November 2018: Fall Updates from LMS Vendors

This month’s newsletter features updates from LMS vendors. Some of these updates were gathered by visits to conferences and headquarters, others from press releases and news articles from various outlets.

We also share some observations from EDUCAUSE, where, once again, Phil avoided as many sessions as possible.


D2L: The Magenta Release and Observations from a Visit to HQ

In late October, just before the Halloween rush which coincides with EDUCAUSE, D2L announced its Magenta Release. The main features included in the release are:

  • New rubrics that make it easier to provide structured and meaningful feedback for students
  • Assessment of learning that happens outside the digital environment
  • Anonymous grading and more powerful quizzing
  • Access to a data solutions consulting package

The first three bullets all seem like they were derived directly from user input and reflect D2L’s more recent approach to product development. The data consulting package, on the other hand, comes across first as a way to drive additional revenue, and second as a way to help customers understand and utilize their data.

In mid-October, Phil stopped by D2L headquarters in Kirchner, Ontario where he met with various members of the D2L team. He missed the local Octoberfest celebration by a day or two, but otherwise had a good visit. Here are a few of his observations:

  • We expect to cover this in more detail in a separate e-Literate post, but D2L and Blackboard seem to be taking very different approaches to migrating legacy architectures into a cloud environment. In D2L’s case there are only a small number of clients left who are not already in the cloud using D2L’s AWS model or have not signed contracts to migrate to the cloud. This means that as early as Q3 of 2019 D2L should be a fully cloud-based LMS without residual  self-hosting or managed-hosting instances to manage. Blackboard, on the other hand, has a very intentional strategy of continuing to support self-hosting and managed hosting implementations for the foreseeable future, and they have a lot of them.
  • We were not aware before the visit of the extent to which D2L is getting into course-level design services for their clients. Their Learning and Creative Services group has done work that includes designing custom home pages for institutions or programs; designing custom HTML templates for school branding as well as disability-support compliance; development of custom learning activities including gaming; and instructional design services based on outcomes. We were aware of Blackboard doing this level of services that partially overlaps with the Online Program Management (OPM) space; now D2L has these services as well and appears to be growing their service-based offerings.

Moodle: Moodlemoot Denver

The Moodlemoot held in Denver last week is one of four global Moodlemoot’s hosted by Moodle HQ. There are five other global moots that are locally hosted, in addition to many more informal gatherings held by Moodle users around the world. The Denver moot this year had somewhere between 300 and 400 attendees spread across four main sectors: higher ed, K-12, corporate and government. The relative small size of the gathering, compared to the other major LMS conferences, creates more of a working conference vibe, and attendees were eager to roll up their sleeves get into the weeds of LMS implementations and customizations. The conference was also an opportunity for Martin Dougiamas, the founder of Moodle, to share his view of the current state of Moodle and what lies ahead.

Dougiamas made several significant announcements during the conference, including an acknowledgement of a changing landscape in the global LMS market and a resultant need for Moodle to do some things differently. 

On the internal organizational front, there have been several developments.

  • To start, there is now an active corporate board that is overseeing Moodle strategy and operations. Many will recall that in Fall 2017 Moodle took a $6 million investment from a French investment firm, Education For The Many, that makes them a minority owner but one with a seat at the board table and influence over important strategic decisions taken by Moodle leadership.
  • Moodle has appointed a chief product officer for the first time. Her name is Gry Stene, she comes from outside of education but reportedly has extensive experience working with stakeholders to solicit input and drive consensus around product roadmaps. In her new role, one of her main tasks will be to bring organization, efficiency and transparency to the product roadmap.
  • Moodle is hiring more marketing personnel and people with business backgrounds. One result is that Moodle HQ had a booth at EDUCAUSE for the first time and appears to be proactively trying market the LMS and make sure people understand the current capabillities.

For most companies, these announcements would not be particularly noteworthy – board of directors, chief product officer, and people with business skills who can help grow a business. For Moodle, they are. For the last 15 years, Dougiamas has been the de-facto chief product officer, along with being founder, CEO, chief marketing officer and occasional coder. Now he’s bringing in new people with different skill sets in an apparent acknowledgement that the “benevolent dictator” situation that existed for so many years is not the right framework going forward.

On the business model front, another potentially significant development is the creation of what Moodle is calling Premium Integrators (Intelliboard, Blindside Networks and, most recently, Bongo – formerly YouSeeYou, are the initial ones) and that number is likely to grow but not beyond 10 or 12.  Essentially, the model is an extension of the Moodle Partner model, in the sense that the Premium Integrators give a percentage of top line revenue from Moodle integrations directly to Moodle HQ. The difference is, rather than providing hosting and other services, these companies integrate their applications with Moodle to extend the capabilities of the Moodle platform for interested customers.

A final observation: at one point during the opening day of the conference, Dougiamas very publicly acknowledged and accepted criticism of Moodle’s interface and said something to the effect of, “Well, yeah, what would you expect, it was created in the early 2000’s.” It was a throwaway line, but the comment drew considerable laughter (including from your e-Literate correspondent) and cuts to the chase. The question on the table now is whether the changes underway at Moodle can drive product improvements, keep existing users happy, attract new customers and drive additional revenue. We’ll be following developments closely in the coming months.

Canvas: Alexa and Tidbits from the Q3 Earnings Call

Last year Instructure announced that they’d written a skill for Alexa to enable Canvas users to ask Alexa some basic questions about their courses in Canvas. Jared Stein, VP of Higher Ed Strategy, even got on stage at Instructurecon to do a live demo (it worked, but was admittedly early days). Now, Instructure has announced that they will open source the codebase for writing additional skills within the Amazon Alexa environment. The goal is to accelerate development of innovative ways to leverage the use of voice commands with the Canvas platform. As Melissa Loble, SVP Customer Success and Partnerships, says in the press release, “by open sourcing the code, we’re enabling our institutions to expand the cooperation of Canvas and Alexa in nearly any way they can imagine.”

We believe this announcement is important in ways beyond Alexa skills, as it gives insight into how Instructure tries to balance innovation vs. support for the mainstream. There are few schools working with the Alexa skills, early adopters if you will, but Instructure sees this as important work even though there is not enough demand to assign further resources and add to the mainline Canvas code. Rather than see parallel development efforts move forward, Instructure released their code open source, hoping that schools will further develop this functionality. This challenge of serving both early adopters and mainstream customers is not unique to Instructure, but this approach is. This is a further example of why we believe that the LMS market is not a commodity market – there may be overlapping features, but the architecture and business model approaches vary significantly.

Instructure wrapped up their third quarter in September and held their earnings call in late October. For those of you who don’t listen to quarterly corporate calls, there can be a lot of accountant speak around financial metrics, but there is also a lot to be learned about what’s going on at a company, where they’re seeing success (and challenges) and what the strategy is going forward.

The big announcement on the call was that Dan Goldsmith is now the CEO. We covered his appointment as president on e-Literate back in May following our interview with Josh Coates  about changes to the executive team and again in August in Michael’s post, Instructure Enters those Awkward Teenage Years. The appointment of Dan to CEO beat our prediction by a few months but clearly, the writing was on the wall. Dan didn’t say a ton on the call but he did reveal some insights about his view of the education market. While the business is generally strong, t’s clear he believes that Instucture is leaving business on the table. He’ll be looking to expand the total addressable market by developing new products and rethinking the positioning of existing products (think Gauge). He also had some comments about the quicker sales cycles and more replicable sales strategies in the corporate Bridge market, particularly internationally, that made it seem like Bridge will continue to be a core component of their growth strategy. Bridge is also a corporate B2B play that aligns with Goldsmith’s background and experience at Veeva, his previous employer.

Other important announcements include an acknowledgement of a general slowdown in the LMS market this year (something we highlighted recently) and some notable international wins in Europe, Latin America and Southeast Asia. The pick-ups in Latin America snap a recent dry spell in the region for new implementations across all LMS vendors.

Finally, one comment on the financials. Instructure is looking to be cash neutral in 2018. In other words, cash on hand at the end of 2018 is roughly equal to cash on hand at the beginning of 2018 plus the cash raised in a secondary offering from spring. While Instructure is not yet profitable, they appear to be in a stable financial position.

Blackboard: Ultra and SaaS Updates

Blackboard’s most recent press release from November 1 promotes the ongoing release of new functionality in the Learn Ultra platform. It also provides updated numbers on Institutions that have turned on the Ultra Experience, as well as numbers on institutions that have migrated to SaaS hosting.

First the updates to Learn Ultra:

  • Feature parity: Ally integration and SCORM support
  • Unique to Ultra: Discussion Analysis and enhancements to the Gradebook, Institution Page and Mobile.

Additional details on the specific release items can be found in the press release referenced above. While it’s good to see Blackboard pushing out innovations in Ultra, it does raise questions about what sorts of resources are going into supporting innovation in Original, the platform used by the vast majority of Blackboard customers.

On to the numbers. Blackboard is now saying that “nearly 100 institutions have turned on the Ultra Experience.” As of BbWorld in July the number of institutions with Ultra turned on was 61, so we’re seeing a dozen or so new ultra institutions every month. One caveat to keep in mind is that “turning on the Ultra experience” can mean different things for different institutions. See our earlier post on “Terminology is key to understanding Blackboard Learn prospects.”

And finally, what’s going on with SaaS? At BbWorld in July, Blackboard announced that they had 383 SaaS customers. That number has grown to 433 SaaS customers in production today. Based on the new (and old) numbers around Ultra and SaaS, it would appear that SaaS is perhaps the bigger story than Learn Ultra – we’ll cover this situation in more detail in an upcoming post at e-Literate.

Google Classroom: You got next?

Google Classroom is big in K12, but there is an open question as to how much they plan to fully jump into higher education as opposed to dabbling in the market with a ‘let’s see how this tech gets used’ approach of the past. At EDUCAUSE we go conflicting answers to this question. Phil asked a sales lead in the Google booth about Google Classroom and whether they plan to push this into the higher ed LMS market. His answer made clear that Classroom belongs in the K-12 market, but in higher ed they have no need to try and displace Canvas, Blackboard, D2L, Moodle, et al. For higher ed, they plan to use Course Kit, their set of tools to integrate G Suite with the campus LMS, to incrementally get more exposure. When I talked to one well-known university CIO, however, he said that Google is responding positively to his push to fully jump in and even expand Classroom usage as an LMS alternative. Don’t treat this as a full description of the issues but rather one example of mixed messages.

Thanks for subscribing, and we’ll share more updates soon. Remember that we are shifting our next report to be in early January, thus allowing a complete year data analysis.

Phil & Michael & O’Neal