For the 7th year, Client Stat is pleased to announce the findings of our analysis of institutional Learning Management System (LMS) usage in US higher education. As in the past, our methodology begins with the current list of institutions provided by the US Department of Education with more than 500 full time equivalent students and counts all LMSs in active, production use at an institution including pilot LMSs and co-production LMSs when used at a department-level scale or larger. Our QA process removes any LMS that is determined to be used by only a single professor, for a single course, or that only exists for sales or evaluation purposes.
Despite a slight blip earlier this year, Instructure has slowly regained momentum drawing from all other competing LMSs. Moodle and Sakai continue a slow, prolonged decline with the Sakai install base reaching its lowest point since we began tracking installations. Blackboard Learn losses accelerated slightly this year while the pace of D2L Brightspace losses slowed.
Instructure Definitively Claims Top Spot, Widens Lead by Enrollments
Instructure Canvas passed Blackboard Learn last year in terms of uniquely enrolled students. This year the gap between the two competitors increased from about 50,000 students last fall to over 1 million this fall. In addition, Canvas has become the clear, undisputed leader by number of institutions. Considering that most commercial LMSs are priced per unique student per year, this is a very notable accomplishment.
Blackboard SaaS Success Continues
Despite losing its top slot, Blackboard continues to make significant progress with its newest SaaS deployment model which is now used by roughly one-third of its customer base. Progress against this metric is an indication that Blackboard is improving its ability to provide support for a smaller spread of product versions and reduce operational complexity.
Twice a year for over half a decade, Edutechnica has published analysis based on a quality-controlled and thoroughly-vetted data set that captures all LMSs in use at a complete, defined population set of US higher education institutions. Because it is not a sampling or manual survey, it enables very rich comparisons of LMS usage from year to year and semester to semester. To review our methodology, we include only LMSs that are used to teach live courses at the department, program, or institutional level and remove any that are in use by a single professor, for a single course, or that have been created for sales demo purposes. We do include pilot LMS implementations only during the time period during which they are used to deliver live courses to students. We use a variety of automated and other methods to compile this data set and pull from sources that include public web sites, student newspapers, press releases, social media, and awarded contracts where RFP data is available. A team of subject matter experts validates any changes or anomalies in the data prior to each publication.
We are pleased to continue offering our analysis to the benefit of industry researchers, decision-makers, and other interested parties.
A product category in decline?
We recently heard from Instructure’s new CEO on an earnings call that “we see muted new bookings growth for the domestic Canvas market.” Similarly, Blackboard’s CEO was questioned in a recent interview about “a slowing market for LMSs in Higher Ed.” For the first time since we began collecting data, we have observed a net decline in the number of every type of LMS when compared semester over semester. The current total number of LMSs in use today is over 9% lower than a peak reached in spring of 2016. There are many factors contributing to these trends.
More universities are closing or merging
Hundreds of college campuses across the US have been closing in recent years. These institutions generally fall into three categories: small rural colleges that have experienced financial and enrollment struggles, large for-profit institutions that have lost accreditation (and therefore the ability to receive federal financial aid), and university systems that are consolidating or restructuring. While we start our analysis with the most recent data available from the US Department of Education, we continue to remove institutions from our data set as they cease operations to provide the most accurate and current representation of market share.
These closings are having a noticeable impact on US LMS market share. When Pearson chose to exit the LMS market in 2016, it provided an initial boom of new customers in 2017, mainly for D2L and Instructure. However, because Pearson’s LearningStudio product focused on meeting the needs of the subset of for-profit institutions that are now struggling, this temporary boom has become a bust. While there have been new installations of both D2L Brightspace and Instructure Canvas, each lost more institutions than gained when compared to last fall. Moodle has also been impacted by the closure of a growing number of smaller colleges which tend to use its LMS. This trend, however, is not the primary contributor to the continued decline of both Sakai and Blackboard Learn.
The market is consolidating onto fewer alternatives
The LMS industry is no stranger to mergers and acquisitions. Even since before Blackboard’s consequential acquisitions of WebCT in 2006, ANGEL in 2009, and Moodlerooms in 2012, it had previously acquired LMSs including Web Course in a Box from Virginia Commonwealth University and Prometheus from George Washington University among others. Even the original version of Blackboard’s own LMS (CourseInfo) was acquired from students at Cornell. Ellucian acquired Helix LMS in 2015. Pearson acquired eCollege in 2007. Fronter, an LMS popular in some European countries was also bought by Pearson in 2008 before being sold to itslearning in 2015. The Sakai foundation merged with JASIG to sustain itself as part of the new Apereo foundation in 2012. Creating (and more importantly, supporting) LMS software is expensive, and many organizations that try never gain the traction needed to sustain themselves.
Market conditions have led the industry towards a duopoly between Blackboard Learn and Instructure Canvas which together claim the majority of US market share. The tech industry is no stranger to dueling rivals – iOS and Android, Windows and MacOS, Google Apps and Office 365, Emacs and vi. The US higher education LMS market appears to be shaping up to look like the US mobile carrier market where Verizon and AT&T battle for the top spot, Sprint and T-Mobile still have room to succeed, and there are virtually no new entrants. In fact, our category of “Other LMSs” peaked in Fall of 2015 at 16.6% and has been in decline ever since.
Institutions are consolidating onto fewer LMSs
The previous trend sets us up for this third point. For a period of time, it was not uncommon for a single institution to run multiple LMSs at scale. In some cases, all distance/online programs were delivered through a different LMS to have more control over upgrade and downtime schedules that differed from the traditional resident student calendar. In other cases, a single college (such as a business school) would want to brand its LMS separately and independently from the one used by the rest of the institution and to have more administrative control over the system. In still other cases, a college or program such as a medical school or language department would use a different LMS to provide unique instructional or pedagogical capabilities not available in the institution’s primary LMS.
Because the remaining LMSs in the marketplace are increasingly similar (that is, though their user interfaces look different, they all exhibit a similar dominant design, offer reliable hosting capabilities, and provide ways to deliver differentiated instructional experiences in ways that do not require an entire, separate LMS), institutions that previously ran multiple LMSs are increasingly consolidating onto fewer.
Fewer institutions are piloting new LMSs
Our data shows that fewer institutions appear to be exploring LMS pilots in recent semesters and that a growing number of LMS pilots are not resulting in switches to other LMSs. Though the migration from Blackboard’s products to Instructure’s continues at a slower pace, Instructure appears to have picked off most of the easy wins from Blackboard’s customer base. In recent data sets, a growing proportion of new Canvas installations have actually come from Moodle, Sakai, or former Pearson LearningStudio institutions that were forced to migrate.
While other outlets have described the LMS market as being in a slowdown, we would describe it as a period of stabilization after many years of marketplace uncertainty and forced migration. Given this stability, this is an opportune moment for LMS vendors to focus on better service, tangential products/services, and deeper partnerships to further differentiate themselves. In 2016, we made the argument that consolidation of the LMS marketplace is not necessarily a bad thing, and we still believe that this is largely true primarily because LMS vendors will be able to invest more resources in their own products instead of battling the competition. Similarly, colleges and universities may have an opportunity given a period of stability to focus on getting more out of existing investments rather than focusing on negotiating new contracts and changing vendors.