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