Imagine having purchased a new household product. Imagine relying on it more and more until it becomes a fixture and eventually your home can't be said to function at all without it. Imagine also that there have been no improvements to the base product, except at the margins and in ornament. Imagine finally that product cost soars, with no end in sight, while your total household budget declines. Would you have cause for alarm?
The California State University System and Delta Initiative, a consultancy group, recently concluded a landmark study of "The State of the Learning Management in Higher Education Systems". This is fine work and timely during these difficult economic times. The California State University System is to be commended for not only undertaking the study but sharing it with the world. (It will be worth your while to go through the admirable webinar discussion of the findings by Philip Hill, Molly Langstaff, and Kathy Fernandes.)
Let's start with the three basic trends identified in the study. We might classify these now as the "Known Knowns" regarding the enterprise LMS in higher education.
- Trend #1: The enterprise LMS market has settled around 5 products: Moodle, Sakai, Blackboard, Desire2Learn, and eCollege. The first two are open source and the remaining three are proprietary. Blackboard is the dominant firm and enjoys approximately 75% of the market share. Moodle, as the next competitor, recently attained double digits at 10%.
- Trend #2: There has been no innovation in the core LMS product since 2004. An academic Rip Van Winkle falling asleep in 2004 would not recognize any substantial difference between today's LMS and the LMS circa 2004. In Michael Feldstein's words, innovation in the LMS world has all but "flatlined" since 2004.
- Trend #3: LMS costs have increased dramatically and will continue to increase. According to Phil Hill, one of the authors of the Cal State U/Delta Initiative Study, "the amount of dollars charged to each institution has risen dramatically, in some cases up to an order of magnitude (emphasis mine) just in the past seven to eight years. And that's a trend that's continuing at this point." In the webinar Hill makes the further point that the business model for LMS vendors is brutally simple: they need to be "able to charge more per customer moving forward."