In this month’s subscriber newsletter we identify key issues that we think vendors should be addressing at the LMS conferences coming up in July (and September). We also share some observations on LMS market activity in 2019. In particular, we’ll be looking at twelve month trailing data and seeing how market activity compares to a year ago.

Questions We Have for LMS Conferences

For additional logistics on each conference, click on the hyperlinked header. We present the following in date order of the upcoming conferences.

We should point out that listening to marketing is easier than getting to the tougher questions lying underneath. The following issues we raise naturally tend to be somewhat skeptical in nature.

Schoology NEXT

Questions from last year:

  • Will the creation of the president’s role lead to a more aggressive approach for Schoology in both higher ed and K-12 markets?
  • How significant will the higher ed client base be at the conference, and will the company view this as add-on market or as a real growth opportunity?

In the past year Schoology has made it clear that their strategy is to more aggressively focus on their K-12 roots and to not pursue higher ed as a market. Schoology will continue to support its existing higher ed clients, but they are no longer pursuing new clients. As we will show later this summer, Schoology seems to be improving their win rates in K-12.

Questions for this year (relevant to higher ed):

  • Higher Ed – Are current higher ed clients likely to remain on Schoology, given the K-12 focus of strategy?

InstructureCon

Questions from last year:

  • Is the company distracted and losing its focus for academic markets, or is this a bump in the road and challenging transition that the company will navigate?
  • Will Canvas Quizzes.Next finally be in production and ready for broad adoption?
  • How will the Canvas / Bridge divide appear in terms of product development and innovation?
  • How will the company culture change with the near-complete change in executive team since last year?

Instructure is a dramatically-changed company with a different executive team than we saw prior to 2018. Long-time CEO, COO, head of Sales, head of Marketing all gone over the past two years, leading to a different company culture. We outlined some of the changes in this post.

A lot of the changes were driven by the need to address the challenges of serving academic and corporate markets with different products, as well as a need to make operational improvements. Two changes that have become apparent since last year are the move to a product suite approach (including the rebrand of a Canvas Learning Management Platform, or Ecosystem, that includes the LMS as one component) and more of a spectrum approach across markets (e.g. Portfolium acquisition serving both academic and corporate clients).

Questions for this year:

  • Attendance numbers and vibe – Given the change in perception of Canvas as market leader with challenges to serve multiple markets, and given the venue change to a traditional conference setting, will this be a similar conference to previous years?
  • Focus – How focused will Instructure be on their higher ed market and to the core LMS?
  • Data – Following lofty pronouncements (and subsequent pushback) about the potential of its data and analytics initiative (DIG) and what Instructure knows about its users through their data collection efforts, how important will the use of data be treated in Long Beach?

D2L Fusion

Questions from last year:

  • Should the recent pull back in spending on marketing and even Fusion spending affect current customers and prospects, and if so, in a positive and negative manner?
  • How are customers reacting to the streamlined user experience improvements?
  • Can the company improve its customer service and product commitments in similar manner as it has done with overall product design?

We have revised our thinking since last year to not see D2L having a “pull back in spending on marketing”, although the company does focus more on balancing revenue and expenditures than they did in the years following their two large investment rounds in 2012/13. D2L still has a challenge in breaking through the awareness barrier of being the least known of the Big Four LMS providers, and the company needs to make a bigger splash to take advantage of market opportunities opened up by their recent product and services improvements.

Questions for this year:

  • Product development – Last year D2L emphasized a renewed focus on listening to customers and making incremental product improvements that make a big difference in customer experience. Will this trend continue?
  • Data and Analytics – D2L has shared some details about revisiting their approach to data, namely, making it easier for customers to access their data. Are customers seeing these differences and improvements?
  • Head to head – When institutions choose Brightspace over Canvas, it tends to be driven by deeper services and partnership opportunities. What are customers thinking a year or two into the partnership?

BbWorld

Questions from last year:

  • Will Learn Ultra appear as fully ready for institutional adoption?
  • Will the recent financial challenges of the company, in terms of debt ratings and potential changes in ownership, be evident?
  • Does Blackboard view themselves as truly competitive as standalone LMS or mostly as enterprise suite of applications?

During last year’s conference, it became apparent to us that Learn SaaS (the cloud-hosting option) was more important to Blackboard’s future than Ultra user experience, per se. We updated Blackboard’s plans in this area a few months ago.

Nevertheless, Blackboard recently completed the migration of the University of Phoenix to Learn Ultra (away from a proprietary in-house platform) and also won Galileo Global Education contract with schools in Europe and Latin America. There are arguments that both wins were one-off, but there is no denying that these are both important wins. And the recent sale of the Transact product line significantly improved the company’s debt situation.

One other big change from last year is the cancellation of the Blackboard / Moodle partnership through Moodlerooms (now called Open LMS). There have been a lot of changes.

Questions for this year:

  • Customer sentiment – Last year there was a mix of trepidation and resignation, without much excitement. With the Galileo win and with improved corporate finances, will this conference produce more excitement and an improved view of the future?
  • Learn Ultra uptake – Will there be more enthusiasm around Learn Ultra? Will Blackboard be continuing to devote resources to earlier versions of Learn or be pushing customers to make the move to Ultra.
  • SaaS migrations – The SaaS migration is the first step toward adopting Learn Ultra, but in and of itself has become the bigger story. Will Blackboard embrace SaaS as an end goal rather than a stepping stone?

MoodleMoot US

Questions from last year:

  • Will the $6 million of new investment into Moodle HQ be apparent in either the marketing nature of the event or in product innovation?
  • What will be the mood of the Moodle community, given the market share losses and Moodle HQ dismissal of these concerns?
  • What is the impact of Moodlerooms not participating in this event as a sponsor despite it being the largest Moodle Partner?

Based on the conference last year as well as additional interactions last Fall, we believe there has been a shift in thinking at Moodle HQ that goes beyond absorbing a $6 million investment. It is possible that the investment and board changes triggered the changes, but in general we are seeing a much greater willingness from Moodle HQ leadership to acknowledge that losing market share is a problem and not a situation to brush off as only concerning “other” vendors. Moodle HQ now seems to understand the importance of marketing and helping colleges and universities understand the current capabilities and roadmap of Moodle LMS. These are positive changes.

At the same time, the loss of Blackboard as a Moodle Partner does create a financial loss that needs to be replaced. Other partners such as eThink are growing, which should help fill the void, but the $6 million investment will only last so long.

Questions for this year:

  • Do adopting colleges and universities see improvements in their work with Moodle?
  • Will the changed (and improved, in our opinion) viewpoint on market lead to greater interest in institutions wanting to stay on Moodle, or even to find new schools considering this system?
  • Will the product roadmap appear more strategic in nature and not just making iterative improvements here and there?

Update on Market Slowdown

Note: We plan to share information from this section publicly through the PhilOnEdTech.com blog.

Given the LMS market slowdown in 2018 that we first commented on last summer to our premium subscribers and in a public blog post in January, we’ve been watching for changes in overall activity. In particular, we’ve been tracking trailing 12 month (T12M) new implementations data, since that data removes the seasonality variances of the EdTech market. We’ve also been tracking year over year (YoY) performance of individual LMS platforms in the four global regions we cover. As we approach our mid-year report due in July, we’d like to provide an update. At a high level, we continue to see a market slowdown when compared to the same point last year, but we have also seen a trend in the past few months of increased activity – not large enough to reverse the slowdown but worth noting.

The tables below track new implementations globally (all four regions we cover) and in North America. For each table, we look at T12M new implementations data for December 2018 through May 2019 and provide a YoY comparison with the same data collected from December 2017 through May 2018. These comparisons are made by looking at the fixed number of new implementations included in the monthly premium subscriber reports. As many of you know, the number of new implementations in our database per any given period grows over time as new implementations are detected, sometimes by almost 40% over a 12-18 month period. For this reason, we use the static monthly reports to make the year over year comparisons. By this logic, the number of new implementations in the monthly reports lags the eventual actual number of new implementations but enables us to make accurate year over year comparisons that inform observations about the direction of the market.

Note: The following is based on institution counts and not scaled by enrollment.

Some notes worth considering:

  • New implementations are trending slightly upward in the global market. December 2018 T12M data show 277 new implementations compared to 291 new implementations as of May 2019.
  • Some of this uptick can be attributed to the Galileo institutions in Europe and Latin America that migrated to Blackboard earlier this year.
  • The last six months of T12M data is consistently down by 25-35% on a YoY basis.

Now let’s focus on North America.

Some notes worth considering:

  • New implementations in North America are trending down on a T12M basis. December 2018 T12M data show 237 new implementations compared to 197 in May 2019.
  • The average of the last six months of YoY T12M data suggest the market is down more than 25%. 
  • Some of this downward trend can likely be explained by a higher implementation numbers in early 2018 due to the roll-out of Blackboard Learn across University of Phoenix campuses in the United States.

The next three months are likely to shape the trajectory of the market for the rest of the year. The summer is when we are most likely to observe new institutional decisions (First Seen data), it is also a peak for schools completing a migration, and it provides the opportunity for us to speak to large numbers of LMS clients at the vendor user conferences.

We hope you find this analysis valuable. As always, we’re interested in your feedback, and let us know (through Jeanette Wiseman) if you’d like to meet up at any of the LMS users conferences this summer.

Thanks!

Sincerely,

The MindWires Team