Dear Premium Subscribers,

As a follow-up to the June data we sent out earlier this month, we’re providing some additional analysis of the market slowdown that appears to be continuing. There is still room for a correction in July and August, but we see the market as unlikely to reverse the slowing trend in the near term. 

For the trailing twelve month implementation data (a lagging indicator that correlates somewhat with revenue when scaled by enrollment), we look at North America and combine Europe, Latin America and Oceania into one group which we’ll call Rest of World. We are particularly interested in trends within the big four platforms (Blackboard, Brightspace, Canvas and Moodle) so break those out separately and within particular enrollment bands, both by platform and across the entire market. (Click here for Excel file)

Some notes:

  • The market as a whole is down 39% compared with a year ago in terms of number of institutions changing LMSs. Note that Blackboard has increased largely due to the University of Phoenix implementation across multiple campuses.
  • North America is down 52% while Rest of World is up by 33%. Rest of World is being buoyed mostly by new Blackboard implementations in southern Europe and Latin America (Galileo campuses, owned by Providence Equity).
  • Globally, the enrollment bands that are seeing the steepest declines are 2,501-10,000 (-66%) and 10,001-20,000 at (-48%). The other bands are also declining but not as rapidly: 1-2,500 is down 18% and 20,001+ is down 27%.

While these are steep declines, we should note that these numbers do not 100% translate into revenue numbers for organic growth, as they do not include K-12 market or Canvas price increases or cross-selling of Arc and other products. Nevertheless, we are seeing the market slowdown as continuing based on this data.

Shifting to the First Seen indicator (more of a leading indicator that correlates somewhat with bookings), the outlook is mildly brighter. Keep in mind that the First Seen data is harder to come by and not quite as reliable on a quantitative basis as the new implementations data. This indicator is nonetheless useful and was critical to our detection of last year’s initial slowdown.

Some notes:

  • Globally the trailing six month First Seen data is down 40% year over year.
  • North America is down 67% and Europe is flat (again largely due to Blackboard).
  • In North America, Blackboard and Moodle aren’t showing any activity, whle D2L and Canvas are both down sharply. 
  • Not shown in data yet – we have learned of two significant D2L wins that we expect to put into July or August data once fully confirmed. American Public University and Purdue Global are both rumored to be moving to D2L.

In short, the overall data point to continuing, and perhaps worsening, slowdown in North America offset by some growth in Rest of World driven largely by Blackboard’s pick-up of new implementations. These trends appear for large and small campus sizes for the most part.

Sincerely,

The MindWires Team