LMS Market Acceleration: An initial view in North America

We’ve all known that 2020 is a year like no other (and let’s hope that includes future year comparisons), and we know that LMS usage is increasing across the board as schools rely largely on remote and hybrid education. But there has been an open question whether the LMS market would decrease or increase in selection activity (adopting a new LMS or switching vendors). On one hand, there was an argument that schools needed to focus on teacher preparedness and academic technology support (including the adoption of new tools), therefore the market activity was likely to decline over the next few years. On the other hand, there was an argument that LMS usage and support has quickly gone up the priority list for most schools, and there is a need to get off the ball and make sure schools have the system they need for the future.

Most indications thus far support the latter argument with the LMS market appearing to accelerate in 2020.

Note and Disclosure: The following data come from our LMS Market Analysis service, where we have further data insights and trend analysis. Several vendors (e.g. Instructure, Blackboard, D2L, Schoology, Moodle) and investors have been clients of this service over the past four years. UCLA was a consulting client of mine when they consolidated on Moodle in 2006, and NYU was a client of MindWires in their recent LMS evaluation process.

K-12

Let’s start in the North American K-12 market where there has been the strongest argument for increased LMS market activity. Why? According to our data, for districts with more than 2,000 students (which represents 85% of total K-12 enrollment in the US and Canada), we estimate six out of ten of those districts have at least one LMS, and eight out of ten students are in a district with an official LMS. In other words, the K-12 LMS market is not yet saturated, and many schools have had to adopt a district-wide LMS for the first time this year. Looking more broadly to also include districts with fewer than 2,000 students, we are indeed seeing far more activity in 2020 than last year, even though we still have three months to go. We are not back to the 2015 peak of the market, but we are seeing a reversal in the trend.

Update: Note that our data take a few months to be collected, so focus on the trends and relative numbers. 2020 is likely to end up much higher than we’re already seeing.

Beyond the overall market acceleration, there are some interesting product trends to note:

• Google Classroom’s fast adoption has slowed down, despite the general rockstar status this product has enjoyed in K-12 conferences and discussions;

• Schoology seems to have accelerated more than any other system this year after the late 2019 acquisition by PowerSchool;

• D2L Brightspace has big wins this year, particularly in Manitoba, continuing their uneven presence in the market; and

• Instructure Canvas continues to do well in the K-12 market.

Higher Ed

In the higher ed market for four global regions (North America, Europe, Latin America, and Oceania), it is a different story without clear conclusions yet. Looking at Trailing 12 Month New Implementations, we had been seeing an increase in activity until the pandemic hit in the spring, when the market dropped, followed by a recent small increase. But pure data views are not conclusive.

Where we are seeing the market increase is in the revived or new LMS evaluation projects on an anecdotal basis. Most schools in the global regions we cover already have an LMS and have not had to deal with emergencies – there has been little reason to switch this year. But at the same time, we are seeing significant LMS evaluations emerge or re-emerge that seem to indicate increasing market activity. Why is this? The two primary reasons are 1) expiring contracts in several large systems that require a competitive bidding process, and 2) LMS strategy becoming even more mission critical to institutions where an increasing amount of student and faculty presence takes place in the virtual world. In other words, a view of we better get this right and not just avoid disruption from a vendor change.

As a sample of the new activity (we are hearing of many others privately):

• UCLA is completing its LMS evaluation and migration plans, moving from Moodle to Canvas;

• SUNY has released its RFP for a systemwide LMS;

• CUNY is doing an LMS evaluation in preparation for its contract end date in 2021;

• Tennessee Board of Regents (TBR) is in the final contract stage of its systemwide LMS decision – expect a separate blog post on this one later this fall;

• NYU is moving from Sakai to D2L Brightspace; and

• Texas A&M and several CalState campuses are moving to Canvas.

Treat the higher ed market increase more as us reading the tea leaves than having a definitive data analysis.

Investor Activity and ClassEdu Market Entry

At the same time, we are seeing an increase in investor interest in the LMS and associated markets – in terms of new investors getting involved and new investments to consider (nothing can beat the Instructure sales process, but this is different). One example of this activity is the return of Michael Chasen – co-founder and ex-CEO of Blackboard – to the EdTech space with an initial product that appears to be somewhat of an LMS built on top of Zoom. Class for Zoom.

What is noteworthy beyond the Chasen and Blackboard angle is the amount and timing of investment. The company and its core idea originated in March, and six months later ClassEdu has raised $16 million. For background reading, we recommend:

• YouTube video introducing Class for Zoom;

• TechCrunch article on the company and product launch (I still can’t believe I’m recommending TechCrunch, but this article has a good description); and

• Inside Higher Ed article on Zoom U 2.0.

In addition, we recorded a MindWires Musings podcast episode where Jeanette Wiseman and I break down the news and discuss whether this is a real issue for the LMS market or not (tl;dr – it is, at least in the short term).

We’ll keep watching the market and sharing in future posts.

The post LMS Market Acceleration: An initial view in North America appeared first on Phil Hill & Associates.