Innovation in LMS: Misreading the Market

Yesterday, we highlighted Khalil Yazdi's exploration of the challenges that higher education technology leaders are facing on their respective campuses with traditional LMS delivery models in place. In keeping with the effort to highlight excerpts from Yazdi's whitepaper, Innovation in LMS: Underlying Economic Drivers--Motivating a New Model for the Provisioning of Course, Teaching and Learning Management Software Systems, today, we're detailing Yazdi's analysis of LMS stakeholders' perception of other stakeholders.

In particular, Yazdi examines how LMS stakeholders (vendors and the institution's technology leaders, faculty and students) perceive one another, and how do these confused perceptions impact what is delivered by an LMS vendor, what capacity of LMS implemented by an institution and how satisfied are the LMS users? How can LMS stakeholders "read the market" better to better align expectations and what is delivered?

As we continue exploring Yazdi's arguments over the next few weeks, let us know how you think LMS delivery is evolving, and what you'd like to see from this wave of LMS innovation. Feel free to discuss in the comments below.

Innovation in LMS: Misreading the Market

For practical purposes, the current marketplace for LMS systems is a managed environment where market signaling as well as consumer and vendor behaviors are driven by incomplete and often inaccurate information. For the vast majority of market transactions leading to procurement, non-pedagogical institutional interests serve as a filter that effectively prevent faculty and student consumers from interacting directly with vendors as individual users. Aside from open product demos, the preferences and requirements of individual faculty and students are compiled by individuals (or groups) representing the collective interest of the institution. These same institutional representatives serve as the means by which vendor information is presented to users.

In combination, current practices in provisioning, pricing, licensing, selection, governance and product development mask the true scope and extent of consumer demand for innovative features and services and misrepresent the degree to which individuals within client institutions are indeed satisfied with current products. As a consequence, the “value-to-price” metric – “did I get my money’s worth?” – is perceived very differently by vendors and institutional faculty consumers. Vendors often perceive that faculty and students are very satisfied with their product when they are not. Users often perceive that the institution has paid for unused or unneeded features and capacity unnecessarily. It is not that institutional interests are unimportant – historically, adoption of “integrated” LMS solutions was necessitated by traditional technology architectures and support systems.

A typical vendor contract with an institution presumes full institutional commitment, despite the fact that typical usage may be well below 100 percent. Not all teaching faculty make use of the institutionally provided LMS for their courses and not all users take advantage of full product functionality. Licensing designs, general marketing practices and an overemphasis on realized sales data may lead to an overstated understanding of the demand for the legacy LMS architecture. Presuming that faculty and students like the product “as-is” weakens the business case for investment in new features and functionality or in a total redesign of product. Understated demand for new services or products because of the costs of upgrades and potential migration may also limit otherwise desirable innovation – “they really don’t want new stuff because they can’t afford to deploy it, so why invest in it?” For already available services alternatives, such as external hosting, the misrepresentation of low demand limits vendor commitments to marketing and provisioning. Underdeveloped supply conditions tend to drive pricing higher than it would be otherwise, resulting in a further obstacle to the adoption of such services.

As if to prove the point, faculty and students that are unhappy with solutions often self-select out of institutionally supported systems in favor of other cloud-based alternatives, typically on a one-off basis. Such individual forays reinforce the insight that current marketing and licensing models that are based on institution-wide adoption effectively distort the “true” demand for LMS services, features and functionality. At one level, there is nothing particularly wrong with individuals exploring the offerings available in the commercial cloud space and arriving at specific solutions to their specific technology needs. To that extent, individuals are attempting to acquire value-added solutions that can, in the narrow context of localized needs, be demonstrated to be optimal for both the individual and the institution. The lack of an effective marketplace for course, teaching and learning tools that could be purchased by individuals means that unique discipline and pedagogical needs are not fully supported through institutionally provisioned applications.

The difficulties with such strategies arise from the associated costs of fragmented processes and loss of data if there are no institutional mechanisms to manage or mitigate the consequences. In many cases, these one-off solutions occur with little or no prior awareness by institutional IT and ignore or circumvent institutional obligations, including identity and data management, security, FERPA concerns and other regulatory or mission-based requirements. When pursued, institutionally managed purchases of cloud-based services have worked exceptionally well, typically because such controlling management steps have been taken.

The adoption of support tools that completely bypass institutional support systems has the attractive feature that individual faculty are empowered by cloud-based tools to act independently and to represent their needs and expectations directly to vendors, such as Google and Microsoft, who have responded by enhancing services in support of faculty instructional use. Such endeavors do provide important insights into the nature of the challenges facing consumers and vendors in the LMS service space and point to potential new directions in the LMS market.

An alternative marketing strategy would be to also provide licensing directly to faculty and students that are the ultimate “consumers” of services. To do so would require distinguishing course management, teaching and learning tools in both licensing and provisioning – and ensuring that such separate and distinct systems are readily integrated. Unfortunately, other than generic, broad use services, such as those provided by Google, Microsoft and others, LMS providers have yet to develop offerings that are independently provisioned directly to faculty and student users based on their demand. While the tools available to users can be relatively robust, these solutions do not provide specialized support for teaching and learning, and because they are essentially “free” to the user, there is no developing “model” for pricing and marketing such offerings.

The challenge is how to establish a marketplace for services wherein faculty and student consumers are able to interact directly with vendors without undue costs and management overhead for institutions. While the sorts of solutions offered by Google and Microsoft function well for individual faculty and students, they typically do not provide ubiquitous accommodation for institutional needs. If institutional IT has not determined a strategic and tactical approach to enabling such use cases, then each instance where an individual institutional consumer pursues cloud services carries with it a rather significant implied cost of integration, security and IT management.

Without a technical architecture that specifically and deliberately enables such individual action within an institutional context, these individual efforts and one-off services will not serve as a solution to the larger institutional need to provide LMS solutions. Such technology requirements of institutional IT are not unreasonable or terribly onerous and result from specific choices regarding technology architecture and infrastructure deployment – choices that can be made differently. It is not just institutions that must embrace a transformative agenda; the LMS vendor community must also develop provisioning and marketing models that understand individual users in the context of their home institutions. While some of the challenges will be technical in nature, others will question long-standing policies, protocols and cultural practices.

Ultimately, vendors, institutions and faculty users must willingly accept and support interoperability standards for access, data and content.