What's in Store for the $8 Billion LMS Market?

Market Trends

What's in Store for the $8 Billion LMS Market?

By Tony Wan     Sep 25, 2014

What's in Store for the $8 Billion LMS Market?

What do students and faculty want from their learning management systems? Apparently, not the bells, whistles and fancy features, since "relatively few use these systems to their full capacity."

That's according to a new study from EDUCAUSE, "The Current Ecosystem of Learning Management Systems in Higher Education." (PDF) Based on several surveys conducted over 2013-2014 encompassing over 10,000 students, 17,451 faculty members and nearly 800 institutions, the report captures their needs and wants for a market that is expected to approach $8 billion in 2018.

When it comes to "overall LMS satisfaction," there may be a disconnect between end users and decision-makers: "students and faculty self-report satisfaction rates that are much lower [60-65%] than the rates reported by IT leaders [over 85%]." In particular, "satisfaction ratings are highest for basic features such as curating content (faculty) and accessing content (students) and lowest for advanced features such as using the LMS in engaging and collaborative ways."


Over half (51%) of the undergraduates say "they could be more effective students...if they were better skilled at using the LMS." And 26% of faculty reported being dissatisfied with their training. Among upgrade requests, mobile functionality, better communication tools and a more user-friendly interface topped the list.

The report predicts that "nearly one in five institutions are preparing to replace their LMS system in the next three years." That must be music to the ears of upstart LMS companies. According to the latest research from George Kroner (a former Blackboard engineer) and his team at edutechnica, Blackboard, long the incumbent provider, is hemorrhaging market share. Among higher-ed institutions with more than 800 full-time enrollment, "market share of Blackboard Learn...drops significantly while Moodle and "Other" gain significantly."

Source: edutechnica

Phil Hill summarizes the most notable changes from Edutechnica's 2013 data. In particular, "Blackboard's BbLearn and ANGEL continue to lose market share in the US" while "Canvas is the faste[st] growing LMS and has taken over D2L [Desire2Learn]."

Market leaders don't give up the throne easily, though. Blackboard, under CEO Jay Bhatt, has committed itself to a "culture of innovation." Meanwhile, Desire2Learn recently raised another big round to add to its war chest, and Instructure is on the path towards an IPO.

May the LMS live in interesting times.

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