Reactions to Pearson Buying EmbanetCompass

October 17, 2012

What do you think of Pearson's purchase of EmbanetCommpass?

Some quick reactions:

1. Smart Deal at a Good Price: I've spent some time with the folks at EmbanetCompass and I've come away impressed with both their team and the services that they offer. At $650 million I think that Pearson is getting very good value. Pearson's and EmbanetCompass' online program management services are complementary, as this purchase enables Pearson to leapfrog into a leadership position in graduate and high-end programs. The revenues from the partnerships with the 35 schools that EmbanetCompass currently enjoys will be stable and should increase, meaning that the long-term value of the deal will only grow. These sorts of partnerships take a long time to negotiate, and are more solid as EmbanetCompass invests up-front dollars in order to realize a downstream revenue share. Pearson will be able to lower the costs of designing, delivering and supporting online education as these costs will now be able to be spread across more students and institutions. This deal makes lots of sense.

2. The Pearson Leadership Team is Impressive: This purchase of EmbanetCompass is another indicator to me that Don Kilburn, CEO of Pearson Learning Solutions, and his management team at Pearson are amongst the most talented and farsighted leaders in the publishing and educational technology industry. Under Kilburn, Pearson is assembling the pieces to offer the sort of full-spectrum services, platform and content that higher education institutions will be looking for in choosing our partners. Of course, I would like to see Pearson move more aggressively along a number of fronts, including bringing its considerable assets and talents to the open education movement. But this purchase of EmbanetCompass demonstrates to me that Pearson has a long-range plan to transform the company for the digital age, and that they are executing on that vision.

3. Some Possible Interesting Implications for OpenClass:  This might be a stretch, but I'd love to see Pearson start to leverage OpenClass to bring down the costs of schools aggressively into online and blended programs. There is no doubt that the Pearson services group will be platform agnostic. And Moodle is a great open source platform in which to build online programs around. But Pearson's native cloud based OpenClass could evolve into a powerful next generation learning platform, given enough investments and hooks into other Pearson platforms (such as simulations) and Pearson content. Reducing platform and hosting costs to near zero would free up considerable resources for program development, marketing, learning design, faculty training, and student support. Costs could further be decreased by bundling curricular content with the platform and services. Pearson should set aggressive objective to lower the costs of delivering online education while increasing the quality of the offerings.

What do you make of the Pearson acquisition of EmbanetCompass?  

Was this a missed opportunity for Providence Equity Partners?  

What do you think will be the next big deal in the education and publishing space?


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