Signaling a dramatic shift in strategy and product offerings, Blackboard Inc. last week purchased two companies built on the Moodle platform, the free learning-management system popular mostly because it is an alternative to Blackboard.
For an undisclosed amount, Blackboard bought Moodlerooms and NetSpot, two companies that help users manage and customize the Moodle learning-management-system, or LMS, software.
Moodle is free and “open source,” which means its code is available for anyone to use to improve products and build new ones. That’s often hard for resource-strapped schools to do, so they pay companies like Moodlerooms and NetSpot to do it for them. The companies often pay Moodle royalties to help sustain the platform. Learning-management systems do everything from organizing administrative tasks to delivering online content to personalizing professional development.
The acquisitions sparked strong reaction — initial surprise and then speculation about where Blackboard, the largest LMS provider in education, is headed. Blackboard officials said the moves fit with an evolving strategy to offer customers a wider range of services, instead of one proprietary product.
But many in the education technology community dismissed the move as Blackboard’s attempt to join a community with values starkly different from its own.
“Their behavior in the past … is about as diametrically opposed to open-source behavior as you could imagine,” said David Wiley, an instructional technology professor at Brigham Young University in Provo, Utah.
History of Lawsuits
In the past, Washington-based Blackboard sued companies for infringing on its technology patents, causing critics like Mr. Wiley to question the motive behind Blackboard’s recent acquisitions. In an interview, the company’s chief technology officer, Ray Henderson, said those lawsuits were “not our best example of the citizenship with our industry.”
As such, Blackboard officials anticipated some backlash to the acquisitions of Moodlerooms of Baltimore and NetSpot of Adelaide, Australia. After making the announcement, the company released a pre-emptive explanatory blog post from Mr. Henderson and a letter from Blackboard officials to the open-source-software community.
The concern of that community, expressed through social media and the blogosphere once the acquisitions were announced, is that Blackboard will eventually fold the Moodlerooms and NetSpot technology into its proprietary Blackboard Learn LMS, or that the company simply wants to profit from open-source technology because those products are threats to its business.
Blackboard’s share of LMS adoptions, at least among colleges, has dropped significantly, from 71 percent to 50.6 percent in the last five years, according to the Campus Computing Project, as cited last week by the online news site Inside Higher Ed. By acquiring Moodlerooms and NetSpot, Blackboard will now sell multiple learning-management systems, instead of just its own.
“In other words, they don’t care what LMS you pick,” Josh Coates, the chief executive officer of Instructure, an LMS provider that also offers an open-source product, wrote in his company’s blog. “They will gladly take your money for whatever flavor of LMS you choose, as long as they can bill you for generic [information technology] software and services.”
Mr. Henderson dismissed Mr. Coates’ assessment. Since Blackboard itself was purchased last year, for $1.6 billion, by the private-equity firm Providence Equity Partners, it has changed its outlook, Mr. Henderson said. For starters, Blackboard is no longer a publicly traded company, which means it isn’t beholden to shareholders, he said.
The company realized that the LMS market is fragmented, and to offer customers what they need—a full range of “education services"—Blackboard had to invest in its own products, as well as those elsewhere on the market, Mr. Henderson said.
“This is simultaneously investing in multiple products, rather than thinking any one approach is going to do,” he said.
To that end, Blackboard says it will leave the Moodlerooms and NetSpot teams intact and claims nothing will change for those products’ existing customers. The contributions those companies provide to the Moodle platform will continue.
Lessons From IBM
And there is the possibility of integrating the products—using Blackboard’s technology-consulting services to help schools better use Moodle clients. Moodlerooms Chief Executive Officer Lou Pugliese suggested Blackboard’s mobile and analytics products could be useful to his customers, many of whom already use Blackboard services.
“Because we are competitors, in the past we have been a little reluctant to work in a collaborative and integrated way,” said Mr. Pugliese. “That way didn’t serve the market very well.”
Along with the acquisitions announcement, Blackboard launched a new education open-source services division, “dedicated to supporting the use and development of open-source learning technologies.” The company also hired Chuck Severance, the founder of Sakai, another open-source LMS platform, to head services Blackboard will offer to Sakai customers.
It’s those initiatives that people in education technology will be watching closely.
“I could see some good possibilities, but as you know, Blackboard’s reputation is not stellar from the past, so the community is naturally suspicious,” Martin Dougiamas, the founder of Perth, Australia-based Moodle, said in an interview.
Mr. Dougiamas started Moodle about a decade ago as an alternative to WebCT, an early LMS provider eventually purchased by Blackboard in 2006. In general, such systems have caught on more with colleges, but Mr. Dougiamas said that even early on, K-12 schools had interest in Moodle because it wasn’t as costly. The platform has grown to hundreds of thousands of users and, he stressed, dozens of service providers beyond just Moodlerooms and NetSpot.
Several officials involved in the acquisitions met with Mr. Dougiamas a few weeks ago to tell him about the move. “There was quite a lot of processing to do,” he said.
Mr. Dougiamas suggested IBM as a responsible model of for-profit and open-source cohesion. In an equally surprising move, in 2000 IBM announced it would offer Linux, a free, open-source computer-operating system, on its products. For the most part, IBM has integrated Linux into its offerings, while allowing it to evolve independently and contributing to its vision, said Mr. Henderson, who noted that relationship is one Blackboard hopes to emulate.
But, of course, it’s not necessarily up to Blackboard to decide how it will be perceived. Mr. Henderson, the chief technology officer, is clear that open-source LMS software must be “owned and governed by a community separate from that company.” Presumably, that governance includes the option of shutting out that company.
As Mr. Wiley of Brigham Young pointed out, that community may simply decide it doesn’t want to welcome Blackboard and, as other technologists have suggested, stop contributing new code, software, and ideas.
“Many people are Moodle users because they did not want to be Blackboard users,” Mr. Wiley said. “To wake up one day and find the company you think you’ve managed to avoid allying yourself with has bought the company you use—it’s jarring.”
