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Blackboard Buys Angel

May 7, 2009

Blackboard on Wednesday announced that it was purchasing Angel Learning for about $95 million, shaking up the course management industry.

While Blackboard is clearly dominant in the market, it has seen a number of colleges and universities shift to open source systems such as Sakai or Moodle, or to other companies. Angel has been particularly successful with community colleges and teaching-oriented institutions, and is known for outstanding customer service. In theory, the acquisition could enable Blackboard to win over Angel clients and to improve its customer service while adding more teaching tools. And that's the way leaders of the two companies described the deal in interviews on Wednesday.

But that vision of the purchase was greeted with skepticism by some industry analysts and colleges that have left Blackboard for Angel. Further, the move comes at a time that some of the other Blackboard rivals may be better positioned than they have been in the past. Desire2Learn remains in a protracted patent fight with Blackboard, but hasn't given up, and has won praise from open source advocates for taking on Blackboard. eCollege, another competitor, has been well behind Blackboard and others, but is benefiting from its 2007 purchase by the publishing giant Pearson. And Epsilen has been pushing for market share, with backing from its primary shareholder, The New York Times.

One technology expert who asked not to be identified, citing the interconnections among various companies and his employer, said that Blackboard will gain business it couldn't have won otherwise through Angel, but that the move could strengthen some of the remaining groups trying to be "the company that is not Blackboard," which is the company some colleges want. While some colleges are embracing open source models, this analyst said, Angel was attracting a growing group of clients who for a range of reasons weren't seeking to go open source and who don't feel comfortable with Blackboard. And it's not clear that buying Angel will result in the changes Blackboard wants.

Some who dislike Blackboard took instantly to Twitter to comment on the announcement. One college instructor, using Desire2Learn's acronym, wrote: "Holy Monopoly, Batman! Blackboard bought Angel. I stay off Twitter for 2 hrs & whole world changes! Help me D2LKinobi, you're our only hope." Another wrote: "Blackboard acquires Angel! Denizens of Alderon screaming last breath-but as Leia says (paraphrase) 'Like sand through the imperial grip.' "

Perhaps of greater worry to Blackboard will be the reaction of Don Gardner, associate vice provost for academic technology at California State University at Long Beach. That university just completed a lengthy review process for its course management system and decided to move from Blackboard to

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Angel. Gardner said late Wednesday afternoon, within an hour of the Blackboard announcement, that he was consulting with the university's purchasing department on whether the news would justify Long Beach abandoning its new contract with Angel.

"This is of grave concern to us," said Gardner. He said that Blackboard has provided "consistently poor customer service" both at Long Beach and at the previous institution where he was CIO, Weber State University. He said that the review process led him to think that Angel was "like day and night" compared to Blackboard on customer service. Blackboard wasn't even the university's second choice, Gardner said (Moodle was).

Told of Blackboard's praise for Angel's customer service record, Gardner said: "Their intentions may be sincere, but I have no faith in their ability as a company to become more like Angel."

Fred B. Lokken, associate dean for teaching technologies at Truckee Meadows Community College, said he was stunned and "more than devastated" by Wednesday's news. Truckee Meadows had been a WebCT client until Blackboard bought that company in 2005. Shortly after that purchase, Truckee Meadows reviewed its options, after finding that customer service -- strong under WebCT -- declined after the purchase. Angel was also less expensive and a faculty panel that reviewed the options favored Angel, making it "an easy choice," Lokken said.

He said that Angel has lived up to all of its promises, and that the system is popular with those who use it -- explaining his dismay over the news. He said that Blackboard had promised to maintain the same level of quality WebCT provided, and that the company didn't follow through. He said that the press release issued Wednesday reminded him of the statements made when the company bought WebCT "and that's why I'm skeptical."

Lokken is chair of the Instructional Technology Council, an affiliate of the American Association of Community Colleges that focuses on technology issues. The council conducts annual surveys of its members and has found up to one third of them considering changes in their course management systems -- a percentage that Lokken predicted would increase if colleges that opted not to have Blackboard find themselves with Blackboard.

He stressed that it's not just the service provided, but a matter of philosophy. He noted that Angel will be the second company popular with community colleges to have been made a subsidiary of Blackboard. Further, he said he objected to the "predatory" way that Blackboard is fighting with Desire2Learn over patents. "Is the idea to own the market so that we have no choice?" he asked.

Lokken's advice for Blackboard is to keep Angel as separate and independent as possible. "I'm skeptical, but there's a lot Blackboard could learn from Angel," he said.

Others who have made the move from Blackboard to Angel had mellower reactions, while still expressing worry. Washington Online, which provides distance education and support for hybrid courses for the community and technical colleges of Washington State, is in the final stages of a 12-month transition

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from Blackboard to Angel and both systems have been running parallel for almost a year. Cable Green, eLearning director for the system, said that a review found Angel superior on the tools it provided and customer service, and that a faculty panel had designed its own rubrics and -- in the decisive recommendation -- strongly backed Angel.

"Our big question is what will Blackboard do with Angel," he said. Green said that customer service definitely lagged when Blackboard took over WebCT. "I hope that they have learned from that," he said. "That's why many of us are nervous about this."

So far, he said, he was very pleased with the transition to Angel, and that he would have to hope for the best.

For all the criticism Blackboard receives, its services are used routinely on college campuses nationwide by professors to organize their courses and communicate with students and for a range of additional services that have been added on over the years, including plagiarism detection. Blackboard has grown steadily since its 1997 founding.

Michael Chasen, president and CEO of Blackboard, said that the acquisition was part of a continuing effort to "improve and get better as a company." He acknowledged a need to do a better job than was done a few years ago. "Since 2005, we’ve learned a lot about how way to mobilize talent and resources to support the e-learning community. That process hasn’t always been smooth, but our readiness to support clients in an acquisition is much improved."

Ray Henderson, chief products officer at Angel, said that "we're realistic that folks who have recently left Blackboard to come to Angel are going to look at this with some skepticism. We're realistic about that, and plan to address this." He noted that this month is the annual users' group meeting for Angel, providing an opportunity to give much more information to clients. "I hope they will pass from a period of initial skepticism to appreciation of a broader vision of how we'll combine the two companies," he said.

And both Chasen and Henderson stressed that there are many tools Angel has developed that will help Blackboard's customers. Henderson said that Angel has focused on tools that help professors, particularly those working with at-risk students. For example, if a professor knows that students who don't log in some number of times a week tend to do poorly, the system can be programmed to alert the professor about which students aren't logging in, enabling the professor to reach out to those students. Or if an instructor has assignments that are based on completion of previous assignments or scores on tests, the system can be programmed to automatically start students who have reached various levels on the next assignment, while holding back for those who are behind.

The reason Angel has done well with community colleges, Henderson said, isn't that it was seeking that sector per se, but was looking for "institutions that focus on teaching and learning," which is every community college, but not necessarily every four-year institution.

Chasen stressed that the attraction of Angel to Blackboard was respect for just the qualities that Angel's fans praise: teaching tools and customer service. He pledged that Angel customers would continue to receive strong support, that the new version of Angel that is coming out just as this deal is being announced would in fact come out, and that pricing would remain stable. Asked about the long term, he said it was too early to discuss specifics, but that "a possibility" would be for all of the company's customers to benefit from "the best features and functionality of Angel and Blackboard and WebCT."

One industry observer who asked not to be identified said that the news gives openings to Blackboard's remaining competitors, both open source and corporate. "This deal makes a lot of sense for Blackboard given that their WebCT customers have been fleeing to Angel, but I'm not sure that their former customers [who have moved already] will be thrilled. They made a specific decision to leave."

The key question, said this technology and education expert, is how Blackboard can develop "a migration plan" that satisfies its new customers.

Officials of Desire2Learn and Sakai did not respond to requests for comment and eCollege/Pearson declined comment.

Felice Nudelman, executive director for education of The New York Times, the parent company of Epsilen, said "Congratulations to Blackboard" on the news. But she saw the announcement as encouraging not just for Blackboard.

"The higher education market is in an exciting phase of development with many colleges and universities looking for the next iteration of e-learning," she said. "Epsilen and the New York Times Knowledge Network are excited about being in this space. I think the Blackboard acquisition of Angel creates an opening for Web 2.0 e-learning platforms like Epsilen and others."

 

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