Blackboard’s Perceptis Acquisition Offers Clues into Company’s Strategy

Yesterday Blackboard announced that they acquired Perceptis, a provider of help desk and financial aid support services for colleges and universities. In and of itself, this is not a huge acquisition. Perceptis has 33 clients, offers services that Blackboard was already offering, and has no substantial new technology. But as we approach BbWorld next week, the move provides some early hints into the strategic direction that the company may highlight at the conference.

I had the opportunity to talk with Blackboard’s Vice President of Education Services Katie Blot about the move.

There are a couple of different ways to frame help desk services, so I was curious to hear how Blackboard would position it. Katie talked about being “very, very focused on end-to-end learner-centric support” and “supporting learner pathways” for “non-traditional and post-traditional students.” And in the acquisition announcement, Jay Bhatt is quoted as saying,

By combining the Blackboard and Perceptis teams, we will enhance a service model that the industry needs: one that fully supports students from the first moment they are interested in a school to the day they graduate. This is yet another way Blackboard is reimagining education.

While “reimagining education” may be laying it on a little thick in the context of acquiring a help desk service, the reframing of the company mission as supporting students from orientation to graduation is a significant change. I always got the feeling that former CEO Michael Chasen’s role model was Oracle’s Larry Ellison. If you need a piece of software to help you do something important, Ellison will get it and sell it to you. It doesn’t matter too much what kind of software it is, as long as you’re the kind of customer he wants to have. There’s nothing wrong with that per se, but it leads to particular types of business decisions. A friend who used to work at Georgetown University liked to joke that Blackboard probably had some useful insights about his bowel health because he had to swipe his Blackboard-vended key card every time he used the faculty bathroom. Barring an uncommonly expansive definition of what it means to “fully support students,” this is just not the kind of business that the company Jay Bhatt is describing would be likely to get into (although, for the record, Blackboard currently still owns this business).

Interestingly, this is a point that Katie brought up unprompted. She took great pains to emphasize how they are building a “new Blackboard” (which, by implication, is importantly not like the old Blackboard). In the old days, she said, the company made acquisition decisions based primarily on the financial case. “We bought a lot of companies that were not closely aligned with the core.” I would put it slightly differently. I would say that Blackboard did not have the same core that the company leadership is articulating today.

And what is that core? What is the company trying to become? We will likely know more after next week, but by doubling down on the support services and positioning it the way they are, the company is trying to move up the value chain, away from being perceived as a software vendor and toward being perceived as a student success-related services vendor. According to Katie, their services business as tripled in the three years since Chasen got Blackboard into the call center support business by acquiring Presidium. The Perceptis move can be seen as doubling down. This puts them in an increasingly crowded space, particularly in online education, with competitors that range from Pearson to 2U to Hobsons. When I asked Katie how the company intends to differentiate itself, she cited two factors. First, they provide an a la carte approach and are avoiding making moves that they believe would potentially either put them in direct competition with their customers or otherwise cannibalize the schools’ core competencies. They are staying out of certain services businesses—she didn’t specify, but I imagine that curriculum development is a good example of what she means—while in others she said they take a “teach to fish” approach, moving more toward the consulting than the outsourcing range of the spectrum. This is not terribly different from the marketing message that Instructure deployed against the MOOC providers when announcing the Canvas Network and may be effective against the textbook publishers and more full-service outsourcing companies.

The second differentiator was interesting too. While Katie emphasized the a la carte message and specifically mentioned that Perceptis was attractive to the company because it served non-Blackboard customers and reinforced the message that they want to provide services to schools using other LMSs, she also said that Blackboard’s knowledge of the learning technology stack and, more importantly, the learning data, gives them an edge helping support their customers in making data-driven decisions. There aren’t many service providers who can make that claim right now. To be honest, I’m not sure that Blackboard can either yet. As I have written previously, the heritage of Blackboard’s analytics product is not really with learning analytics and they are still in the early stages of moving into this space. That said, Phil and I are impressed with their decision to hire John Whitmer as Director for Platform Analytics and Educational Research. As Phil has observed, Instructure has gotten strong benefits from hiring academic Jared Stein. Likewise, Al Essa led some pretty major conceptual work on analytics at Desire2Learn before they lost him to McGraw Hill. John is a solid researcher in the field of learning analytics and just the sort of guy that Blackboard needs to help them figure out how to deliver on their claims that they understand how educational data can provide insights enabling better student support.

Obviously, I’m reading tea leaves here. Speaking of data, Phil and I will both be at BbWorld next week and should have more concrete moves by Blackboard to analyze.