Looking Ahead to the New Year

Like Southwest Airlines baggage, it's great to reconnect after a few weeks apart. Happy New Year! After a fateful 2022 coming to a close, it's time to look ahead to 2023: including upcoming changes to the newsletter, upcoming reports, and EdTech themes to watch.

LMS Higher Ed Year-End 2022 Report

As noted in our previous newsletter, this year we are working to release the Year-End 2022 report in early January instead of at the end of the month. Expect the report in your inbox next week!

With that in mind, we'd like to share some initial data from the report. Please note that the data may change with our remaining QA work over the next week. This one is a combination of market share for North America (US and Canada), showing it as a percentage of institutions and scaled by enrollment.

We'll call out more information in the report, but note Populi LMS, which is gaining quite a few small private schools (increasing % of institutions but very little in terms of enrollment). Also note that we are pulling out Open LMS from the broader Moodle group, even though Open LMS is based on Moodle. Moodle's total market share in North America is closer to 20% (combining the two), but now we show the breakdown, which will be more important in other global regions.

EdTech Trends to Watch

One piece of our changed infrastructure is moving from MailChimp to Beehiiv as the email / newsletter service. I have been exploring options for a while but late last year MailChimp made it easier by raising their price by 17%. I understand their aggressive moves, as last year's acquisition by Intuit for roughly $6.3 billion must generate financial returns. We use MailChimp for the newsletter, but to justify the high price, Intuit wants MailChimp to be a more complete marketing platform, similar to Hubspot. This means we would need to pay more for features we don't need, so it's time to move on.

At the same time we have used Coupler.io to combine readership statistics from the newsletter and the website for both the paid subscription and the free PhilOnEdTech blog. Coupler.io just sent a notice that their prices are going up by 100%. That's right - they're doubling prices. While I like endorphin rushes like most people, we don't need combined readership statistics that much. Another service dropped (not one that readers would notice).

The reason I share this story is that I strongly suspect we're going to see this same trend in EdTech in 2023. Investors in technology-related stocks have changed their perspective in fundamental ways since late 2021, with the macroeconomic trends of persistent inflation, war, and the looming (or emerging) recession. These trends are driving most capital markets (angel funding, VC funding, public equities) to no longer reward growth at all costs, and instead to reward profitability and the ability to weather the storm. Of course growth is desired, but it is most often secondary to profitability. EdTech is no different.

Add to this investment change the long-running declines in US higher education enrollment and what I call Covid Hangover, particularly in K-12 markets, where the government spending spree is winding down and schools need to digest all their EdTech. Learning platforms, academic integrity services, niche learning tools, accessibility tools, etc.

These drivers will likely impact 2023 in two primary ways.

• Continued M&A activity, with even more EdTech companies being acquired just to survive, often by larger players (both larger companies and private equity firms).

• Increased pricing for core services that have remained at low levels for more than a decade.

Schools (both higher education institutions and K-12 districts) have their own financial challenges, so any price increases will not be popular. But 2023 could be the year when pricing (again) becomes a major factor factor in EdTech. This could force schools to reduce the number of EdTech platforms to deal with pricing from core, mission-critical platforms.

For now, expect more coverage in this newsletter of pricing over the coming year.

Expanded Newsletter

Beyond the change in underlying newsletter infrastructure, we are also planning to expand our coverage early this year. This will include some rebranding to simplify the joint offering of free and paid content. We look forward to increasing our services to our market analysis subscribers, and again we wish you a Happy New Year.