.

Unless the company employed more than 100 summer interns, it appears that the growth in headcount has stopped, if not reversed. I do not know how these public numbers relate to the comment about hiring 140 and letting go 56 since June.

Update (12/16): To be more direct on this point:

  • Desire2Learn had “more than 800″ employees as of July 2013 at the FUSION Conference;
  • The company estimates of 140 added / 56 let go leads to a net gain of ~84 over the past 18 months;
  • This should lead to 884 employees today less voluntary departures;
  • But they claim ~750 employees today.

This discrepancy of more than 130 employees is non-trivial and indicates there is more to the story than we are being told.

I suspect that the problems with the Analytics engine (described by Michael in this post) is having more of an impact than the fallout from January system outages. Desire2Learn invested heavily in its analytics and student success system, yet I have not seen any significant customer wins based on these product lines (although Degree Compass is showing some promise). Conversely, I am not aware of any real problems with the Summer 2013 or Fall 2013 start-of-term system performance, so perhaps Desire2Learn has recovered from the January outages.

Furthermore, the changes being made to refocus product development and even pull back on some of the product release plans makes sense to me. I think that Desire2Learn has overextended itself and would benefit from focusing more on its core product and making sure that its existing customers are happy.

The picture I get is that the truth is somewhere in the middle and yes, I believe there is more to the story than reported in the news article. I believe that Desire2Learn most likely had a difficult year in terms of failing to meet growth targets. Based on these results the company probably had to restructure and reduce middle management layers and headcount in several groups (mostly in product development and marketing). But at the same time, this is a company with financial resources to continue investing in capital projects and product improvements, and even in additional hiring.

This is a situation to keep watching over time, and we’ll keep you posted as we learn more.

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State of the Anglosphere’s Higher Education LMS Market: 2013 Edition

November 9, 2013 in syndicated

I shared the most recent graphic summarizing the LMS market in September 2012, and thanks to new data sources it’s time for an update. As with all previous versions, the 2005 – 2009 data points are based on the Campus Computing Project, and therefore is based on US adoption from non-profit institutions. This set of longitudinal data provides an anchor for the summary.

What I’ve been attempting to do lately is to expand the market definition beyond the US. Last year I used some heuristics:

LMS_MarketShare_20121018-Home

The data has been adjusted to include international usage and online programs in order to capture the rise of online programs, including MOOCs, as a driving force in the future market. Keep in mind that there is no consistent data set to capture the entire market, so treat the graphic as telling a story of the market rather than being a chart of precise data. Sources for this summary include a combination of Campus Computing reports, ITC surveys, company press releases, and extrapolations from Blackboard’s and Pearson’s quarterly earnings. Caveat emptor. While the data captures a broader set of information than previous US-only data, it is primarily focused on north american institutions.

This year, thanks to George Kroner’s great work with Edutechnica, I can more confidently represent the model as covering more of the Anglosphere – the US, UK, Canada and Australia. This is done with a single data source for 2013 rather than interpretations among several sources.

Two items to note:

  • Despite the addition of a new data source, the basic shape and story of the graphic have not changed. My confidence has gone up since last year, but the heuristics were not far off. Sakai is larger than shown last year.
  • There are no dramatic changes to the market in general this year. The same players keep growing (primarily Canvas, followed by Moodle and Desire2Learn), and the same players keep shrinking (primarily Blackboard). The only new potential system of interest this year is OpenEdX.
  • While the data is more solid for 2013, keep in mind that you should treat the graphic as telling a story of the market rather than being a chart of precise data.

LMS_MarketShare_20131104-Home

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New data available for higher education LMS market

November 5, 2013 in syndicated

Despite much talk about the demise of the LMS market, the end is nowhere in sight. Unlike many of the newer learning platform concepts (e.g. MOOCs, free platforms, unbundled learning platforms), the LMS market has an established business model and real revenues. Just today came news of an investment analysis report predicting that total LMS market (higher ed, corporate training, K-12) would triple in revenue by 2018, moving from $2.6B to $7.8B. The LMS ain’t sexy, but it’s still important.

global_LMS_stacked_by_typeThis is why I have found it surprising how long it is taking to move from survey-based and anecdotal market information to harder data directly measured by the actual LMS implementations. Until recently, that is, when there are at least two very useful sites available.

 

Edutechnica

George Kroner, a former engineer at Blackboard who now works for University of Maryland University College (UMUC), has developed what may be the most thorough measurement of LMS adoption in higher education at Edutechnica (OK, he’s better at coding and analysis than site naming). This side project (not affiliated with UMUC) started two months ago based on George’s ambition to unite various learning communities with better data. He said that he was inspired by the Campus Computing Project (CCP) and that Edutechnica should be seen as complementary to the CCP.

The project is based on a web crawler that checks against national databases as a starting point to identify the higher education institution, then goes out to the official school web site to find the official LMS (or multiple LMSs officially used). The initial data is all based on the Anglosphere (US, UK, Canada, Australia), but there is no reason this data could not expand.

Here’s what is interesting with this data-driven approach:

  • The data already goes beyond just the US market, which has been a real challenge for market analysis.
  • The coverage is for the vast majority of institutions rather than a sample. For the US, it is all institutions with more than 2,000 enrollment, but for the others (UK, Canada, Australia) it is complete coverage of all institutions identified in official databases.
  • Given the tie-in to official databases, the data can go beyond count of institutions and be scaled by enrollment.
  • The data already includes additional information such as version number and whether the LMS is self-hosted or not.
  • Due to the light touch, the data can be collected more frequently (several times per year). Eventually this will allow for longitudinal data on LMS migrations.

Of course no data set of this type can be 100% clean, and the Edutechnica site relies on partially-manual cleanup to remove pilot programs and small-scale usage of LMSs. The script counts an LMS if it is the official system at the college or above level. If an LMS is just used by a few faculty or a program, then it is removed. Over time George has indicated that the script is being updated based on the results of the manual process to automatically do more of the cleaning of data.

The plan is to keep the site updated and free, with no plans to either share the institutional data or to charge for it. The reason for not sharing the full data set is to avoid a direct-marketing campaign by vendors.

What are some of the results? The first blog post shared the following LMS adoption numbers:

LMSs_by_the_numbers

Given the data coverage, there is also interesting comparisons by country:

global_LMS_stacked_by_type

There is also some interesting data on product versions used and hosting status that is worth checking out.

LISTedTECH

LISTedTECH was created by Justin Menard, who is Business Intelligence Senior Analyst at University of Ottawa. I was not able to interview Justin, but the about page describes the site and data. First of all, the site is far broader in scope than just the LMS – and there are a ton of useful visualizations based on his dataset. It seems that most data is presented in Tableau for interactive visualizations. For this post I’ll just share some LMS data as images, but head on over for more. It seems like the first data was presented in 2012, but I could be wrong here (Justin, waiting for you in the comments).

Version 1.0
In its first version it was a simple blog with lists and graphs. I had used data and research that I and co-workers had accumulated at work. The site was up about two months before I basically got a cease and desist. I had used part of a legal text from another website and hadn’t taken out there name (Oupsi). They then accused me a copying there data. No chance in hell.

After coming back from vacation (this happened when I was at Disney World during our xmas vacation), I met with a colleague (who is also a lawyer) at work and asked advice. She told me that since I was just doing this for fun (and they had money and lawyers), it would be simple to just shut it down. So I did.

Version 1.1
After licking my wounds (more like pride), I started discussing this with a friend and colleague. I came to the conclusion that I could not let this go (again pride or stubbornness). I started working on the data and adding links to the data I had in the DB. My goal was to redo the site but with proof of where the data could be found. It also made me realise how much data was out there and how much work this would be if I was to do it right.

Version1.2…alpha
Since money is not an issue (I’m helping a wealthy Nigerian family move a very large sum of money out of the country) I opted for Open source systems and modules. The version that is live is a simple Drupal 7 installation. My goal is a simple one. See if it’s worth pursuing this project.

The site is now in beta with version 1.3.

While Justin does not attempt to get 100% coverage, there are over 5,600 institutions in his database. In one post he mapped out the market-leading LMS per country:

Worldwide LMS by country

In another post, he mapped the 451 partner institutions from the major MOOC vendors to determine the identity of their official LMS:

Update: This is not to say that the MOOC runs on the selected LMS as a platform, but that the rest of the school (outside of MOOC usage) runs a particular LMS.

LMS by MOOC

Kudos

Both of these sites are great, relatively new, sources of information on the LMS market.

Update: I should point out that no one to my knowledge has independently verified the accuracy of the data in these sites. In order to gain longer-term acceptance of these data sets, we will need some method to provide some level of verification.

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