e-Literate

Present is Prologue

Category: Business & Economics

The “Business & Economics” category covers the business aspects of ed tech, including the financial health and business models of individual companies, economic aspects of selling in education that shape the available offerings, and coverage of markets and investment.

  • LearningStudio and OpenClass End-Of-Life: Pearson is getting out of LMS market

    Pearson has notified customers that LearningStudio will be shut down as a standalone LMS over the next 2-3 years. Created from the Pearson acquisition of both eCollege and Fronter, LearningStudio has been targeted primarily at fully-online programs and associated hybrid programs – not for simple augmentation of face-to-face classes. The customer base has mostly included for-profit institutions as well as not-for-profit programs that are often packaged with an online service prover model (e.g. Embanet customers). As of this year, LearningStudio has approximately 110 customers with 1.2 million unique student enrollments.

    This decision is not one isolated to LearningStudio, as the end-of-life notification caps a series of moves by Pearson to get out of the LMS market in general. (more…)

  • Launch Of Moodle Users Association: 44 members sign up, mostly as individuals

    The Moodle Users Association (MUA), a crowd-funding group for additional Moodle core development, announced today that it is open for members to join. Technically the site was internally announced on its web site last Friday, but the press release came out today. As of this writing (Thurs evening PST), 44 members have signed up: 37 at the individual level, 1 at the bronze level, 3 at the silver level, 2 not sharing details, and Moodle Pty as the trademark holder. This equates to $8,680 – $22,580 of annual dues, depending on what level the two anonymous members chose.

    Update (1/25): As of Monday morning, the numbers are 51 members: 44 at the individual level, 1 bronze, 3 silver, 2 not sharing details, and Moodle Pty as trademark holder; leading to $8,960 – $22,860 of annual dues.

    Moodle News was the first outlet to describe the new organization (originally called Moodle Association but changed to Moodle Users Association when the organization was formalized), and in early December they summarized the motivation:

    As mentioned recently in an article on e-Literate, it’s possible that a majority of all funding to Moodle.org originates from Blackboard. While this may be ironic, knowing the history of Blackboard, it is appropriate since the LMS company has quietly become the largest Moodle Partner by number of clients through acquisitions and growth over the last few years. (more…)

  • Inside Higher Ed: One year after selling majority stake in company

    One year ago I wrote a post critical of Inside Higher Ed for not doing a blanket disclosure about the sale of a majority stake to a private equity firm with other education holdings (most notably Ruffalo Noel Levitz).

    Subsequent to the disclosure from the Huffington Post, IHE put up an ownership statement disclosing the ownership change and calling out that only editors are involved in editorial policies. The About Us page prominently links to this ownership statement.

    In an interview with Education Dive, Scott Jaschik (an Inside Higher Ed founder and editor) noted his regret for not disclosing the sale up front while concluding:

    “I guess I would just say to anyone who has questions, read us and read our coverage and call me if you think we’re doing anything that we shouldn’t,” [Jaschik] said.

    In the past year I have done exactly that – watching carefully for editorial shifts, complaining publicly about one article, and privately emailing Jaschik on another issue.

    My conclusion? Inside Higher Ed has shown no bias and no change in editorial policies based on the new ownership – they are living up to their word. IHE [Jaschik in particular] has also been quite good in discussing any questions or issues based on their coverage. IHE should be commended for their quality coverage of higher education news.

     

  • Patents Rethought: Khan Academy Did the Right Thing

    To recap what’s happened so far:

    Since then, I had a little more time to look at the actual legal language of the agreement and reflect on the larger edupatent problem. And I’ve come to the conclusion that Khan Academy did the right thing by adopting the agreement. We should feel good about what they’ve done. And given the realities that software patents exist and defensive patents are therefore a necessary evil, we should encourage other educational patent holders to do as Khan has done and adopt the same agreement.

    (more…)

  • Ed Tech Patent Update: The Innovator’s Agreement

    Carl Straumsheim has a good piece out on the Khan Academy patent Inside Higher Ed today. Much of it is a primer on the uses and limitations of defensive patents, but there is a piece on the specific nature of the patent pledge that Khan Academy has signed that I missed. The pledge, originally created by Twitter, is quite similar to my own proposal in a number of ways. It turns the decision-making regarding offensive use of the patent over to another party and, importantly, the agreement travels with the patent, even if it changes hands:

    The IPA is a new way to do patent assignment that keeps control in the hands of engineers and designers. It is a commitment from Twitter to our employees that patents can only be used for defensive purposes. We will not use the patents from employees’ inventions in offensive litigation without their permission. What’s more, this control flows with the patents, so if we sold them to others, they could only use them as the inventor intended.

    Shame on me for not doing my homework.

    The big difference between this pledge and the one I propose is that I am suggesting that the third party be a trust rather than the inventing engineer. This has several virtues. First, engineers die, and not all of them are going to be equally vigilant in protecting education. Can the engineer sell this right to somebody else? Can the right be inherited? If it isn’t inherited, is the patent then unencumbered? Giving the rights to a trust lays this concern to rest. It also creates a proactive deterrent because the trust could sue anybody that is asserting an ed tech patent.

    What I take from the details of Twitter’s pledge is that my proposal is probably legally viable. The original pledge just needs to be adapted to serve the specific needs of education.

  • The Massive Decline In Larger Education Company Market Caps

    After our coverage of Blackboard’s CEO change last week, we were both interviewed by the Washington Business Journal, with the following lede:

    Analysts and sources I spoke with Monday, both on and off the record, said the decision to bring on Bill Ballhaus as CEO was a combination of Bhatt failing to make progress building the company’s business and lacking the experience needed to successfully run a company of that scale. And that means at least several years before Providence Equity Partners, which owns a majority of the company after paying $1.64 billion for it in July 2011, begins actively marketing the company for sale, according to industry experts.

    Earlier this week I wrote about Apollo Education Group, parent of the University of Phoenix, putting itself up for sale due to its weakening financial position. I also noted that I doubt that McGraw-Hill Education is going to be able to go public in the near-term. Part of the reason for this latter observation is the dramatic fall of Pearson in the stock market, triggered by its warnings that it would miss earnings estimates. In Audrey’s excellent year-end post on the business of ed tech, she noted:

    Private equity firms sure love buying ed-tech companies. Perhaps because the stock market’s sorta “meh” about them.

    (more…)

  • Solving the Ed Tech Patent Problem

    You may have heard that Khan Academy has filed for several patents. Audrey Watters has written a really strong piece providing the details of the filings in the context of the history of ed tech patents and showing why some academics feel that the patent system clashes with the values upon which academia was built. In the process, she excavates some of my personal history in the Blackboard patent war. While I am sympathetic to arguments against ed tech or software patents on principle, my own personal reasons for getting involved with that fight were more utilitarian. I believed then, as I do now, that patents threaten to kill innovation in educational technology due to the specific characteristics of the market. The outcome of Blackboard v. Desire2Learn did not end that threat, although it did temporarily reduce it. The conversation being provoked by Khan Academy’s filings offers a new opportunity to come up with a more permanent solution. (more…)