e-Literate

Present is Prologue

Tag: Blackboard system

  • Blackboard: Ask and Ye Shall Receive (Better Answers)

    About a week ago, I complained about Blackboard’s lack of clarity in messaging about their platform in general and the implications for managed hosting customers in particular. I wrote, in part,

    What is “Premium SaaS”? Is it managed hosting? Is it private cloud? What does it mean for current managed hosting customers? What we have found is that there doesn’t seem to be complete shared understanding even among the Blackboard management team about what the answers to these questions are.

    The problem with this oversight is deeper than just leaving managed hosting customers in the dark. Blackboard is asking customers (and prospects) to have patience as the company performs a major retooling on their platforms. In order to get that patience, they need for customers to understand (and believe) that this really is a major retooling, what is being retooled (at a high level), and what they will get that’s different from other platforms at the end of the process. This is a hard communication challenge, but it is also Blackboard’s live-or-die challenge. They really need to convince customers and prospects that the platform has a bright future, and to do that, they have to communicate nuances and technical issues that are not easy to communicate to executives. This is not something that can be fixed with a couple of DevCon sessions.

    That’s why I was happy to see Blackboard respond this week with more clarity.

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  • Blackboard Ultra and Other Product and Company Updates

    Phil and I spent much of this past week at BbWorld trying to understand what is going on there. The fact that their next-generation Ultra user experience is a year behind is deservedly getting a lot of attention, so one of our goals going into the conference was to understand why this happened, where the development is now, and how confident we could be in the company’s development promises going forward. Blackboard, to their credit, gave us tons of access to their top executives and technical folks. Despite the impression that a casual observer might have, there is actually a ton going on at the company. I’m going to try to break down much of the major news at a high level in this post. (more…)

  • Instructure Is Truly Anomalous

    Phil started his last post with the following:

    I’m not sure which is more surprising – Instructure’s continued growth with no major hiccups or their competitors’ inability after a half-decade to understand and accept what is at its core a very simple strategy.

    Personally, I vote for Door #1. As surprising as the competition’s seeming sense of denial is, Instructure’s performance is truly shocking. After five years, I continue to be surprised by it. It’s not just how well they are executing. It’s that they seem to defy the laws of physics in the LMS market. We had no reason to believe that any LMS company could rack up the numbers they are showing—in several different areas—no matter how well they execute.

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  • SunGard HE and Blackboard Acquisitions: Compare and Contrast

    UPDATE:  In the section on ‘Cash Cow vs. Growth Potential’, my choice of words could have caused misunderstanding.  I did not mean to equate Operating Income with Cash Flow, and my choice of the word ‘cash’ in this section should really have been ‘income’, as my analysis was obviously based on Operating Income.  I have made this correction below.  My apologies for any misunderstanding.

    Consider the recent news this summer that private equity firms have agreed to acquire both SunGard Higher Education (SGHE) and Blackboard in separate deals:

    • Two market leaders in technology solutions for education,
    • both generating revenues of several hundred million dollars per year,
    • both business strategies at risk due to eroding market share in their core business since 2007,
    • both facing challenges to integrate product lines and offer a clear road map for customers,
    • and both sold to private equity firms for more than $1.6B.

    SunGard Higher Education (SGHE) and Blackboard – brothers in arms.

    At first glance, there are some strong similarities between the acquisition perspectives of both market leaders, but if you look deeper, the differences provide a good insight into the future of technology markets for higher education.  These differences can explain why the ERP market seems to be consolidating with fewer choices while the LMS and educational technology market seems to be expanding with more choices.

    Cash Cow Income Machine vs. Growth Potential

    During research for this post, I was surprised to find out how much cash income that SGHE generates and how close Blackboard has come to SGHE’s revenue numbers.  While Blackboard has seen its revenue increase due to corporate acquisitions of its own, it has only had a combined operating income of $26M over the past 3 years.  In that same time, SGHE has seen its revenue decrease by almost 10%, but it has had a combined operating income of $399M.

    It is somewhat difficult to compare the financials of the two companies, as they employ different accounting methods, so use the following table to see the big picture rather than the details.  I have attempted to show total revenue (numbers are fairly solid) and operating income (not as solid), while ignoring provisions for income taxes.  This data is based on SunGard’s annual report for 2010 (p. 36 as printed) and Blackboard’s annual report for 2010 (p. 26 as printed).

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