EdTech Inflation – Expectations for Future

Welcome to a special podcast episode of MindWires Musings where we discuss the topic of LMS and other EdTech platforms potential moves to increase pricing. This is a complex subject without simple answers (yet), but one that needs to be considered by schools and vendors and investors alike.

Click here for podcast episode or on image below.

Please note there is a full transcript available on the podcast episode page.

Class for Zoom – Is It Real?

Welcome to a special podcast episode of MindWires Musings where we discuss the new market entry Class for Zoom, a new product from a new company led by an old hand. Blackboard co-founder and longtime CEO Michael Chasen.

Click here for podcast episode or on image below.

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

A Year Like No Other

We’ve all known that 2020 is a year like no other (and let’s hope that includes future year comparisons), and we know that LMS usage is increasing across the board as schools rely largely on remote and hybrid education. But there has been an open question whether the LMS market would decrease in selection activity (adopting a new LMS or switching vendors). On one hand, there was an argument that schools needed to focus on teacher preparedness and academic technology support (including the adoption of new tools), therefore the market activity was likely to decline over the next few years. On the other hand, there was an argument that LMS usage and support has quickly gone up the priority list for most schools, and there is a need to get off the ball and make sure schools have the system they need for the future.

Most indications thus far support the latter argument with the LMS market appearing to heat up in 2020. Before we share this information in a public blog post, we’d like to share some initial findings with you.

K-12

Let’s start in the North American K-12 market where there has been the strongest argument for increased LMS market activity. Why? According to our data, for districts with more than 2,000 students (which represents 85% of total K-12 enrollment in the US and Canada), we estimate six out of ten of those districts have at least one LMS, and eight out of ten students are in a district with an official LMS. In other words, the K-12 LMS market is not yet saturated, and many schools have had to adopt a district-wide LMS for the first time this year. And if you look at the data below (that includes districts with fewer than 2,000 students), we are indeed seeing this spike even though we still have three more months to go. We are not back to the 2015 peak of the market, but we are seeing a reversal in the trend.

Higher Ed

In the higher ed market for four global regions (North America, Europe, Latin America, and Oceania), it is a different story without clear conclusions yet. Looking at Trailing 12 Month New Implementations, we had been seeing an increase in activity until the pandemic hit in the spring, when the market dropped.

Where we are seeing the market increase is in the revived or new LMS evaluation projects. Most schools in the five regions we cover already have an LMS and have not had to deal with emergencies – there has been little reason to switch this year. But at the same time, we are seeing significant LMS evaluations that seem to indicate increasing market activity. As a sample (we are hearing of several others privately):

  • UCLA is completing its LMS evaluation and migration plans.
  • SUNY has released its RFP for a systemwide LMS.
  • Tennessee Board of Regents (TBR) is in the final contract stage of its systemwide LMS decision – expect a separate blog post on this one later this fall.
  • NYU is moving from Sakai to D2L Brightspace.
  • Texas A&M and several CalState campuses are moving to Canvas.

Treat the higher ed market increase more as us reading the tea leaves than definitive data analysis.

Investor Activity and ClassEdu Market Entry

At the same time, we are seeing an increase in investor interest in the LMS market – in terms of new investors getting involved and new investments to consider (nothing can beat the Instructure sales process, but this is different). One example of this activity is the return of Michael Chasen – co-founder and ex-CEO of Blackboard – to the EdTech space with an initial product that appears to be an LMS built on top of Zoom. Class for Zoom.

What is noteworthy beyond the Chasen and Blackboard angle is the amount and timing of investment. The company and its core idea originated in March, and six months later ClassEdu has raised $16 million. For background reading, we recommend:

  • YouTube video introducing Class for Zoom.
  • TechCrunch article on the company and product launch (I still can’t believe I’m recommending TechCrunch, but this article has a good description).

In addition, we recorded a MindWires Musings podcast episode where Jeanette Wiseman and I break down the news and discuss whether this is a real issue for the LMS market or not (tl;dr – it is, at least in the short term). Expect to see that podcast in a separate newsletter this week.

More to Come

Expect more to come soon. There’s lots of market news emerging this fall, and we plan to share a mini-report on new K-12 LMS market data in early October.

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

Dear EdTech Market Analysis Subscribers,

We’re happy to provide early access to our next episode of MindWires Musings, where we discuss the non-COVID news of the day or week in a more casual format. A true discussion. This access is intended for current LMS Market Analysis subscribers, although we are likely to cross-post this story on PhilOnEdTech blog soon.

Miami Meltdown (podcast)

In this episode, Phil Hill, Jeanette Wiseman, and Kevin Kelly discuss the Miami-Dade disastrous rollout of centralized learning platforms and what lessons we can extrapolate to EdTech in general. For further reading:

You can access the recording here or by clicking the image below:

Transcript

Phil: Welcome to MindWires Musings, where we take a more relaxed attitude and discuss the news of the day in EdTech, and if ever there’s a day or a story where we need to have the extra libations, I think it’s this one.

I’m here with Kevin Kelly and Jeanette Wiseman. So welcome Kevin and Jeanette.

Kevin: Hey, thanks.

Phil: And before we get started, while this is part of it, Jeanette, what kind of fancy cocktail have you brought today?

Jeanette: You know, I’m so glad you asked. Someone gave us, and I sent this to you before, but someone gave us a bottle of Texas Sotol, which I had never heard of. It’s Desert Door, Texas Sotol, which I’m drinking now. It reminds me of mescal. The website calls it “reminiscent of a desert gin crust with a smoothie [00:01:00] sipping tequila.”

Phil: Well, we learned something new each time with you. I’d never heard of sotol or sotahl. I don’t know how you pronounce it.

Jeanette: Sounds fancier. I like it. What it. How do you say it, Kevin?

Kevin: In Spanish would be sotol.

Jeanette: Sotol – so I said it right. So yeah. Have you ever had it Kevin?

Kevin: I did try it in San Diego in a tequila bar. They had mescal, sotol, and tequila, and I tried one of each.

Phil: And Kevin, you’re going empty today, huh? As we bring you into the Musings podcast.

Kevin: It’s not for lack of desire. And so when we’re finished, I will debate between gin and tonic using botanist gin (not the sotol which has gin like qualities), and or grapefruit sculpin.

Phil: Well, for me, it looks like it’s a sipping day. I’ve got the High West Rendezvous Rye with just a splash of water.  [00:02:00]It’s a great rye. I’ve always enjoyed it out of Utah. It’s got two different ryes – a six year old rye blended with a 16 year old. So it’s got some good, complex flavors. But in any case, that’s my drink. We’re going simple with the sipping today.

So what we do want to talk about, which is actually it appears to me that this is the biggest meltdown we’ve had certainly in the fall with the Covid transition that schools are going through. And, you know, we’re hoping this is the worst that we get, but it comes from the K-12 world and we have a blog post about it that will link in the show notes. But it’s essentially the Miami-Dade K – 12 school district, which have either (I’ve seen both numbers, 270k or 345k students). Either way, I think we can call that a large number of students, but they have a situation. Where they were in the spring, they [00:03:00] were using Microsoft Teams with Zoom integrated into it, but they had multiple systems, very fragmented. So once we got into the summer, the initial reaction from the district was ‘we think we’re going back face to face.’ So it seems like they delayed the decision making. But then by July, it was apparent that they were going to have to go remote again to start the fall term. And they signed a deal with the company K12, Inc to provide sort of a combined learning platform from the company that’s more known for their virtual charter schools.

But essentially, this platform play, they they have the software that ties everything together. They use D2L Brightspace as the LMS, at least in the six through 12 grades. And then they use this video platform called NewRow that was acquired by Kaltura as the video conferencing. And long and short, I won’t go into all the details, [00:04:00] but there has just been a series of disasters such that they can barely operate the school for this large of a district. And over a period of a week and a half, they kept trying. Things got more complicated. There was a cyber attack, but the net effect was they had a 14 hour board meeting and ended up terminating the contract with K12. And they’re sending everybody back to Microsoft Teams and Zoom.

And so it’s the worst disaster we’ve seen. And, you know, to be fair up front, I’m actually surprised we haven’t seen more of these types of stories. So it’s sort of a testament to the resilience of the EdTech market and schools that we haven’t seen more of it. But so we wanted to talk about the situation, what happened there and what we can learn about it. But I guess I’d start out. Have you guys heard of any other situations on the scale of this type of problem?

Kevin: The entire country of Liechtenstein. [00:05:00]

Phil: Are you sure that’s bigger?

Kevin: No, it’s not, actually, but it’s just a scale of country versus county.

Phil: Come on, he leaves a little trail that will have to go down later tonight.

Jeanette: No, I haven’t I haven’t heard anything else that was quite as I think dramatic is this one. Yeah, maybe the nicest way to put it.

Phil: Yeah, and the more we dig into it, I think that there’s additional stories and it certainly affects more than just the K – 12 market. And in particular, one of the things we’re following up on, or I’m doing some additional research on, is the role of Kaltura, because it seems like a lot of the when people said the K-12 platform wasn’t working, a lot of that really came down to NewRow, which is the company that was acquired by Kaltura. And that was the specific point of failure is what I’ve heard. And at the same [00:06:00] time, we’re getting a lot of reports of video problems in the Higher Ed market with Kaltura, but that’s with their lecture capture. So I’m trying to figure out if there’s a connection between them. But there’s the story seems to be broader than just K-12.

Jeanette: It does seem to be broader than just K12 the platform and the K-12 market. That’s a little bit confusing, I think. But I will say that reading the Wired report today, I mean, it seems like it was much broader than just technical platform issues.

One of the things where I was “what?!” is that a second grade teacher realized that the curriculum was not vetted at all, and that the second grade teacher noted that if their kids at the end of a quiz there was a question of did you like this question? If the kid said yes then they got an A.

Kevin: Isn’t that how you’re supposed to set up every quiz?

Jeanette: Right, [00:07:00] exactly. Do you like me? Yes. Ok, you get an A.

So I think that that was I think beyond just the technology in this case, it sounds like there was some pretty deep seated issues with this platform in general and with the offering.

Kevin: Deep seated meaning therapy required?

Phil: Yeah. And we should be clear what we’re saying, the word platform. As you’re pointing out, this was sort of combined – it included digital content and curriculum that teachers could use and adapt. So it was more than just the technology platforms, they got into the content as well. So, yeah, definitely the more you look at it, the bigger the story is.

Jeanette: Oh, I was just going to say, I mean, I think a lot of people are going to really dig into the fact, too, that this is a platform. I mean, if you’re really looking at public education and the role that public education serves, especially [00:08:00] in the K-12 market, in that space, one of the things that was clear about this to me, reading the Wired article today, was that this content was for charter schools as well. And there’s so much pushback against charter schools and the level of curriculum development that happens in some of those. Some of them are great and some of them aren’t. And that’s primarily what K12 the service was offering. And so I think that that’s going to be that’s part of the news story, at least for me.

Kevin: I was just going to say, beyond that, technological problems and the issues of platforms and content, and which K-12 are we talking about – the platform or the educational construct?

I think there’s the human factor and the idea that you could make a decision of this magnitude weeks before the fall begins is really ludicrous. Without having done any testing, without having gotten any feedback [00:09:00] from anybody in the district, without having checked it out, at least from, again, the things that I’ve read in your blog and the Wired article, it seems like this set itself up to be pretty dangerous.

And if you’re familiar with the literature around airline crashes, they typically require at least seven small things to happen in some order in order for the whole plane to go down. And this seems like it had that happen in spades.

Phil: And I think the human element – there’s the lack of in going into this, and that also ties to what Jeanette was saying, because when you’re talking curriculum, the stakes get higher than just technology. But nobody seemed to be involved in the decision to go with this new platform other than the central administration. And then so you’re set up if anything goes wrong, you’re going to get a lot of pushback. But then you look at it, the decision where [00:10:00] they’re now saying, ‘hey, this really was a four to six month project, but we tried to do it in six weeks.’ Well, for me, the biggest story for me is how could you possibly do something so high risk with a platform that’s never been scaled to these numbers? And I think the NewRow usage was quite new, and do it without any input and then try to force it into a six week schedule with no backup plans. And as I said in the Wired thing, there’s just tremendous amount of hubris to make that type of decision and to risk the education of that many students. So there’s just a lot of hubris as well on the decision making about how the project was run. To me, that was actually the biggest story to me.

Jeanette: This is I don’t know, this seems beyond hubris. There’s something to this was so not well thought through that it speaks to me of something [00:11:00] else. Nobody was informed. The board didn’t vote on it.

Kevin: It had a no bid contract.

Jeanette: The no bid contract. To me it is shifty, this whole thing. It’s shifty. Hubris? meh. Shifty, shifty, I think.

Phil: But there’s no direct, to my knowledge, there’s no direct indications that go beyond it. I definitely agree that, boy, this raises a lot of questions about how this happened. So I guess I’m a little bit more tolerant on that level.

Jeanette: I know you always are more tolerant and I’m always more of, I look for the scandal because that’s a lot more fun. And maybe this is a good time to just kind of talk about some of the issues that I do see.

I think we we see in the K-12 space is that there is, especially with these large districts with sometimes hundreds of thousands of students, and [00:12:00] their procurement process is not well defined and is usually led by people that don’t necessarily know a lot about the technology. And it’s not that I think most of these people aren’t really well meaning. I don’t think that what happened here is necessarily a case of it. But I think a lot of times compared to Higher Ed, which sometimes is also in the same place, but there is not really well formed decisions that are made for big decisions, not only impacting teaching and learning, but also budget. And this seems – at the very best – to be a clear example of that.

Phil: And I tell you, it goes beyond the decision. It’s just management capability. Part of my background, I’ve done several project recoveries. And, you know, there’s a lot of common signs when you see projects that go bad, and this [case] just has many of them laying out. There a big [00:13:00] bang approach, no fallback, no iteration, not listening to the idea that this has never been done and it should take months. So they should have thought from the beginning, let’s do an iterative approach. We definitely don’t want to make this worse than what was happening in the spring. We can’t solve everything, but let’s at least make it better. So I look at the management capability and did anybody raise these issues?

Jeanette: Are you saying the management of K12, the company, are you saying management at the district level? Because I think a responsible vendor should have brought these things up and said we have not served this many students before, we need more time to do this. We will go without a contract for the next six months, or we will give you a discount, maybe not a low discount, but all will roll this out in the middle school, we’ll perfect it. And then for the second semester we’ll do this. But in the meantime, here, use [00:14:00] our curriculum. Here is Teams and Zoom, and people can start getting trained up on it. This is a large district in the rollout itself. I think a lot of it goes on to the vendor for not doing that effectively.

Phil: So to answer your question, I primarily mean the district office, they’re the ones who are making the decisions. This was not a virtual charter where the operations were run by the company. So the primary responsibility in my mind lies with the district. Now, I completely agree with you that the vendor K12 should have been going in there saying this isn’t a good idea or this is risky or you should try it this way.

And I do have an unnamed source claiming that that happened, and the district didn’t listen. However, whether that’s true or not, then there’s a question. If they knew it was this risky, should they be even agreed to do [00:15:00] it in the first place?

Jeanette: And why did they agree to do it?

Kevin: I’ll tell you why.

Jeanette: Why would they agree to go with this provider?

Phil: I can’t answer that.

Kevin: On the empathy side of the equation, and then we’ll get back to angry Kevin, the idea that, OK, we made the wrong decision over the summer. OK, so now we’re back in emergency mode. Let’s find something that’s better than what we did in the spring. I understand all the motivations, but the execution on every side of the equation, as Jeanette has brought up, is it’s all been done wrong.

And so they gave themselves too little time. The vendor didn’t help him out at all. And they made this decision by fiat without any feedback or or input and testing. Who’s paying the price? The kids.

Jeanette: And the teachers and the parents.

Kevin: Of course.

Phil: You said this quickly, [00:16:00] I don’t want to lose this. I want to hit the point that when they finished the spring term as of early June, they seemed to think they were going back face to face. So they really lost probably a month and a half of planning because they thought they’d be able to go back face to face. So they cut their time in half simply by that lack of planning and lack of realization. And I think we’ve seen a lot of that in Higher Ed as well. People either thought they would go back face to face or basically took way too long to seriously consider planning for the fall. And how do we make sure it’s better quality than what we did in the spring?

Jeanette: I absolutely I agree with that. I think that there was a lot of time lost with the decisions of some of the administrations in Higher Ed. I do want to go back for a second and just say, though, that what I think is interesting about the K-12 cases, that I would find it shocking [00:17:00] if there wasn’t other vendors vying for this work, that had more experience. So I think that that decision making process, I don’t know if there’s going to need to be any reason to uncover it since the contract was not signed. But it just seems like there had to be other people knocking on that door saying, hey, we can help you. So why did they choose to go with K12?

And I think going back to what you originally said, Phil, about how we really haven’t seen a lot of other huge mishaps like this, you know you know, everyone’s gone through some issues, I think, this fall, but nothing quite at this scale. Is that because so many people are relying on tried and true platforms that can hold the volume of users? So, you know, the LMSs have been remarkably stable through all of this, even though the load has increased. You [00:18:00] are really safe going with the Google Classroom. You know, Google can handle it. And same with Microsoft Teams. And Zoom has had some outages. You know, everyone’s had these outages, but for the most part, they get back up. And how much risk can you take for some of these smaller companies that can be doing really innovative things? And that’s the hard part.

Phil: One thing to note is it was NewRow where most of the problems appear to have come from. And Kaltura is having a series of performance problems that have led them to do an emergency migration to AWS, which certainly is giving indications that they’re way over their head in their system performance. And I need to get the details on it. But part of what this points out is part of the reason we have scaled so well in EdTech, for the most part, is because of how many companies have already gone to the cloud, that already have the built in scalability. And I wonder [00:19:00] if what’s happening here is there were elements of the system that hadn’t migrated to the cloud and therefore they couldn’t handle this transition. Some of that is speculation. But that’s one of the things I’m going to try to follow up on.

Jeanette: So the one thing I will have to say, I do have a little bit of experience with Kaltura. Full disclosure that I did work with them for a really short period of time a long time ago when they were first starting.

The one thing that I wonder, I know that some of these platforms are newer to them, their act through acquisition. But Kaltura works in more than just the education verticals, so that they also have large contracts with, you know, big media companies like HBO and ABC. They get hit for their video usage a lot. The education usage may be different. I don’t know what those platforms look like, but they know typically can handle volume to a certain extent. So what’s going on here seems to be [00:20:00] different than, you know, some of the things that they’ve done in the past.

Phil: Huh. That’s interesting.

Kevin: Well, you have to toss in the denial of service attack and some other factors, too.

Jeanette: And I’m not saying that Kaltura has a spotless record when it comes to some things, but they’re not only working in the education vertical.

Phil: We’re missing some information.

Jeanette: Yeah, absolutely.

Phil: There was a denial of service attack, and it was somewhat ironic that the person responsible was a 16 year old student within the district. And I am curious, does that student get an A in his computer science course or not? Or maybe he doesn’t get the credit because he got caught. So that would lower the grade. But they also had some other network configuration problems through Cisco. So I don’t know that we had the seven errors like in an airplane crash, but we certainly had multiple overlapping errors.

What are the lessons that we see? And one of the ones that we’re already talking about is don’t jeopardize this number [00:21:00] of students and faculty and teachers without taking it seriously how much they need stability, and don’t go for grand visions and actually make their lives worse. I know that sounds generic, but this I think that’s one of the huge things that happened here. Somebody should have stood up and said, we can’t do this to these students and teachers and parents. This is too risky. Somebody should have been standing up screaming about this.

Kevin: Well, and I I would say not only should the vendors have worked with the district better, as Jeanette mentioned, but the superintendent’s staff should have as well. And so, Superintendent, I don’t know what it’s like in that county in Florida, but sometimes they’re elected positions, it doesn’t qualify them to make technology decisions, but they have to be leaders and accept multiple points of view before just jumping into something. And as you said, when you’re choosing a mission critical application for that many thousands of [00:22:00] students, then you have to do the due diligence, and none of that took place.

Phil: Now I’ll add in another one, partially just to get Jennette riled up. K12 is not playing games. They just they have responded – So that’s the board’s decision, we’re not going to dispute the cancellation of the contract. We’ll take the blame. We didn’t get the job done and no excuses whatsoever.

So I actually think one of the lessons that we have, is a positive lesson, that even though there’s a sort of a mixed up story that we need to dig into it about what happened, I give them high marks for simply saying we screwed up and and not giving excuses for what happened. Now, I’ll sit back and hear the response.

Jeanette: I mean, my first thing is, would they have that response if a contract had been signed? Number one. So, I mean, what are they going to say? They have nothing legal know, saying that they have to have payment. [00:23:00] So I’m not sure. I do think it’s an upfront thing to say? But it would have been more upfront for them to say, hey, we can’t do this. There’s a lot of onus that needs to be put on them for how this was rolled out and to not say, hey, put the brakes on some of these things. So, yeah, OK, but there wasn’t a signed contract.

Phil: I at least got a “yeah, OK” out of you.

Jeanette: Yeah, it’s true.

Kevin: I thought it was interesting that they had six days of training, but they weren’t able to log in, so they’re just sitting there watching people to show them what you’re going to do in a couple of weeks.

Jeanette: I mean, and you have to know, every single teacher was like, are you kidding me? We can’t even use this. And can you imagine if you’re a teacher that really is not comfortable with technology and you haven’t been even able to log on and you’re supposed to be able to do this in six days and get your whole class up and running right there? I don’t know why the red flags [00:24:00] were like, OK, we got to stop this. We had to go back. They can’t log on during training.

Phil: Well, all right. Let me let me take this bit. They did have red flags up. I’ve read where people were screaming even before the school year started. The problem was nobody changed anything based on the red flags.

Jeanette: Exactly. Where was the administration then, saying, OK, this is not going to work. We got to go back. This is what we have to do. So right there, that is such a lack of leadership. You got to just say it. I hate saying that, but it just is. It is if you’re and if your teachers cannot log on to train on a platform that they’re going to have to instruct kids that have not . . . 

It’s just a really hard situation, and it’s not there for them. And it was inexcusable to me. Yes. Sorry. This is where my classroom teacher comes out and I cannot … The [00:25:00] struggles that those people were going through and the parents, and imagine the one thing about Miami-Dade is that it’s an incredibly diverse population of students. And I think about how many parents who don’t speak English or English as a second language, trying to sit side by side with their kids, trying to help them learn. And that’s a struggle that those people are going through. And the platforms are not even working? Uff, that infuriates me.

Kevin: Well, I’ve been there. It was a much smaller N count. We had thirty thousand students at San Francisco State. But when I was the head of the online teaching and learning group, we did a Moodle upgrade, and we had to roll it back two days before the semester began.

By hand, the pilot faculty, we had to put their classes back together in the previous version after [00:26:00] they tested it and built their classes in a new space, because it wasn’t going to work. The page loads because of the coding in the new version of Moodle at that point were so it was going to bog down the entire system. Our virtual servers couldn’t handle that.

So that thing that you brought up, Jeanette, there’s got to be a go / no go point. And they just it’s like somebody driving around after drinking some sotol and not stopping for any of the red lights.

Phil: I think you disqualified yourself for the empathy. I mean, you just described a situation where people listen, saw the red flags and took action ahead of time. If you really want empathy, you guys should have ignored it and waited a week or two in and then then started HARAGA.

Kevin: Ahhh – Exactly right.

Phil: So we’re getting near the close of this. Unfortunate situation, but some of the best learning happens when you look at breakdowns [00:27:00] in the system. So that’s one of the reasons I think it is important to look at this story and to keep digging a little bit deeper and see what other lessons are out there, because, as we said, it actually affects a lot more. I mean, there were plenty of people that got affected by itself, but it actually has broader implications. So it’s great talking to you guys and now we know how to get you triggered and really get you get you emotional on the subject.

Well, thanks, Kevin and Jeanette. And we will follow up on this story. Bye.

We wish you the best as you deal with the Fall 2020 term 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