I was very surprised by this wording from an edtech venture capitalist in a recent Chronicle article.

My partners and I often fantasized about an end state in which professors would be free agents and education could become “unbundled” from the traditional campus setting and offered more freely as a consumer service, or commodity, by other providers.

This quote very clearly provides a glimpse into what some VCs seem to think about higher education – characterizing it as a commodity rather than a transformational experience. Universities should be concerned about this shift in thinking, particularly as they consider how to evolve in these rapidly-changing times.

One of the most tangible ways that I see this unbundling and commoditization playing out is in the MOOC space. MOOCs are a great way for private companies (or in the case of EdX, a centrally-controlled organization) to, given time, amass the single best courses for every subject and store/deliver them through centrally-controlled platforms. The MOOC platforms are at the nexus of how I believe content and software will begin to intertwine themselves as educational technologies mature. As more people teach on the MOOC platforms, the analytics they capture and the network effects they produce will, in a self-reinforcing manner, increase the value and quality of their content and as a side effect also increase each MOOC platform’s ability to control the distribution channel of educational materials.

Many institutions have signed away their individual rights to “only a course or two” under the guise of marketing or outreach – and in doing so enable MOOCs to be the back-door to collecting all the pieces necessary for the MOOC platforms themselves to one day deliver entire programs of study – should they want to. Once the MOOC platforms reach this point and control the distribution channel – as industry after industry finds out – universities will find themselves with decreasing leverage and few options but to yield control of their academic experience to someone else. It’s almost like some variant of the tragedy of the commons except in this case the individual behavior in one’s self-interest ends up being contrary to the whole group’s long-term best interests because they are contributing to rather than depleting common resources – these common resources being courses now under the control of the MOOC providers.

Content remains king in higher ed. After all what’s a course without content? (Aside, what’s an LMS without content? What’s a MOOC platform without content?) I often complain about the high cost of textbooks, but texts are only a fraction of the total cost of higher education. Institutions charge a significant premium on top of content costs for the “complete instructional experience.”

What exactly is the value proposition that enables universities to charge so much more? Publishers are now offering courses “in a box,” and companies like ed2go (actually a part of Cengage Learning) offer pre-packaged, pre-staffed, ready-to-deliver courses that many institutions count for actual credit. Maybe the value is in an institution’s ability to validate credentials or ensure student success, but even success apparently can no longer even be defined as having completed a course. Publishers, the MOOC providers, and other course content providers are now beginning their move up the value chain into territory previously occupied only by higher education institutions. This is the next edtech land grab that I believe is coming.

So What Can Universities Do?

Recognize that new technologies provide new opportunities

Be aware of not only the threats and challenges that new technologies bring but also envision the new possibilities and opportunities that they create. (MOOCs for example, even given their current limitations, are a powerful instructional innovation.) Then protect your institution the best that you can. Use openness to defuse lock-in or exclusivity. Thoroughly review the wording of contracts for words like “perpetual,” “irrevocable,” “worldwide,” and “royalty-free” – and understand their trade-offs and implications. Decide if your institution should join organizations focused on specific concerns around course content collaboration or help build the infrastructure and software platforms to enable it.

Seek to understand the changing dynamics of educational delivery

Seek to understand how your institution’s mission, vision, and operations really support the needs of today’s learners. Should your institution change or adapt to offer new programs of study or delivery structures? The students of today may be very different from the students that you served even 10 years ago. The technologies and strategies you used 10 years ago may be very different than what you need today.

Determine how your institution will differentiate itself

When one considers that whole online programs can be outsourced, admissions processes can be outsourced, financial aid processing can be outsourced, IT helpdesks can be outsourced, teaching of entire courses can be outsourced, student success systems can be outsourced, and even transcript requests can now be outsourced – what’s left of the institution itself? In the future how will your university compete and differentiate itself? On brand name? Reputation? Research or industry partnerships? Flexibility? Affordability? Student experience? Job placement metrics? Uniqueness of programs that are difficult to replicate? Newness of programs that address leading-edge skill needs? How will universities define both value and success in a way that attracts and retains learners – and positions them for success?

Or, lacking these answers or the gumption to address change head-on, is higher education simply destined to become just another commodity?

This post written by George Kroner