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- Interesting Reads This Week
Interesting Reads This Week
Updates on recurring topics of the OPM market and ye old Arnold Ventures
Phil Hill
October 14, 2023
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Morgan is recovering from a Chicago-based food coma, so you get me this week for Interesting Reads, with all of the capitalization and commas that this entails. Expect to see her Educause coverage on Monday.
For this week, I’ve picked articles that provide updates and clarity on two recurring topics at On EdTech - the OPM market and seeing the Arnold Ventures in action.
OPM Market Doom and Gloom
On Wednesday Lauren Coffey at Inside Higher Ed posted an interesting article with the provocative title “OPMs on ‘Life Support’ in Changing Online Marketplace.” I can’t really complain about the language as it came from me.
he online program management industry is “on life support,” according to some experts who point to multiple shake-ups at some of the biggest players in the market.
Online program managers, better known as OPMs, made headlines over the summer with the sale, rebranding and subsequent layoffs at Pearson Online Learning Services, now known as Boundless Learning. While declining to give exact numbers to Inside Higher Ed, Boundless Learning CEO Kees Bol said the company laid off roughly 30 percent of the company “across all levels and functions” following the sale of its online services division. A Pearson representative declined to provide further comment beyond the company’s initial statement. [snip]
“Schools have to ask themselves, ‘Is this the end of the OPM? Do I trust they will be around?’” said Phil Hill, a market analyst and ed-tech consultant with Phil Hill and Associates. “Right now, there’s a mind-set of how schools think of the market.”
The article uses the Pearson / Boundless story as a setup to discuss how the OPM market is in real danger right now, and Coffey mentions several examples of how OPM companies appear to be shifting models and moving to other non-degree industries. You can see the significance of these moves in 2U’s most recent earnings presentation, where degree-based revenue dropped 16% year-over-year while alternative credential revenue increased 4%.
But this view still includes higher education writ large. You can see more of the change in the earnings call transcript.
Third, we're rotating from reaching consumers to serving enterprises and governments and therefore, gaining access to larger addressable market with an extremely efficient model. You'll see 2U continue to focus on growing the enterprise business with a series of offerings that make us unique in the space. Enterprise revenue grew 35% this quarter. We expect continued strong growth in the future.
”Enterprise”. Read that as maybe higher ed provides the content, but the real customers are businesses and governments, which is a shift from the company’s roots.