Blackboard to Sell Open LMS Product (Formerly Moodlerooms) for $31.7...

Mergers and Acquisitions

Blackboard to Sell Open LMS Product (Formerly Moodlerooms) for $31.7 Million

By Wade Tyler Millward     Mar 10, 2020

Blackboard to Sell Open LMS Product (Formerly Moodlerooms) for $31.7 Million

Blackboard, a Reston, Va.-based provider of learning management software for K-12, higher ed, government and businesses, has agreed to sell its Open LMS business to Learning Technologies Group, or LTG, a London-based conglomerate of workplace learning software services.

LTG will pay $31.7 million for all intellectual property and assets related to the Open LMS, formerly called Moodlerooms and currently considered the largest commercial Moodle provider worldwide, according to a statement Tuesday. The deal is expected to close during the second quarter.

As part of the deal, LTG will resell Blackboard products integrated with Open LMS. LTG bought the company to grow its presence in the market of LMS software built off Moodle, launched in 2002 as a grassroots, open-source and more affordable option to Blackboard. LTG also sees opportunities to cross-sell its products with Open LMS. Existing Open LMS clients can still access Blackboard products already integrated with Open LMS.

According to a statement Tuesday, Blackboard made the sale to “simplify its business and accelerate momentum in helping clients move to its” core LMS offerings, Learn LMS and the upgraded Learn Ultra LMS. The company has 733 clients on Learn and 259 clients on Learn Ultra, and claims to serve 100 million users worldwide. LTG will maintain the existing Blackboard student data privacy policy.

Blackboard promo video of updates to its Open LMS product

LTG Eyes Moodle Companies

Blackboard chief learning and innovation officer Phillip Miller will join LTG to lead the Open LMS business. Moodle today has 100,000 registered sites, Miller said in a blog post, used at universities, technical colleges, nonprofits and corporate training organizations. Most Moodle products are hosted locally.

LTG, founded in 2013 and publicly traded on the London stock exchange, already has products that interact with Moodle, including content builder LEO Learning. “At its core, this is just a continuation of bringing together some of the disparate global Moodle talent under the same umbrella to expand Moodle’s reach and growth,” Miller said.

In a blog post, Blackboard CEO Bill Ballhaus said LTG approached Blackboard months ago with a purchase proposal. “By selling our Open LMS business, both companies will be hyper-focused on fully serving their respective clients and making a difference in the lives of the students,” he said.

Unlike Blackboard, which aims to serve a variety of learning markets, LTG is more focused on the corporate education market. Last year, LTG bought Breezy HR, which offers recruitment software to small-to-medium-sized businesses.

LTG Chief Innovation and Product Officer Tim Martin wrote online that LTG made the purchase despite owning other learning management products because it lacked a product as customizable as Open LMS. Some organizations are mandated to buy open source software instead of software that requires a license.

Martin teases at more acquisitions to come. “We believe that consolidating some of the Moodle providers from around the world will allow us to operate more efficiently and more effectively leverage every bit of energy we put into Moodle itself and the products and services we arrange around it,” he said. “We’re excited to do more.”

In its latest annual report, LTG claimed year-end revenue of 93.9 million pounds (about $121 million), an increase of 83 percent over 2017. It reported a profit of 4.2 million pounds (about $5 million), an increase of about four times over the previous year.

LTG CEO Jonathan Satchell explains his company’s performance for 2019’s first half.

Difficult History

Blackboard’s sale of Open LMS is the latest chapter in its long, difficult relationship with the open source market. Founded in 1997, Blackboard itself became a “Moodle partner” about 15 years later. That partnership came through the purchase of two LMS companies built off the Moodle platform, according to Inside Higher Ed. As partners, those companies paid Moodle 10 percent of fee revenues from Moodle-related fees. Those companies were Baltimore-based Moodlerooms and NetSpot, an Australian counterpart.

At the time, open-sourced and Moodle-based products were viewed as major competition for Blackboard, which saw its LMS market share fall while open-source products grew to serve more than a quarter of nonprofit colleges, Inside Higher Ed reports.

Education analyst Phil Hill wrote in a blog post that $31 million is above Moodlerooms’ revenue at the time of Blackboard and Moodle ending their partnership in 2018. Today, Instructure’s Canvas is considered the market leader among higher ed LMS companies in North America, followed by Blackboard.

Moodle is a major player in worldwide use, which could send ripple effects to the LMS market outside North America, Hill said.

Moodle founder and CEO Martin Dougiamas responded to the Open LMS sale on Twitter, saying that Blackboard “never supported Moodle well, don't answer calls, never contribute to community efforts, they just exploit our code and try to convert folks.”

Moodle CEO Martin Dougiamas explains Moodle in this promo video
    

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