EPISODE 31 – TOPIC SUMMARY AND GUEST:
The learning technology world moves so fast, it can be hard for practitioners to stay ahead of the curve. That’s why I invite innovation leaders to share updates in these 30-minute audio sprints. For example, today we welcome a leader in the open source learning community, Brian Carlson, Co-Founder and CEO of eThink Education. Join us as we discuss the latest developments in open source learning systems. You’ll also hear why these advances are important – especially for extended enterprise education.
- Open source learning systems are widely used. In fact, with a whopping 176 million users, Moodle is the world’s most popular learning platform – not just among educational institutions, but associations and corporations, as well.
- Open source learning platforms like Moodle have driven closed source LMS vendors to reduce their price points dramatically over the years.
- Professional services are a key differentiator for open source learning solution providers, particularly compared to proprietary LMS vendors.
Let’s start with a quick look at your background as a learning systems innovator…
I began my career as a teacher for two years on a small island just off the coast of Australia. It was a sustainable development position with an organization similar to the Peace Corps, and I loved it.
Then, after I returned to the States, I worked as a technical consultant for six years at a company which, through multiple acquisitions, became part of Ellucian, the largest student information system company in the world.
What prompted you to start eThink?
I’ve always been entrepreneurial in nature. And while I was at Ellucian, working with different colleges and universities, I saw open source as an interesting opportunity.
Moodle was just emerging as an open-source learning platform, and my business partner Cheryl Patsavos and I realized we could do very well by capitalizing on that. So about 12 years ago we founded eThink as a Moodle services provider.
So you started with LMS services for the education market?
Originally, Moodle focused on higher education and K-12 markets, so we began by supporting those clients. But because Moodle is based on open source, it quickly evolved to support nonprofit, government and corporate needs – including extended enterprise applications.
So we continued to expand our services to support a business-oriented derivative of Moodle called Totara. And our Totara services have been a tremendous success.
How do you describe eThink’s mission?
Ultimately, we empower organizations to maximize their learning initiatives through fully managed solutions.
In other words, whatever an organization wants to achieve – whether the use case is internal or external, and whatever the industry may be – we configure a solution that best meets the client’s objectives. This may come from any combination of products we offer, as well as partner solutions that work with ours.
So you’re kind of like a software company, but much more, because you’re software agnostic, right? Plus you provide all the support clients need?
Yes. That’s what makes us different. We’re not the only vendor that provides open source learning solutions. But we are 100% focused on services that meet our client needs. We have to be.
That’s how we keep our client base. It’s important to be pretty unique on the services side and deliver a lot of value.
Maybe we should take a quick step back. People may know of Moodle, but they may not understand open source, in general. Could you briefly explain the concept and what it means for learning systems?
Sure, John. On a day-to-day basis, we talk to many people who are confused by this because they aren’t immersed in technology.
Open source just means that the code base is freely available on the internet, and everyone can look at it line-by-line. Also, anyone can add to the code. This community involvement is how open source software improves over time.
Open source software is actually surprisingly common. Think of the smartphones we use. iPhones are based on Apple’s closed source mobile operating system, but Android-based phones are open source products.
Interestingly, when Apple launched the iPhone, it dominated the smartphone industry. But now only 10% of us are iPhone users, while 85% of us use Android phones. That illustrates how open source can shape a market.
Another great example of an open platform is WordPress. Almost everyone I know runs a website on WordPress. There are closed source blogging options, but they’re not nearly as popular.
We’re one of those WordPress users at Talented Learning, but I’ve never thought much about the open source angle. So for these open source initiatives, who creates the core code?
You know, there are books written on each open source movement. But with Moodle specifically, it started in Australia when Martin Dougiamas was working on his graduate thesis project in late 2001.
His university relied on Blackboard LMS, which was the predominant academic learning management system at the time. They had nearly 100% market share. It was absurd. Since Blackboard was the only game in town, the price points were very high.
So Martin decided to publish a free code base on the internet, similar to open source projects in other industries. This way, universities everywhere could apply their deep academic and technical talent to contribute various code elements.
With this public, community-driven approach, any educational institution can run a less expensive alternative to Blackboard LMS.
Actually, Blackboard prices have come down considerably over the years because of new competition from alternatives like Moodle.
And almost every open source story I’ve seen starts with this kind of question:
“What would it look like if we had more eyeballs and more community involved in product development and made it a free project?”
Then for every open source effort, there are logical next-step challenges like how to maintain the core code, and how to fund staff who can make sure that the best ideas are added and there’s some quality control.
Different business models have emerged to address these administrative issues. Yet they all start in a similar way.
But Moodle’s growth, in particular, has been fascinating. It quickly became the most widely used learning management system in the world – both in academia and in the corporate space. And it’s still the leading platform.
Most people don’t realize how popular Moodle is. But worldwide, no one else is even close. In global market share, it beats every other product by a mile – especially in certain categories.
Moodle adoption is so massive because people can easily download it for free and configure their own implementation. Or, if they need assistance, they can rely on services like ours.
On the corporate side, there’s a perception that Moodle isn’t really designed for the business market. Do you agree?
Definitely not. It’s true that Moodle was originally built for academia. And when Martin first started, he gained a lot of traction in colleges and universities. That’s where this perception comes from.
But today, if I look at our Moodle-related sales over the last two years, probably 75% of net new logos are from outside of academia. Many people find our business emphasis very surprising.
So, with such deep global market penetration, is there any direct open source competition?
Others have tried. You need to scale and you need enough contributing members for an open source effort to find its legs.
Moodle has been up and running for about 18 years, so it certainly reached the critical mass needed for success.
Over the years, a few other organizations have come and gone because they never received the amount of traction needed for a successful open source project.
They may have looked at the core Moodle code and decided to add some elements to create what’s called a fork of that code. That’s what Totara did. And no one else has done it as effectively.
Totara approached this with an eye toward extended enterprise professional development. And Totara has definitely found success.
Totara’s channel model is similar to Moodle’s. And in some cases, Totara’s offering competes with Moodle, which has led to improvement of both products. When one takes a step forward, the other tries to match or beat it, which is great for customers.
Isn’t Moodle creating its own corporate version?
You’re right. In response to Totara’s success, Moodle is creating its own corporate-focused version called Moodle Workplace.
We’ve been a big contributor to that for the last two years, while it was mostly in stealth mode. But recently, they made it public. And honestly, they’ve got some great new functionality – great UI and UX changes.
This move is important, because Moodle is already used by corporate, nonprofit and government entities for professional education. But they needed to address this more strategically by wrapping their story around it and including specific functionality to back it up.
Frankly, I think they’ve done a nice job. We can already see that Moodle Workplace is very competitive.
We have clients that look at all three options – Moodle, Moodle Workplace and Totara. Some say Totara is a better fit for their specific needs. Some choose Moodle and others go with Moodle Workplace.
We stay agnostic. We put the solutions in front of our clients, but we let them choose. We listen to their need set and mock-up what the functionality would look like in those scenarios. But Moodle Workplace is making things more interesting.
Today, nearly 1000 different learning systems are available. 99% of them are commercial off-the-shelf, SaaS or cloud-based systems. Why would I choose an open source LMS over those?
There are so many reasons why it makes sense to at least consider an open source solution as a finalist when selecting an LMS.
First, the business model is flipped on its head, compared to closed source solutions. We don’t own the product – the community does. In other words, a license doesn’t lock you into a specific vendor for software or service. This gives you much more control.
Another consideration is our flexibility in manipulating code and configuring it to meet specific needs. This flexibility really shines through with integrations.
These days, most organizations need to integrate all sorts of different things with their LMS. Upfront, you may not be aware of everything you’ll need. Instead, items surface down the road. And when they do, we’re here to help you adapt.
That certainly makes sense for extended enterprise scenarios, where integrations are especially important.
So let’s talk more about cost. Open source code is free, but once you add-in professional services, does the cost advantage hold up?
Core Moodle is a free solution. But we joke that it’s more like free like a puppy than a free beer.
Obviously, if you run this “free” solution on your own servers with your own people, there’s a cost. But if we do it for you, we believe we can do it at a lower price point.
But from a broader perspective, data from the last couple of decades shows that open source solutions like Moodle and Totara have actually forced LMS price points down as much as 90%.
It’s certainly in that ballpark for per-user-costs, compared to the early 2000s.
This has forced commoditization of closed source LMS solutions. But I tend not to lead on cost alone. That’s because proprietary LMS vendors aren’t our only competitors.
We compete with other open source solution providers, as well. And that competition incentivizes us to be incredibly proactive when it comes to service.
We’re highly consultative with our clients. And our responsiveness borders on obsession.
For instance, we respond to service tickets in less than an hour. Compare that with the average response time from other vendors, which can be closer to several days. That’s significant.
Although (like most vendors) you don’t want to lead with cost, I bet it makes a big difference at scale.
Yes, a massive difference.
Sure. Because it’s not uncommon for a small company to have a lot of customers.
Yep. Some of our client sites serve over 100,000 users. Several are approaching a million users. For them, it becomes extraordinarily inexpensive. But closed source learning platforms don’t seem to scale nearly as well when it comes to price.
So, what should associations or businesses know about customization? If they modify open source code, won’t that lead to complications in the future?
That’s precisely the basis for our business model, John. I can’t tell you how often prospects say, “We want to choose you because we can customize everything.” And we say, “Nope, you don’t want to customize.”
And then you show them a better way…
Yep. Nearly 100% of our solutions do not involve customization. Instead, we focus on configuration. Because when you customize core code, you’re adding a need to re-customize after future releases. That potentially adds costs and even some management risk. We don’t do that.
Good to know.
Moodle has over 1300 free modules available. So most of the time when someone says, “Can you do this?” it’s already been done. We can find it on the open source community. Or if it isn’t available, but the value is justified, we can develop a module.
For example, we just developed a Cvent plug-in in conjunction with our client, The Ohio State University. Rather than targeting students or faculty, it’s designed for professional certification training partnerships in the nonprofit sector.
This is a great example of a situation where you should create a module rather than owning it yourself. Hundreds of organizations are likely to find it useful. Our client saw the value in developing and sharing this module because they won’t have to maintain it. This approach essentially eliminates future cost-of-ownership for them.
That’s the open source model. It’s the power of community. More often than not, we can apply or enhance something that’s already available, rather than trying to develop it from scratch. This avoids future risk or cost.
Excellent. So, let’s say I’m shopping for an extended enterprise LMS. What are the top three reasons why I should consider open source…?
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