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What do you think of Blackboard's big announcement that they are buying Moodlerooms and Netspot, and bringing Chuck Severance and the leadership of these companies to a new Open Source Services business?

This is clearly big news. And I imagine that many people in our community will have strong reactions. Ray Henderson acknowledged this in his thoughtful post on 3/26/12 "Evolution Unbound: Blackboard embraces open source." Ray writes:

"We understand that our announcements today may generate a mix of reactions. Longtime participants in the open and community source communities may be concerned about our corporate intentions, and how we’ll conduct ourselves given that we are governed by an interest in business growth."

I'll be interested to read the analysis, and your opinions, about these Blackboard developments. For now here are my first reactions:

Is This Good for Higher Ed?: I do believe that the purchase of Moodlerooms and Netspot, and the launch of Open Source Services business, is a good thing for higher ed. I think we will look back on 2012 as the year that the learning technology businesses finally reached the maturity level of the administrative academic technology sector. Two developments have been necessary for this maturation, and I think that Blackboard is getting it right with these new acquisitions and business lines. The first development is the need to move learning technology from a product to a service. The second development is the ability to move to selling these services at scale.   

Blackboard's Surprising Move
Read Steve Kolowich's reportage
and analysis
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"bear hug" of open source.

Moving from a product to a service is necessary because services offer the highest value add, and therefore the highest profits. A learning technology company that can be a full-service provider, offering the full range of educational services, from market research to recruiting to program and course development to platform hosting to retention analysis (analytics) to student support, will ultimately provide the greatest value to post-secondary institutions. The ability to source all of these services will allow colleges and universities to focus on core strengths (teaching, knowledge production), while serving new markets (increasing supply) that were unreachable when they had to either create these services in-house, or string together and coordinate multiple vendors. It will be the partnerships between institutions of higher education and full-service learning technology providers (such as Blackboard) that will ultimately result in increased educational quality, increased student access, and lower overall costs in higher ed.   

The ability to go to scale is the second reason that Blackboard has made these acquisitions. By scale, I mean both the option delivering a full range of learning technology services, and the ability to deliver these services across large numbers of students and institutions. My intuition is that the largest scale learning technology partnerships will ultimately not be found in the U.S., but in emerging economies such as China and India. These countries will need to leapfrog the traditional bundled, place-based, lecture driven educational format in order to meet the exponential growth in demand for higher education.  In the short-to-medium term, there are plenty of very large public institutions - from community colleges to large public  research institutions - that will also need to scale the delivery of educational services. These institutions will now have a potential full-service partner in Blackboard, giving them more (not less) leverage in negotiating terms with other potential vendors.

Is This Good for Blackboard?: These investments in Moodlerooms and Netspot are clearly a very smart move for Blackboard. The emphasis on bringing on the respected leadership from these companies, and Chuck Severance as the chief Sakai architect, demonstrates some real wisdom on Blackboard's part.   Blackboard's Open Source Services strategy, however, is not without considerable risks. The largest risk will be if Blackboard can retain Ray Henderson and his leadership team, including the people coming over from the newly acquired businesses, to see this strategy to fruition. Blackboard is placing a great many of their intellectual and strategic eggs in the hands of Henderson, and a failure to retain Henderson and his team would dramatically set back the company's effort to transform itself from a product company (with a conflicted brand) to a service offering (with the stellar brand that service plays require).   

The other risk is of course execution. Will Blackboard be able to focus attention on a smaller number of larger full-service relationships, or will they be distracted from the numerous small customers they have that pay only product licensing fees, and remain expensive clients in terms of providing ongoing service and support? And while moving to a service provider, will Blackboard be able to integrate the disparate technological platforms (from the core Learn offering to Moodle to Sakai to mobile to analytics, etc. etc.) into a coherent set of end-to-end solutions?   

What do you think Blackboard's big news?

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