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Warning: This blog post is entirely speculative and quite likely wrong in many (if not all) areas. Unfortunately, I know little about Desire2Learn - having never utilized their LMS. The Desire2Learn people I heard speak at the EDUCAUSE conference were quite smart, and I heard positive things about the platform from some attendees. Pearson's LearningStudio is a new platform created out of the acquisition of eCollege and Fronter. As of yet, I have not tried the platform. In talking to the Pearson executives they appear to be fully committed to support this product and to offer an innovative and compelling solution. I'd like to learn more about both platforms, as my LMS knowledge base starts and ends with Blackboard and Moodle.
Okay.....
Now that the ridiculous Blackboard lawsuit is settled, is it time for Pearson to acquire Desire2Learn?
Pearson knows that to survive in an age of content abundance that they need to offer a vertical, integrated, and service-based solution to the educational market. This is why Pearson purchased both eCollege and Fronter to create the Pearson LearningStudio service. This service can leverage Pearson's core competencies in education. An LMS (LearningStudio) is an important hub and aggregator for educational services.
Desire2Learn is the final independent for-profit LMS provider (am I missing any?). A Desire2Learn acquistion would offer Pearson the 3 things that it needs if LearningStudio is to have any hope of displacing Blackboard and Moodle:
1. Mindshare: The Desire2Learn platform is well known and respected within the higher education community.
2. Client Base: The Desire2Learn higher ed. client base is impressive. In the LMS market it is often more efficient to buy new clients then acquire them, as switching costs for colleges and universities are so high. Pearson could immediately offer Desire2Learn customers enhanced content and other services.
3. Scale: Combining the LearningStudio (eCollege) and Desire2Learn platforms would begin to provide the necessary scale to economically extend this offering using Pearson's Software as a Service (SaaS) architecture. SaaS is not currently the model of Desire2Learn, which offers local or hosted installations, but will emerge as the dominant model for enterprise academic software over the next five years. Scale also brings efficiencies to other operations, such as sales, technical support, and product development.
The only way that Pearson will be able to dislodge the dominant LMS incumbents will be to offer a superior value proposition based on price and integrated quality content/curriculum. Pearson does not need to earn money on each LMS sale. Rather, Pearson needs to engineer opportunities to up-sell value added services.
The LMS is being commoditized. The platform is less important then the relationships with customers and installed user base. Over time, the best features of Desire2Learn could be folded into the LearningStudio and delivered as a service. Subscription costs for the core LMS platform will come down, creating up-sell opportunities for services such as integrated (multimedia) content libraries (a Pearson speciality), secure testing facilities (which Pearson already owns), and integrated multi-platform curricular content.
A combined Desire2Learn / LearningStudio platform, one that is built (eventually) around a low-cost SaaS model and can be seamlessly bundled with an array of value added services and products may represent a viable model to challenge the emerging Blackboard/Moodle hegemony.
Okay ... what do you think? Where does my analysis break down? Where did I get this wrong?
