Along with others, I have written several times over the past 12 months here, here, here and here about the significant changes occurring in the educational LMS market. In my opinion, when we look back on market changes, 2011 will stand out as the year when the LMS market passed the point of no return and changed forever. What we are now seeing are some real signs of what the future market will look like, and the actual definition of the market is changing. We are going from an enterprise LMS market to a learning platform market.
What I mean by 'enterprise LMS' is the legacy model of the LMS as a smaller, academically-facing version of the ERP. This model was based on monolithic, full-featured software systems that could be hosted on-site or by a managed hosting provider. A 'learning platform', by contrast, does not contain all the features in itself and is based on cloud computing - multi-tenant, software as a service (SaaS).
The 2011 EDUCAUSE event captured the zeitgeist of the changes, as it seemed most of the buzz at the conference centered on new LMS solutions and paradigm changes. Instructure made their debut at the conference, Pearson's OpenClass was announced, Blackboard announced a new move in open content focused on CourseSites, and Cengage demonstrated their MindTap platform. Rather than slowing since EDUCAUSE, we have seen several additional announcements in the past three months.
- CourseKit was released as a free learning platform targeted at faculty adoption.
- Apple's iTunesU app was announced alongside the iBooks / Author textbook offering, extending iTunesU as an iPad-based learning platform.
- Facebook made a move within its higher education roots, starting a pilot program with Groups for Universities.
In my post from last summer, I characterized the changes we were starting to see, but with all of the recent changes, I think it would be useful to extend the first two trends mentioned.
The question is, what will the LMS market that is emerging from these changes look like? No one can know for sure what will happen over the next 3 – 5 years, but I do think there are some key trends that are worth understanding.
- The market is more competitive, with more options, than it has been for years. Instructure is a real player that has shown that it can win against established LMS vendors with big wins in Utah and at Auburn. LoudCloud has new clients at CEC, Grand Canyon U and an unreported win at a public state university. BrainHoney won at BYU. Pearson LearningStudio has major wins at Arizona State and Columbia online programs. Desire2Learn has roughly doubled in size in the past year. Moodle and Sakai, including through providers such as MoodleRooms and rSmart and Unicon, continue their impressive wins in the market.
- Related to the above, there is a trend towards software as a service (SaaS) models for new LMS solutions. The SaaS model offers some compelling advantages in terms of deployment time and ability to mine and report transactional data that might not be possible with other approaches. SaaS is not a panacea, but this is a growing trend in the LMS market.
The trend towards SaaS could perhaps more accurately be described as the default model now for new offerings. In the LMS market from just short two years ago, the default model was enterprise LMS. The only exception was Pearson's LearningStudio (the artist formerly known as eCollege.com). Today, every single new offering mentioned above is SaaS-based. Apple's iTunesU app is a mobile app, but the content is served from a behind-the-scenes SaaS platform.
Perhaps more significantly - there has not been a new enterprise LMS created since around 2004. Yes, each legacy LMS provider has major new releases available, but the one exception you could argue is that Sakai 3 is a new LMS and not just an upgrade from Sakai 2. Other than this exception, every new LMS solution to enter the market in the past two years has been based on a learning platform. I doubt we will see any more enterprise LMS solutions created given the cost-benefits of creating SaaS offerings.
Another trend that is becoming apparent is that many of the new offerings are not attempting to fully replace the legacy LMS, at least all at once. Rather than competing with all of the possible features that are typical in enterprise LMS solutions, the new platforms appear to target specific institutional problems and offer only the features needed. Perhaps inspired by Apple's success in offering elegant solutions at the expense of offering all the features, or perhaps inspired by Clayton Christensen's disruptive innovation model, the new learning platform providers are perfectly willing to say 'no - we just don't offer this feature or that feature'.
My colleague Jim Ritchey has written about the changes that SaaS models are starting to have in the higher education ERP market, put in context of the Datatel+SGHE merger. His key point:
Therefore the challenge for the vendors is how to get the ERP, with its slow development and implementation cycles, to provide the solutions to the new needs of the institution.
In the LMS market, the new answer to this question - how to adapt and respond to new institutional needs - appears to be based on learning platforms.