Dear LMS Market Analysis Subscribers,

Well, this has been quite a month since our last update.

In this newsletter I share an updated market share summary across five global regions, share additional thoughts about the rising importance of the LMS during the COVID transition, and share notes from my interview with OpenLMS leadership. 

LMS Market Share Across Five Global Regions

I recently participated in the eLearning Success Summit. Why? If someone is going to solicit free content from you and try to monetize it, why not see them drop all pretenses and go the full Sham Wow!. Refreshing candor, I guess, and lesson learned. What follows below is an edited version of part of my talk at that summit. My talk was recorded March 13th and shared online April 24th.

The following is a chart from our market analysis, and it’s looking at five different global regions that we track between Europe, Latin America, the Middle East, North America, Oceania. If you look at who are the primary LMS providers is that the market is converging. If we’d have this conversation 10 or 15 years ago. I’d be talking so much more about the European open source LMSs (e.g. Ilias, OpenOLAT) and how critical they were for that region. Or the Nordic systems Fronter and itslearning.

As you can see, North America is an outlier here, not in terms of which systems are in the top four, but in terms of market share among those systems. In other words, we’ve consolidated globally mostly on the big four – Moodle, Canvas, Blackboard, and D2L. There are some systems in the second tier – Sakai, Chamillo, itslearning – but none have more than a few percentage points of market share in any one region.

Worldwide, Moodle dominates it. In large part, Moodle created or opened up the eLearning market. Many countries would not have basic eLearning infrastructure available without Moodle existing. Canvas has become dominant in North America (US and Canada).

And North America also dominates as a region in terms of money spent on learning platforms, and therefore that region drives a lot of the definition where the market is going. In North America, you have a a situation where Canvas is the fastest growing and now the largest LMS. That system is growing quickly in other regions, but in terms of installed base, it’s still a Moodle world outside of North America. Some things you’re seeing in the North American LMS market, you might see in other regions a couple years later, but it’s just more more of a common market than it used to be.

Blackboard Learn still has a large market share worldwide, although it has been declining in numbers for years. The best wins recently have been in southern Europe, Latin America, and the Middle East. D2L Brightspace is the system that wins the most head-to-head competitions with Canvas for open evaluations, in several regions.

Growing Importance of the LMS

Five or 10 years ago, the dominant reason for vendor lock-in was the difficult purchasing cycle for universities and the difficulty of a transition overall. At the time, the sense was that you get what you get, so stop complaining. I think the market has changed dramatically from 10 years ago. Now there’s much more of an emphasis on scalability / cloud hosting and ease of use / intuitive design. The LMS today is not the same thing you’ve had 10 years ago. The LMSs have adapted so that even if you bought it five to 10 years ago, your system likely doesn’t look the same as it did back then. It’s actually advanced quite a bit with. The market is not as healthy as I’d like, but systems are much more responsive to customer demands today than they were 10 years ago.

Having said, you’ve got legacy architectures that have limits. When you designed a system, there are certain parts of the architecture that you can’t change, at least in an elegant manner. The origin of the market built around courses and not around learners has proven to be limiting as we see new pedagogical approaches with mastery learning and competency based education. Vendors are adapting, but it’s often in spite of their core architecture rather than because of it.

With COVID-19, most institutions have moved their entire operations online, at least temporarily, and with no warning. We’re beyond online and hybrid programs or faculty that have built in the LMS to their face to face courses, making them tech enabled. Previously faculty might not have just put a syllabus and grade book online, but guess what? Now instructors are doing it all through technology. I think people are (re)discovering just how important the LMS is, and realizing how important this core e-learning infrastructure is for an institution, even if the campus LMS doesn’t have all the features that people want it. It’s mission critical. 

However, a school can look really bad if they don’t have a good LMS, or if they don’t support it properly. In the UK, the system is called a virtual learning environment (VLE). I think that naming of what most others call an LMS captures the element for virtual online world. This is your learning environment. This is the face of the college and university, and it’s critical now. 

Notes from OpenLMS Interview

Blackboard announced last month that it has sold its OpenLMS (the LMS formerly known as Moodlerooms) assets to London-based Learning Technologies Group (LTG), a publicly-traded conglomerate whose holdings include Rustici Software, best known for their work on xAPI standards and SCORM Cloud. The sale price was roughly $31 million.

Blackboard CEO Bill Ballhaus positioned the sale as increasing Blackboard’s focus.

“This strategic transaction enables us to accelerate our efforts to drive the next wave of EdTech innovation via our platform with Learn Ultra at its core and sets the stage for us to deliver a dynamic and personalized experience, fueled by data, to advance learning. [snip]

“Our most complex days are behind us.  We are now more focused than ever on driving innovation in our key business areas of teaching and learning, K-12 community engagement, and student success.”

Phill Miller, whose professional lineage includes ANGEL Learning and Moodlerooms, has departed Blackboard and is now leading the new LTG OpenLMS group.

I had the chance to interview the OpenLMS team in March, with a Blackboard exec in attendance, but with COVID-19, I never had a chance to write up a blog post. Nevertheless, I believe this is still an important development for those interested in global LMS markets.

Purpose of Deal

Based on the interview, the situation that led to LTG approaching Blackboard was that OpenLMS was getting growing as a business, but it was buried within Blackboard. Both parties felt there was more value for OpenLMS outside of Blackboard.

Blackboard’s strategy has been to sell more products outside LMS; as we have reported they are not seeing growth in LMS sales and weren’t really tapping into the worldwide self-hosted Moodle market (i.e. helping institutions that are on self-hosted Moodle but need to move to a more professionally-managed option. The basic idea was to let Blackboard focus on Learn LMS sales and let LTG go after the self-hosted Moodle market more aggressively.

Details

The actual deal is a carve out of OpenLMS assets rather than a simple acquisition of a division, and it will take a few months to finalize service agreements and additional details. As part of the deal, OpenLMS execs said that 61 employees and a number of open positions (future hires) will move over to LTG. The result will be an independent business with offices in Indianapolis (US), Bogota (Colombia), and Adelaide (Australia).

LTG plans to sell with a broad-based campaign into the Moodle market, as part of the deal they have committed to certain sales levels back to Blackboard. LTG OpenLMS will also sell Blackboard products such as Collaborate and Ally as part of an associated reselling agreement.

I asked if the new LTG OpenLMS company will continue their focus on higher education or shift more towards corporate learning, based on the current focus of LTG’s current portfolio. Phill Miller answered that the OpenLMS business is skewed towards education and regions outside of North America, and they see that continuing. LTG plans to grow corporate learning, but they see that move as augmenting the core education business. While OpenLMS has dozens of K-12 clients, there is no plan to invest in that part of the business. In other words, higher education is the core of OpenLMS future plans.

M&A Strategy

Miller had long wanted to be more aggressive with an M&A strategy – targeting other Moodle Partners or Moodle-based services organizations, and now LTG plans to back this approach more than Blackboard was willing to do. This M&A strategy will likely impact the geographic markets that LTG goes after.

Miller sees himself as a big fan of Moodle as a community, stating that Moodle has been most important LMS in world. In his description, Moodle has allowed experimentation at low cost, and the eLearning world would be 10 years behind if not for Moodle. The Commercial Moodle world is fragmented and messy, however, and it could be organized better.

What We’re Watching

We’ll watch to see whether this acquisition of OpenLMS by LTG results in a different, or at least accelerated, strategy moving forward. I agree that the Commercial Moodle world is fragmented, which has been both a blessing and a curse. In particular, we will watch to see what the prospects are for a non Moodle Partner to developing a bigger presence when that approach runs counter to the strategy that Moodle HQ is pushing.

We wish you the best as you deal with planning for fall 2020 and beyond. Stay well and please don’t hesitate to reach out if you have questions or comments. We’d love to hear from you directly.

Sincerely,

Phil on behalf of The MindWires Team