Observations on the Higher Education LMS Market

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Recently, Phil published the latest LMS squid diagram as part of the end of year 2023 view of the LMS market. This comes in the wake of the release of our Year End 2023 Report for On EdTech Enterprise subscribers.  I wanted to highlight some additional findings of that report for our general readership. As has been the case since 2016, the market share data behind much of our analysis comes from our partners at ListEdTech.

Beyond the squid

It is extraordinary how influential the squid diagram has become since Phil first published it in 2009.

A few years back, before I joined Phil at PH&A, I was speaking about the LMS market on a conference call with a client in Australia. Behind them I could see a giant poster version of the squid diagram, stuck to the wall.

But that diagram only tracks the changes in the North American market, and although that market tells us a lot about the dynamics of the LMS market generally, it differs in some important respects as indicated by the current market in Europe (including the UK).

In all the global markets that we cover, the big commonality is the dominance of the big four products, i.e. Moodle, Blackboard Learn (Anthology), Canvas (Instructure), and Brightspace (D2L). In all global markets outside of North America, however, Moodle is dominant with a high of 73% (by institution) in Latin America to a low of 56% in Oceania (encompassing Australia and New Zealand). Furthermore, the common trend in most market sees Canvas and Brightspace winning clients, largely coming from Blackboard Learn and Moodle.

Market stability

Lately, LMS markets have been quite stable with little year-over-year change in market share. There has been a small but steady decline in Moodle market share in most regions, and over the past eight years, Moodle’s share of the market has dropped by 3% in Europe & the UK, by 5% in Latin America, 7% in Oceania and 4% in Asia. Only in the Middle East has Moodle’s share of the market increased over the same period, by 1% between 2015 and the end of 2023.

Although markets have been relatively stable and dominated by the big four, it is worth keeping two things in mind.

First, within a region, markets can vary quite a bit based on further breakdowns. In Europe, markets vary by country, especially with different open source inclinations in Germany and France and Spain, in contrast to Benelux, Nordic countries, and the UK. Another key variables is institution size. For example, across several global regions, Moodle is far more prevalent in smaller institutions (particularly those with fewer than 5,000 students enrolled) than in larger colleges and universities. Whether or not an institution is public or private also plays a role in shaping market share.

Even though the big four products increasingly dominate global markets, there is a long tail of other products used, especially as you begin to break down the market by size and control (public versus private). We found close to thirty smaller products in use that had at least 1% of market share in various sectors of the market. The products we found most often were Open LMS, Sakai, Schoology, Claroline and Classroom (Google).

Second, although the market has recently been stable, we  expect that we might be seeing increasing changes over the short to medium term, in part due to generative AI and also with corporate leadership changes.

AI and the LMS

For the past year we have heard a lot about AI in higher education, where it seems to have become a part of most conversations. The LMS, as a tool and topic of conversation, has been no exception.

Given the size and scope of the LMS as a platform, there are a plethora of ways that AI can be implemented within an LMS, from enabling administrative tasks to improving efficiency to facilitating greater engagement between students, between students and instructors and between students and learning materials. Where vendors choose to focus within this spectrum of applications will be telling and appears to show divergent strategies.

Despite the generally stable market, we don’t think of the LMS as a commodity, and how and where AI is integrated into the LMS will separate the products even further.

To date, Anthology has been the most ambitious LMS vendor by embedding AI in multiple parts of Blackboard Learn. Judging by the adoption rates we have already seen (more than 300 institutions already using the AI design assistant) and evidence of institutions seeking out Anthology to help discuss broader AI strategy, thus far this would appear to be an effective strategy.

D2L has taken an understated but thoughtful approach, focusing on using AI in assessment, especially formative assessment. The approach is well done and has been supported by real demonstrations of focused usage.

Instructure and Moodle, on the other hand, have tended to take more of a wait-and-see approach coupled with some experimentation. Instructure’s partnership with the Khan Academy and their AI-enabled Khanmigo tool is promising, although we have not yet seen concrete strategy on it changing the core LMS.

Leadership changes

2023 saw a lot of shifts in leadership among the big four LMS providers.

• Contrary to public positioning, we do not believe that Jim Milton retired as CEO of Anthology to play golf, and the new CEO Bruce Dahlgren is revamping the Anthology leadership team.

• Martin Dougiamas, the creator of Moodle, announced he was stepping aside as Moodle HQ’s CEO to be Head of Research while remaining Chairman of the Board. He will be succeeded as CEO by Scott Anderberg, who comes to Moodle from Pearson. Simply put, we believe these changes also go well beyond a personal choice and get into the need for a revamped strategy.

• Instructure has replaced or added five of its eleven top executives in just the past year, and we believe there is more to come in the next 12 months. Think impact more than numbers.

• D2L remains with the most consistent executive team, despite losing yet another marketing lead.

The fact that these changes are happening alongside external market forces changes (generative AI, the change in the cost of money, the growing importance of microcredentials, enrollment changes and the continued growth of online learning, to name a few) makes it more likely that we will see observable and significant shifts in approach by the big four players.

Parting thoughts

As we discussed in our recent podcast alongside Neil Mosley, the LMS market is a difficult one to understand because on one hand, it seems boring; yet on the other hand, it is increasingly important with improved products.

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