About the Class Technologies Acquisition of Blackboard Collaborate
Anthology, which acquired Blackboard in the fall, or more accurately whose private equity primary owner Veritas Capital acquired Blackboard and combined with Anthology in the fall, announced a new deal with Class Technologies. Class is the company founded and run by Blackboard co-founder and former CEO Michael Chasen that provides education-specific virtual classroom software on top of Zoom. From the announcement:
The rationale provided is focus – Anthology to focus on the LMS, Class on synchronous virtual platforms.
I had a chance to interview both Michael Chasen and JD White, Chief Product Office of Anthology, to get further details.
History is Relevant
The Washington Business Journal gets their history wrong, or at least partially wrong, in their coverage “Michael Chasen helped launch Blackboard Collaborate. Now he wants to buy it back.” To understand this deal it helps to connect some historical dots. What actually happened is that Blackboard in 2010 acquired two virtual synchronous platform providers – Elluminate and Wimba – for a combined $116 million ($154 million in 2022 dollars). Blackboard then rebranded the combined entity (primarily Elluminate) as Collaborate. At the time, Elluminate and Wimba had a combined 240 employees and 2,600 clients. Today’s deal, reported to be for $210 million, will move roughly 60 Collaborate employees and 1,300 clients over to Class.
What Does Anthology Get?
Besides the reported $210 million, Anthology gets focus. Collaborate was never going to be a growth opportunity for Anthology, as Zoom and Microsoft Teams have passed it by. This is probably the best news from an Anthology and Blackboard perspective, as it shows that the new ownership and management are willing to make changes and not hold on to a platform that is mostly frustrating customers today.
Anthology can now focus much more on just the LMS, Blackboard Learn.
And yet . . . that does go against Blackboard’s strategy of providing a common data service based on shared platforms from the company.
JD White acknowledged that this change is relevant but that Anthology remains committed to leveraging combined platform data to provide insights for education clients. It’s just that Collaborate will no longer be a native platform, rather it will be integrated. Chasen described Collaborate’s deep integration with Learn as a key feature of the platform, but no matter how you slice it, this acquisition will remove Collaborate to a degree. Separate platform soon to be based on Zoom, controlled by a separate LMS-agnostic company.
I still think the move makes sense from Anthology’s point of view, but this area of Bb Data will take a hit.
What Does Class Get?
In a nod to the past days of Blackboard under Chasen’s leadership, Class primarily gets market share. From the TechCrunch article:
In my interview, Chasen also mentioned the 1,300 Collaborate clients, but somebody has a math error. Class seems to have between 350 and 450 clients before the acquisition.
There is a secondary benefit in Class getting a combined feature set, with the opportunity and staff to combine Class for Zoom and Collaborate into a richer offering. But I will also note that I heard the same arguments when Blackboard bought WebCT, and in the end, WebCT shut down and Blackboard continued – with some new features, but not a full fusion of the product lines as promised.
But the primary benefit of market share is undeniable. With any reasonable level of client retention, Class will triple their client base at the least. And I suspect that Class will be seen by many clients as a beneficial owner, particularly if and when they drop or at least reduce the Collaborate excess storage fees.
Whither Collaborate the Platform?
I do not see how it makes sense for Class to support both their Zoom-based platform and Collaborate long term, and Chasen does mention Zoom being the “long-term” play. When I asked about Collaborate’s future in my interview, Chasen clarified that video conferencing based systems are different than LMS solutions, in that they have mostly similar functionality. The big difference is in the backend and ability to handle scale. Essentially the most important platform rationalization is to move Collaborate onto the Zoom platform as well, which Chasen stated would be the next major release.
That leaves the question of how long Class will keep the Collaborate brand and partially-separate product line alive. Chasen did not directly address this part of the question, but I am guessing it will be a matter of a few years, based on time to ensure there is a common feature set and commitments to migrate most of the remaining customer base. For the short term, the new product will be called Class Collaborate.
Both Class and Anthology remain committed to open integrations, most often leveraging IMS Global’s LTI standards. Chasen stated that his companies current partnerships with D2L and OpenLMS remain important parts of the company business. Class uses Moodle as the basis for its LMS-like feature sets, and OpenLMS (the Moodle-based platform formerly known as Moodlerooms) is another key partnership in this area.
Putting it together, this is an interesting acquisition both in terms of product strategy and in terms of evolving financial markets for EdTech companies.
Disclosure: Blackboard and several of their competitors are subscribers to our LMS Market Analysis service.
The post About the Class Technologies Acquisition of Blackboard Collaborate appeared first on Phil Hill & Associates.