Instructure's Lessons

Why the shift to cloud LMS platforms a decade ago is analogous to the transition to low-cost online scaled master's programs today.

December 8, 2019

Before we talk about Instructure, let's get something out of the way.

Does anybody write about the ed-tech ecosystem, including the LMS and OPM worlds, as skillfully as Phil Hill?

How should we make sense of the fact that the best analysis at the intersection of higher education, technology and companies is coming from outside higher ed?

Anyway, I've been greatly enjoying Phil's recent articles on Instructure. Anyone who read “Why Instructure's News Matters: Market History” and “Why Instructure's News Matters: Big Tech,” was not surprised by the news that Instructure is set to go private.

Many of us have questions about what this $2 billion deal will eventually mean for Canvas and the broader LMS ecosystem.

Will Instructure finally begin to invest more in R&D? Will prices go up? Will a focus by Instructure on the academic market, as opposed to corporate learning, give a much-needed push to the stalled shift to mobile learning? Might we see a resurgence by Blackboard and greater excitement around D2L?

These are all important questions. But I don't think that the short-term impact on the LMS market is the most interesting way to think about the Instructure news.

Instead, this might be an excellent time to take a step back and give some thought to what those of us who work at colleges and universities might learn from the Instructure story.

I've been writing about Instructure since 2011. Back in 2011, I wrote that “Instructure Canvas Has Some Buzz.” That year, I wrote a piece where I gave “Instructure's Canvas LMS: 7 Cheers.”

What I most remember from 2011, however, are conversations that I had with the leadership of Blackboard. (Which was then my school's LMS.) I tried to convince Blackboard's leaders that they needed to accelerate their transition to the cloud -- that Blackboard had to be willing to commit to moving away from selling software to schools to be hosted on-campus data centers and instead, go all in on a shift to SaaS (software as a service).

Back in 2011, Blackboard's leadership did not believe that Instructure was a real threat. They saw Canvas as an immature product.

Blackboard was focused on making acquisitions to cross-sell (or bundle) other services. Remember Wimba and Elluminate -- which became Collaborate? Or iStrategy (analytics) and Presidium (student services)?

All these acquisitions caused Blackboard to take their eye off the ball, leaving the field wide-open for Instructure to come to market with a born cloud LMS.

As we look to 2020, what might we at colleges and universities be doing that mirrors Blackboard's blind spot a decade ago?

Are we facing an existential threat (or opportunity) as potentially significant as what Blackboard wasn't able to see coming, with the shift from locally hosted learning management platforms running in the campus data center to cloud- (AWS) enabled services?

What is our Instructure? What is our cloud?

I think that for colleges and universities, our existential threat (and opportunity) is the shift from expensive midstatus residential master's degrees to affordable scaled online graduate programs.

Just as Instructure moved to leverage Amazon's cloud infrastructure to offer a cloud-based LMS that universities could trust, the evolution of scaled learning platforms from Coursera and EdX will rapidly catalyze a sectorwide transition in the market for professional graduate credentials.

The shift to affordable master's programs through university partnerships with Coursera and edX will challenge the business models of many schools.

Institutions with strong national and global brands, and regional schools that move aggressively into low-cost degrees at scale, will be fine.

As less expensive online master's programs proliferate, highly selective schools that offer intimate learning experiences (both online and face-to-face) will continue to prosper.

Over the next decade, we will see the death of the high-priced master's degree at every school, save for those with an existing national or global brand.

What should be done?

Like Blackboard a decade ago, leaders of every college or university outside of the top 25 that depend on master's degrees to support undergraduate programs (tuition discounting) should internalize the existential threat.

Presidents, provosts and deans at every regional institution should be aggressively investigating how to dramatically decrease the price of their professional master's degree programs through a scaled online approach.

Affordable master's degrees -- such as Boston University's $24,000 M.B.A. - should have most schools as worried today as Blackboard should have been concerned about Instructure a decade ago.

Just like Blackboard's leadership a decade ago, too many of today's higher ed leaders seem unable to grasp just how quickly an ecosystem can shift.

Just as Blackboard was unable to move quickly enough from selling software as a package to selling software as a service, I fear that many universities will not grasp the potential of creating online programs that trade high costs for scale.

Where am I getting this wrong?

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Joshua Kim

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