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.
Last week OpenStax, the Rice University-based publisher of open educational resource (OER) materials, announced that according to their data more than 2.2 million students at 48% of colleges in the US and 1,150 outside the US are using OpenStax free textbooks, saving an estimated $177 million.
This is compelling data in its own right, and we are working on analysis around this organization and its model, but somewhat buried in the press release is another significant statement around what students currently spend on textbooks and what savings are possible with OER.
“Our community is creating a movement that will make a big impact on college affordability. The success of open textbooks like OpenStax have ignited competition in the textbook market, and textbook prices are actually falling for the first time in 50 years.”
As a result of the unprecedented downward shift in textbook prices, OpenStax will be decreasing its estimated student savings figure from $98.57 to $79.37 based on federal data. The U.S. Department of Education’s National Center for Education Statistics published a study in May stating the average undergraduate student spent $555.60 on required course materials for the academic year. Dividing that number by seven courses (the undergraduate average, according to enrollment data) comes out to $79.37 in savings for each student using an OpenStax book.
I have long argued that OER groups and others arguing for making college more affordable should use baseline numbers based on what students actually pay for textbooks, rather than the all-too-common $1,220 – $1,420 per year numbers from a misuse of College Board budget numbers (see chart at top of page 10 in this document). With OpenStax moving to new federal data showing $556 average expenditures, we should start to see more reliable estimates of student savings. Kudos to them.
However, this level of student spending should not be a surprise to anyone following the curricular materials market.
Our 2015 post “How Much Do College Students Actually Pay For Textbooks?”, as well as a follow-up post, show in detail that we have had data for years showing that students roughly $600 per year on textbooks and related course materials, and that that number has been falling since at least 2008. Using data from the National Association of College Stores (NACS), we knew three years ago about the rough level of spending and the multi-year decline. NACS has continued to release annual updates, with the most recent public release from last summer:
What OpenStax refers to, however, is the new National Postsecondary Student Aid Study (NPSAS) restricted-use data from the US Department of Education’s National Center on Education Statistics, showing $555.60 average student expenditures per year. Which is right in line with the NACS data.
We plan to explore the NPSAS data in more detail, as it provides rich data for crosstabs and exploration of student expenses. But for now, kudos to OpenStax for this change in student savings estimates, even if it is years overdue. I would hope that other OER advocates would follow their lead.
There are three observations from Blackboard’s users conference that we feel are important to share before we pull together our thoughts for more comprehensive posts, and all three issues build off of Blackboard’s strong focus at the conference on Learn Ultra as the future of their LMS product line.
Learn Ultra “In Production” or “Using Ultra”
The first issue is terminology around Learn Ultra. Blackboard ((Disclosure: Blackboard is a client of the e-Literate LMS Market Analysis service and a participating sponsor in our Empirical Educator Project.)) is pushing the metric that there are 61 or 62 Learn Ultra customers “in production” or “using Ultra”, yet we have found very few that use, or even plan to use, Learn Ultra as their primary, institution-wide LMS. What gives? What became quite clear at the conference is that when Blackboard says in production, what they mean is that the LMS administrator has enabled the Ultra global navigation, which uses the new Ultra user experience framework as the landing page / dashboard with activity feed that users see before entering a specific course. The company calls this Base Navigation, but at this point every course can be configured to be in the Original Experience or the Ultra Experience. Thus, enabling the possibility of running a course in Ultra counts as in production.
Once a school has enabled Learn Ultra Base Navigation, they could choose to move exclusively to Ultra (e.g. the University of Phoenix, Northwest Florida State College, and a few others), or they could choose to keep all courses in Original (e.g. Northeastern State University), or they could choose to have some courses in Ultra and some in Original (used by the majority of schools investigating Ultra). This last mode is known as Dual Course mode, and even Blackboard executives are surprised to find out that the vast majority of schools putting Ultra in production are in fact running in Dual Course. For many of these schools, there are no definitive plans to ever move exclusively to Ultra.
This distinction is important, as the majority of functionality for an LMS occurs within a course, even if we did hear a few schools present that they saw some end-user benefits to having the landing page itself. We will add more commentary on this subject in future posts, but for now the takeaway is that Ultra in production numbers from Blackboard do not necessarily mean that any or most courses are in the Ultra Experience.
Product Variations Resulting in Three Dates for New Features
The second issue is that Blackboard Learn has two experiences (Ultra and Original), three deployments (self-hosting, managed-hosting by Blackboard, and SaaS-hosting at using AWS), often resulting in three different dates for full delivery of new features.
Keeping in mind that the Original Experience is available on all three deployment models but Ultra is available only in SaaS, here is the view of the final delivery groupings for the courses:
Learn Original on self-hosting and Learn Original on managed-hosting, which the bulk of their customers use, is the first case.
Learn Original on SaaS-hosting, which represents the bulk of their 383 customers on Learn SaaS announced at the conference, is the second case.
Learn Ultra, which represents some subset of the 62 customers announced as “Ultra in production”, is the third case.
Of course there is significant overlap in terms of common code, such as the micro-services running in the SaaS environment for both experiences, or shared source code between deployment options. But from a feature delivery perspective, the full release often has three different delivery dates – Original SH & MH, Original SaaS, and Ultra.
This is good news or bad news, depending on your perspective. For Blackboard’s customers, it means more options without forced migrations. Blackboard staff stated several times in presentations and in hallway conversations that none of the deployment options or experiences have any plans to go end-of-life or even into maintenance mode. But on the other hand, Blackboard will not achieve many of the benefits of becoming a cloud product company until they can move the majority of development purely onto SaaS.
SaaS Better Indicator Than Ultra of Client Retention
The third issue, which is related to the first two, is that we believe ((OK, OK. I admit that Michael should get credit for seeing this issue more clearly than I did. Not many people read footnotes, so I feel comfortable with this admission.)) that the migration to Learn SaaS might be a better indicator – at least in the short run – than Ultra adoption of whether a school plans to stick with Blackboard. Whether or not the school enables Ultra base navigation or any courses in the Ultra Experience.
When a school moves to Learn SaaS, they tend to sign contract extensions for 1 – 3 years to cover the new services. And the migration to Learn SaaS does not suffer from the vague terminology issues – a school either uses Learn deployed on SaaS (through AWS) or they don’t.
For now, just treat this as clarification on the complexities of Blackboard Learn LMS options that became more apparent at the conference.
Update 7/23: Changed header and some text in second section to focus on dates of feature delivery.
Inside Higher Ed published an article today, titled “Free MOOCs Face The Music”, about edX quietly adding support fees for many of their courses. Dhawal Shah and I both commented that we were not surprised by the move.
Writing about the introduction of the fee, Dhawal Shah, founder and CEO of Class Central, a review site for online courses, said the announcement was the latest in a phenomenon he termed “the shrinking of free.” Regardless of MOOC provider — be it edX, Coursera, Udacity or FutureLearn — “all have cut back on what was originally free in MOOCs.”
Phil Hill, co-founder of Mindwires Consulting and an author of the e-Literate blog, agreed that the edX announcement was not surprising. Early MOOC providers like edX thought they would be able to “get really big for free,” said Hill. “Magic didn’t happen, and now they’re facing reality.”
The current generation of courses has proven the feasibility of massive online enrollments, but the Kolowich article reveals that the result is based on a form of adult continuing education. The majority of students in the Udacity and Coursera courses analyzed were professionals in the software industry – hardly the target audience for those seeking a change in how we educate postsecondary students. The current MOOCs provide a nice proof-of-concept, but hardly solve significant educational problems.
So what are the barriers that must be overcome for the MOOC concept (in future generations) to become self-sustaining? To me the most obvious barriers are:
Developing revenue models to make the concept self-sustaining;
Delivering valuable signifiers of completion such as credentials, badges or acceptance into accredited programs;
Providing an experience and perceived value that enables higher course completion rates (most today have less than 10% of registered students actually completing the course); and
Authenticating students in a manner to satisfy accrediting institutions or hiring companies that the student identify is actually known.
Given this short timeline and the nature of investment-backed educational experiments, I think the real focus should be on whether and how MOOCs or successor models build on current scalability and openness while overcoming these four barriers.
What have we seen since 2012?
Revenue Models: Coursera, FutureLearn, and edX moving towards an OPM business model, and Udacity focusing on corporate education;
Credentialing: All MOOCs offering some sort of verified certificates, and in the OPM cases offering actual degrees through their partner institutions;
Course Completion: MOOCs realizing that the two issues above lead to higher completion rates; and
Authentication: Verified certificates and OPM models requiring student authentication through webcams and approaches similar to online proctoring companies, and even partnering with proctoring companies.
At this stage pretty much everyone recognizes a blatant ‘I told you so’ post written while Michael is on vacation and unable to talk me out of it, so I’ll move along and cut off further commentary.
Last week Walmart announced a new education benefit for its employers, subsidizing undergraduate college degrees at select online programs at the University of Florida (through UF Online), Brandman University, or Bellevue University.
The company said it estimates as many as 68,000 of its employees initially could sign up for the new college program. Walmart employs 1.5 million in the U.S. The company declined to comment on how much this initiative will cost it.
Employees will contribute $1 per day, for 365 days every year, toward their education, so long as they’re enrolled. Walmart will cover the rest of the tab. Workers will be able to choose from the three nonprofit schools and have the option of taking classes online with the flexibility to study during the evenings or on weekends.
Today UF Online announced another partner: Discover Financial Services, issuers of the Discover Card and Diners Club International, with its 14,000 employees.
Discover announced a significant new education assistance benefit that provides all eligible U.S.-based employees the opportunity to earn a bachelor’s degree online from an accredited public or non-profit private university at no cost.
Known as The Discover College Commitment, the benefit covers tuition and required fees, books and supplies needed to complete select online degrees at one of three schools – the University of Florida (via UF Online), Wilmington University and Brandman University. The benefit has no tenure requirement so employees can start participating as soon as they want regardless of how long they have been with the company, including new employees on their first day.
The two partnerships are part of what UF Online calls their Employer Pathways, and in the process seem to be defining an alternate method of marketing and enrollment management, in contrast with most Online Program Management (OPM) assumptions.
Employees from Walmart and Discover Financial Services have expanded opportunities to earn a bachelor’s degree from the University of Florida (UF) thanks to a new and significant investment in their education from their employers. This remarkable step by these and other large employers demonstrates the value of a UF degree and the accessibility of UF Online, UF’s online undergraduate experience. Employers will provide a robust support package covering tuition, fees, plus access to life coaching and college readiness programs.
Discover is offering this new benefit to select programs at UF Online, Wilmington University, and Brandman University.
Discover is covering 100% of cost for select bachelor’s degrees. Discover is proud to offer “The Discover College Commitment” program – an innovative full-ride college education benefit, providing US-based employees the opportunity to participate in one of several select high-quality, fully paid, online bachelor’s degrees.
Both packages of education benefits is managed by Guild Education, “a tuition reimbursement and education platform that helps large employers extend education benefits, including tuition reimbursement, to workers”.
I think these moves are more significant than just individual benefits. What we are seeing is UF Online, along with a handful of others, defining a different approach to marketing and finding potential online students, at least for undergraduate degrees. Historically, there is a common assumption that to enable a scalable online program there is a need for traditional digital marketing as the primary approach – Google AdWords, call centers, social media campaigns – with a partnership or two thrown in on the side. The origin of the OPM market is centered on providing these services in exchange for a percentage of tuition revenue, and for the majority of cases, the OPM’s spending on this marketing and enrollment management category is the most expensive service in the package. The Employer Pathways approach by UF Online has the potential to flip the student acquisition assumptions – primarily driven by employer partnerships with traditional digital marketing channels as a secondary approach.
Walmart and Discover already have potential students identified, and the companies have the incentive to internally market these education benefits to employees. UF Online needs to support that internal marketing and feed applicants into the same application process, but they have a reduced need for general-purpose marketing. UF Online started out with Pearson Online Learning Services (formerly known as Embanet) to be their OPM partner, but in late 2015 they pushed Pearson out and decided to take over this management internally.
I talked to Evangeline (Evie) Cummings, Associate Provost and Director of UF Online, at WCET’s Leadership Summit last week, and she described how UF Online is trying to reduce their marketing spend and instead invest more in faculty and course development. Part of that move is to spend less trying to get out-of-state students, which may pay higher tuition but still cost much more per student in acquisition costs. But the other move is to decrease the need to spend on traditional marketing channels.
We can think of Guild Education in this case as a derivative of the unbundling version of OPM, enabling the front-end services with an alternative approach and what appears to be a lower revenue share.
Rather than charge a transaction fee per student to the employer, Guild takes a cut of the tuition revenue from the universities it works with. This revenue-share model is an “elegant” solution for institutions that want to grow their enrollment online but don’t want to spend more on marketing, said Carlson. It’s also an attractive proposition for employers, who don’t have to pay any additional charges on top of the contribution they make to their employees’ tuition. The tuition fees are not discounted for the employers and will be charged at in-state or out-of-state rates depending on the location of the student. Neither Guild nor the three universities involved in the Walmart offer would disclose what percentage of tuition revenue Guild will take.
The bulk of the OPM market serves master’s programs, and UF Online is centered on bachelor’s degrees with a handful of master’s, so this approach might not work across the board. But I’ll bet that there will be plenty of undergraduate online initiatives that will be looking to UF Online and wondering if they should develop similar degree pathway partnerships as the centerpiece of their student acquisition plans. The online education space is maturing and becoming a lot more interesting.
One of the arguments that we have made as part of our LMS Market Analysis service is that if you look beyond market share numbers, there has been a tectonic shift in the academic LMS market that started around 2012, moving from being Blackboard-centric to Canvas-centric. Meaning that the current market trends are largely driven by Canvas adoptions and market reactions to Canvas adoptions. This change has elevated the need for viable LMS solutions to have both a cloud-based deployment strategy as well as a more modern, intuitive user experience than what was acceptable just five years ago.
Blackboard’s move to Learn SaaS (deployment) and Learn Ultra (new user experience) is a prime example of this market dynamic, and it has tended to get the lion’s share of analysis, including here at e-Literate. We have described that D2L has joined Canvas in “an emerging two-horse race for new implementations”, but we could do a better job of describing why we believe they are gaining in the market. ((Disclosure: D2L, Blackboard, and Instructure are subscribers in our LMS Market Analysis service and sponsoring participants in our Empirical Educator Project.))
Short story – D2L has made fairly substantial bets on cloud deployment and a streamlined user experience, and the product design changes present the best explanation for the market gains.
Head in the Cloud
The data looking at new LMS implementations (changing from one system to another) in higher ed across the four global regions we cover in our market analysis shows a remarkable movement away from self hosting, or on-premises hosting, towards a combination of managed hosting by the LMS vendor or cloud hosting designed by the vendor but running on AWS, in particular. From 15% external hosting to 77% in just one decade. Within the external models, there is another major shift away from managed hosting and towards cloud hosting.
D2L has long worked on managed hosting options, but in late 2013 the company introduced Continuous Delivery where software releases are pushed to customers incrementally, such that customers would jointly run the latest versions of Brightspace, their LMS. This move is important, as one primary benefit of cloud deployment is to remove the explosion of software configurations and versions that make it expensive and difficult to diagnose and fix bugs and to release new features.
While we heard grumblings from multiple clients during the transition – especially thru early 2017 – D2L clearly made some hard choices and and is aggressively moving to the cloud, not just as an option, but as their primary delivery model. According to David Koehn, VP of Product Management at D2L:
All new Brightspace implementations are on AWS cloud;
Virtually all current Brightspace implementations use Continuous Delivery; and
Approximately 50% of current customers are already on the AWS version of cloud deployment; and
By the end of 2018, a large majority of customers will be on cloud deployment.
Contrast this move to the cloud with Blackboard’s where they plan to continue offering self hosting, managed hosting, and their own AWS-based cloud hosting options at the customer’s choice, while they believe SaaS and Ultra will lead on new sales. The primary constraint being that to go to Learn Ultra experience, you must first be on Learn SaaS, the cloud hosting option. But the key point is that Blackboard has tended to view the cloud as one deployment option among others, and the numbers show it. According to a company blog post this week from CEO Bill Ballhaus:
As of today, more than 50 clients are running Ultra, with dozens more planning to start using the Ultra experience and courses in the second half of the year. Also, 361 clients around the globe have moved to SaaS deployment for Learn.
Our data show more than 2,000 higher ed customers on Learn, but if you add in K-12 and corporate customers, this roughly equates to just over 10% on or moving to Learn SaaS and 2% on Learn Ultra. These are generous numbers, but more on that in a separate post.
The point is that D2L is making a much more aggressive and focused bet on the cloud than is Blackboard, for better or worse. Canvas, of course, is designed natively for the cloud, and essentially 100% of their customers are on the AWS cloud.
Run to Daylight
David Koehn also pointed out that the real driver for the AWS cloud move by D2L is to enable a redesign of the user experience and to provide improved scalability and reliability. In other words, the cloud deployment is a means to the Daylight end.
Daylight is the name for D2L’s redesign of the user experience and its streamlined user interface. When it was first announced just over a year ago, I was somewhat skeptical as the initial changes were evident in different fonts and cleaner look-and-feel, but not significant improvements in the workflow for faculty and students.
As time goes on and I see more advanced demos, my view is changing. The Daylight Experience does have some real improvements not just in look-and-feel but in fewer and more intuitive clicks to get the same job done. A major focus on the release this summer (in time for D2L Fusion users conference) is more fully encouraging usage of the activity stream for higher ed clients (this feature was initially targeted at K-12 market but has been adapted for colleges and universities).
D2L has long played the Mutually Assured Destruction game of features, targeted at cumbersome procurement processes. D2L (along with Blackboard and Moodle) has a deep set of features which contrasts with Canvas and its streamlined set of features that rely on third-party integrations to solve some of the more specialized use cases. For D2L, it is important to maintain these features as a competitive differentiator with Canvas, and the design approach guiding them is Progressive Disclosure. This design technique relies on progressing from simple to complex, showing the user the information and options they need when they need it or request it and not before.
Consider adding a multiple choice quiz, where the desire is to make this process very simple, but to then have a page or area that exposes more and more options as requested by user or in context of the quiz setup.
As D2L further implements this design approach within the Daylight Experience, we are seeing a more modern and intuitive user experience for Brightspace customers, yet one that is showing real promise to also tap into deeper feature sets. And these changes are being used in production.
Again by way of contrast, Blackboard’s user experience redesign for Learn Ultra has had a bumpy ride, with multi-year delays of getting any customers to use in production. They took more of a big bang approach to releasing Learn Ultra, and when customers pushed back saying that Ultra wasn’t ready, this led to additional delays and eventually a change in the design team. D2L’s Daylight has proven to be a more iterative release of their new user experience.
What to Watch
This year it is becoming difficult to separate LMS products from company finances. Instructure is trying to balance Canvas and Bridge growth to satisfy public markets along with a new executive team. Blackboard is dealing with corporate debt challenges while needing to fully release Learn Ultra. As mentioned in this post, D2L is moving strongly to the cloud with a new user experience while managing expenses. Schoology is trying to grow higher ed market under the radar. Moodle HQ took investment for the first time. There are a lot of open questions on the future of the academic LMS market, and we expect much to be revealed at the big summer (and fall) events.
As for D2L Fusion, we plan to get a better read on how customers and prospects are reacting to the cloud deployment move and streamlined user experience. We are seeing real changes in the Brightspace design and deployment model, but do paying and prospective customers value these changes? Furthermore, will D2L be able to improve its customer service and delivery on promises made for new customers as well as it has improved its product design?
As for Blackboard, Learn Ultra now has D2L’s Brightspace as a major user experience to compete with as well as Canvas. There is a lot more changing in the LMS market than what is obvious on the surface.
Update: Clarified D2L numbers to be specifically for AWS cloud deployment. Also changed several instances of “cloud hosting” to be “cloud deployment” to make terminology more accurate.
Instructure is now a decade old as a company and faces a crucial test this year with recent changes to their executive management team and the need to scale both Canvas (academic LMS) and Bridge (corporate learning LMS). The long-time head of sales, Marc Maloy, and head of marketing, Misty Frost, left Instructure in the fall. The company eventually hired a new head of marketing, Bjorn Eriksson from the world of corporate HR, in January. After a months-long search, Instructure did not directly replace Marc with a new head of sales, but instead they hired a new president, Dan Goldsmith, who also has sales leaders reporting directly to him. With this move, Mitch Macfarlane, the long-time chief operating officer and former head of client services, will be leaving the company this summer. ((Disclosure: Instructure and D2L are subscribers to our LMS market analysis service and were sponsors at our recent Empirical Educator Project summit.))
We’ve written about previous executive changes for Instructure – when their twofounders left the company and when their CTO departed after just one year – but in each case the company managed the transitions and came out stronger in the end. As we have shared in our LMS Market Analysis service and on e-Literate, the Canvas track record is remarkable in terms of not losing customers and gaining new customers from most other LMS providers.
But the executive changes over the past year come at a time when Instructure faces new challenges in product development and implementation support. At InstructureCon 2016, the company announced their next-generation quizzing platform, Quizzes.Next, stating that it would be “made available to you over the course of the next several months”. Last summer at InstructureCon 2017, Quizzes.Next entered a limited beta program, but the new set of tools is still not fully in production. To our knowledge, this might be the biggest product schedule miss in the company’s history, and it will be quite interesting to see what happens with this summer’s InstructureCon.
In addition, we have had several people contact us privately, even before the most recent management change, telling us about a new level of frustration in implementation projects and product upgrades. None of the tales were extreme, but they were unusual for Canvas clients and in general spoke to distractions from staff and lack of clear answers and updates.
The press release announcing the hiring of Dan Goldsmith included this description:
With more than 20 years of experience in software and services, Goldsmith’s career is marked by directing high-performing global teams and achieving outstanding penetration and growth in challenging markets. Goldsmith spent the last eight years as a senior executive at Veeva Systems, a cloud-based software company, where he started and ran Veeva’s international business, led the company’s strategy in new markets and products, and most recently was responsible for Veeva’s global engagement and growth in strategic accounts.
“It is an exciting time for Instructure. We are well positioned for success as we focus on the continued growth of Canvas, expansion of Bridge, and international execution,” said Josh Coates, CEO of Instructure. “Dan’s energy, creativity and proven track record in driving go-to-market strategies and rapidly scaling businesses make him a tremendous addition to Instructure at the perfect time to lead us through our next phase of growth.”
Goldsmith was one of the first 50 employees at Veeva. He helped lead the company through a successful IPO and a growth path to a $10 billion market cap. Prior to Veeva, he worked in various executive positions at top companies, including Accenture, PwC and IBM. During his years in management consulting, Goldsmith led initiatives in global markets and developed new offerings. Goldsmith will have an immediate impact on Instructure’s strategy. His initial focus will be on market growth, with the sales leaders reporting directly to him.
This was the setup for an interview that we had with Josh Coates, the CEO of Instructure, last week. Given our focus at e-Literate on education markets, we in particular wanted to ask about how the company is balancing the needs of Canvas and Bridge.
Coates came prepared for the interview, and up front he made the point that the “vast majority of company resources” are allocated to the academic markets and that this is their foundational business. After we pointed out that the majority of discussions on quarterly earnings calls focus on Bridge, Coates noted that Wall Street is overly focused on corporate learning markets and unfortunately takes Canvas’ academic market performance for granted. He does not do so, but some of the investor community seems to.
The primary selling points bringing Goldsmith to Instructure are that he helped Veeva grow into a $10 billion company, having joined as one of first ~40 employees, and that he specifically helped them grow international markets. According to Coates, Goldsmith spent his first three years opening up the Europe, Middle East, and Africa (EMEA) markets, and that yes, his international experience is a big reason for Instructure recruiting him.
We have noted at e-Literate that Canvas really began international expansion just 3-4 years ago. According to our current data, Canvas leads in higher ed adoptions in Europe and Australia / New Zealand, but interestingly, D2L is beating Canvas in Latin America higher ed adoptions despite Instructure having a bigger investment in its regional office in São Paulo. At some point Canvas’ market share growth rate in North America will have to flatten out and international markets will naturally increase in importance for company finances. While market wins in Europe and Australia / New Zealand are impressive, Instructure will need more aggressive growth in other markets, and clearly Goldsmith is being tapped as a catalyst to increase sales overseas.
We pointed out that Goldsmith had no education background and appears to be more closely aligned to corporate learning markets than higher ed or K-12 markets. Coates responded that Goldsmith has done quite well for himself at Veeva but is also passionate about education, as evidenced by his experience as the chair of the Montgomery School board of trustees. Coates acknowledged that this is not deep academic sector experience and that the company will need to give Goldsmith a big education on higher ed and K-12 markets. If we had a dollar for every time we heard of a rich dude who is passionate about education, well, we’d be rich dudes who are passionate about education. It is good to hear, however, the acknowledgement that the new executive brings rich software company scaling and international market growth experience but not domain knowledge of the academic markets for Canvas.
We asked for an update on Quizzes.Next – when it will be generally available (GA) and whether the schedule challenges are related to the executive changes. Josh Coates assured me that no executives are working on the code, but Jared Stein, VP of higher ed product strategy, answered more directly.
Quizzes.Next’s GA release is scheduled for Summer 2018. This is later than planned because we underestimated the complexity of building assessments entirely as a micro-service at the level of quality we set for ourselves and our users.
The executive management team over the years has played a big role in establishing the company culture that is a large part of Instructure’s success. Now that the three M’s (Marc, Misty and Mitch) are out, the question is not whether the culture will change, but how. Coates’ acknowledges this reality and trusts that Instructure’s internal rudder is strong enough to keep the company on course.
There are two company risks that stand out in trying to balance Canvas and Bridge. First is that complacency sets in not just with some in the investment community but with Instructure itself, and they begin to take their strong position in the academic market for granted. Second, and related, is that resources and talent end up flowing disproportionately to the corporate learning market given its increasing importance. These are risks to watch and not observations of actions, however, and Coates was emphatic that the academic market will always be the foundation of Instructure’s business. The corporate learning market is significantly larger than the academic market, however, and Coates estimated that in ten years or so, corporate will likely drive a larger portion of Instructure’s revenue.
It should be noted that growth in corporate does not have to come at the expense of the academic market. It actually has the potential to strengthen product offerings in higher ed and K-12 as Instructure gains deeper insights into teaching and learning more broadly. There is also the potential for convergence, or at least cross-pollination, in these markets as the profile and needs of learners evolve.
We’ll keep a close eye on academic LMS market trends in the coming months for signs of new developments. For the near term, at least, Instructure’s success is predicated on the continued success of Canvas in higher education and K-12 despite the quarterly investor calls skewing toward the corporate learning markets and new management hires with experience outside of the education sector.
Several months ago I wrote a post looking at the Top Hat’s push into digital curricular materials through their Textbook product and Marketplace for digital course content. Leading up to that post, I had been planning to cover the Open Educational Resources (OER) angle, as the Marketplace included a number of openly-licensed material, much of it from OpenStax, and Top Hat had already begun marketing itself as an OER provider. At the time, the OER strategy seemed a work in progress. In fact, I found that some of my questions for company staff about OER basics – the role of Creative Commons licenses, community dynamics exhibited at the OpenEd conference, etc – led to a lack of answers, and at the time there was no export capability to get OER out of the platform.
To Fee or Not to Fee
The situation has changed since January, and with last month’s announcement of Top Hat’s Open Content Initiative the company is taking a stand on whether it is appropriate to charge for platform access. The idea of hosting and modifying OER on a fee-based platform became a big topic last year. Lumen Learning pioneered the Red Hat type model in 2014, and last year there was a big movement with Cengage, Knewton, OpenStax, Macmillan, and Top Hat all offering OER within their platforms. In many cases, the OER content itself has been redesigned from traditional textbook-in-PDF format to learning objective-driven content with aligned assessments. ((Disclosure: Lumen is a client of MindWires, and I recently gave a paid keynote at a Top Hat user’s conference.))
Top Hat has now removed the student platform fees and added an export-to-epub feature. As evidenced in a company blog post by CEO Mike Silagadze, they are not shy about it either.
At Top Hat, we’ve been working on making education more effective and affordable since 2009. Now, we’re happy to make a move that delivers on both fronts. Beginning April 12, with the launch of our Open Content Initiative, we’re offering completely free access to thousands of textbooks and other Open Educational Resources (OER)—freely accessible and openly licensed learning materials—on the Top Hat Marketplace.
It’s about time. Students have been forced to weigh the pros and cons of emptying their wallets and draining their financial aid to buy textbooks for far too long. [snip] Just as bad, digital publishing platforms and e-readers have been charging a toll to students—disguised as a platform fee—to access free, openly licensed OER.
Enough is enough.
I asked Silagadze about a point I noted when describing Cengage’s OpenNow product:
For each course [VP of Content Strategy] Constantini estimates that the modifications take $50k – $100k of internal work, including verifying of licenses for embedded elements. I would note a certain irony here in that OpenStax produces more-or-less traditional digital textbooks requiring publishers or OER services companies like Lumen to break apart and realign to competencies or outcomes.
Silagadze brushed off this description and stated that the modifications made by other providers were far smaller and easier to make than is being claimed. We now have a third variation in the OER market, with the provision of wrap-around platform and a clear argument that these platforms not only will be free on Top Hat, but that they should be free as a matter of principle.
Free content, not dependent on specific platform
Free and modified content, available on a paid platform, content available for export
Free and lightly modified content, available on a free platform, content available for export
While this is a marketing position by one of the competitors in a new field, this move by Top Hat is a further sign of the OER movement breaking into different branches. From our perspective, the fractures in the OER community have been widening for the past several years, but to a degree this is a sign of success. Openly-licensed content usage is becoming more and more common in education, and even traditional publishers mostly accept the value of OER.
Faculty Engagement
Perhaps more significantly, at least in terms of understanding Top Hat as a company, is that the OER initiative doubles down on their bet on faculty engagement. A well-known issue with OER (and even with non-open content) is that few faculty end up taking advantage when given the ability to modify the course materials in any significant manner. In theory many people talk about open pedagogy in terms of faculty modification and collaboration on content, but in practice this rarely happens. Top Hat’s view is that the barrier has been flat content and cumbersome platforms, as best described in an eLearning Inside interview.
“We think the promise of OER has fallen down,” said Nina Bilimoria Angelo, VP of product and customer marketing at Top Hat. The Toronto-based company has created a platform to house, customize, and share OER and other educational resources. It has been used by over 2.8 million students to date.
“The promise was there’s a community that continues to build on open materials,” Angelo said. “But when those materials are trapped behind static PDFs, and then people are making changes to it on their own without a mechanism to share it back, that’s where things fall flat. We really wanted to create a system where things can be improved in real time, not over a 3 or 4 year cycle like with traditional publishers.”
“Discoverability is a challenge with OER,” Angelo said. “Quality can be perceived as uneven which is probably why OER adoption has stalled at the 5-10% level for instructors. There’s a lot of skepticism amongst higher educators. We’re trying to make sure all the high quality material is available in the Marketplace. Once it’s adopted, it’s really customizable. But then those customizations – this is the magic – those customizations can be shared back with the author and the team so that they can improve upon what they’ve created.”
This is the best way to interpret Top Hat’s OER move, in my opinion, and you can see more details in my January post about the Marketplace to better understand the customization and sharing capabilities of the platform.
According to an internal Top Hat survey of users, 89% of adopters make changes to digital textbooks that they adopt, with 22% reporting “lots of customization”. If this internal data is representative, there may be some indicators that faculty can be more involved in modifying and sharing content. Top Hat is betting on faculty engaging with content, modifying it, sharing it, updating it. And they are betting that this model will drive faculty adoption decisions.
There are a lot of unknowns about faculty adoption and modification of OER content through the Top Hat Open Content Initiative, but it is clear that the company is positioning itself differently than other providers. The transformation of digital curricular materials continues.
