Educators Don't Like Bullies, and Blackboard Was a Bully

 Blackology Goes Chapter 11

Back in the day I spilled a lot of ink writing about Blackboard, aka Blackborg, aka Blackbeard, aka BlackCT (after they bought the WebCT LMS), aka BlackAngel (after they bought the Angel LMS). After Anthology bought Blackboard back in 2021, it seems to me that Blackology is an apt moniker.

Full disclosure: I was a D2L customer for 9 years (2003-2012) and and a D2L employee for 13 years (2012-2025), now retired.

Anthology filed for Chapter 11 bankruptcy a couple weeks ago. Many good writers/thinkers have posted their thoughts in various forums. Here is a sampling:

• Phil Hill of OnEdTech: Anthology Declares Bankruptcy, Blackboard to Remain as the Core
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• Phil Hill of OnEdTech: Anthology's Chapter 11 Bankruptcy by the Numbers
• Justin Ménard of ListEdTech: Anthology’s Chapter 11 Filing: Breaking Up to Refocus
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• Al Essa on AI-Learn Insights: What Can We Learn From Anthology's Demise?
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• OnEdTech, guest post from Matthew Pittinsky, co-founder of Blackboard: The LMS at 30: From Course Management to Learning Management (At Last) This was published prior to the bankruptcy becoming public, but it seems important to me nonetheless.

Some of the thoughts gathered from those links above:

• Phil Hill: "Debt interest payments were 41% of total revenue."
  • "Anthology’s total revenue was approximately $530 million, representing roughly an 8% decline per year." over a period of three fiscal years.
  • "distressed-debt investors Nexus and Oaktree bought heavily into Anthology’s loans and effectively took over the process. From that point forward, this was no longer about whether Anthology could refinance or sell on favorable terms; it was about how those new creditors would maximize recovery."
  • "The core question isn’t “Will Blackboard survive bankruptcy?” It will."
• Justin Ménard: "Anthology’s path to this restructuring lies in its history of mergers and acquisitions. Over the past decade, the company rapidly expanded by buying multiple EdTech providers."
  • "At the same time, the acquisitions left Anthology with substantial debt. Servicing this debt limited flexibility and investment in product growth."
  • "That said, the bankruptcy filing and sale of assets introduce uncertainty into the marketplace. Institutions evaluating renewals or new contracts may weigh stability concerns when considering Blackboard against competitors."
• Al Essa: "Anthology’s model centered on selling interlocking cloud-based software to institutions on a subscription basis, supplemented by implementation and professional-service contracts."
  • "Its growth thesis was that colleges would prefer an all-in-one platform linking academic and administrative systems — a synergy that never materialized."

Then there's the guest post on OnEdTech by Matthew Pittinsky. He writes about the 30 year history of the LMS market. As one of the listed founders of Blackboard, he has inside knowledge about what was going on there during the days when they dominated the market and much of the time after that when their market share has dwindled substantially.

• About the future, Pittinsky says "the LMS will embrace AI as a sustaining technology, which is to say a 100x better way of doing course publishing and management." 
• So, is he prone to hyperbole, or can we actually expect a 100 times improvement in course publishing/management? 
• Looking backward, he argues that "shifts like SaaS and mobile did not fundamentally change the LMS." 
• I beg to differ, because from a user perspective those changes were huge. Ditto from an admin perspective, unless you actually liked to shut the LMS down for 48-72 hours to take on a much-delayed but always needed major version upgrade. 
• When speaking of Blackboard’s "voracious tendency to acquire competitors" he says that their motivation was "the belief that the LMS is a “winner-takes-most” category" and that higher ed institutions would standardize on a single platform (and you would need to be the owner of that platform). 
• So, he explains why they took this competitor acquisition approach, but he doesn't have much to say about how successful it was. Because it wasn't.

In this two-part series of blog posts, Pittinsky never addresses Blackboard's decline. I'm pretty sure that wasn't the point of his 30-year retrospective, but still it seems to me that it would be noteworthy. Sort of like writing about the rise and decline of email communications without ever talking about AOL.

Blackboard was a Bully

Pittinsky does mention the elephant in the room (competitor acquisitions), but fails to also see the woolly mammoth sitting over there in the corner. No mention about what I believe is the single best reason for Blackboard's steady decline from market leader to Chapter 11. In my opinion, their problems started over 20 years ago. Nobody likes a bully, and Blackboard was a bully.

One bullying example from personal experience

In 2003 was co-chair of the statewide committee for the Minnesota State Colleges and Universities that was tasked with running an RFP process to pick a single LMS to replace the five platforms that were in use within the system (WebCT, Blackboard, Educator, Anlon (yes, really), and a homegrown platform). We received the written responses and chose four finalists: WebCT, Angel, Educator, and Desire2Learn. Who's missing from that list? Blackboard of course.

Well, that just couldn't be possible, or so they (Bb) thought. They lobbied Minnesota state legislators and high-level employees at MnSCU (now Minn State) and tried to force their way into the final process which included a demo day (one for each) at St. Cloud State University in Spring 2003. Luckily, no one caved to the bully and Blackboard was out.

Buying competitors

Back in the day I talked to many WebCT customers who willingly chose WebCT over Blackboard, only to become Bb customers when Bb bought WebCT in 2005. Ditto for Angel customers just a few years later (2009). Those customers felt like the bully had kidnapped their preferred vendor. They didn't want to be Blackboard customers, and many started looking for the door once the bully took over.

Suing competitors

Almost all of Higher Ed was outraged at the B.S. lawsuit that Bb brought against Desire2Learn (now D2L). They bullied their way to a bogus patent by claiming an "invention" for which there was plenty of prior art. Then they tried to bully their competitor by wielding that bogus patent in order to gain a market advantage. That doesn't sit well with educators and other sane people. Educators don't like bullies.

If this lawsuit is news to you, then you've got some catching up to do. This was a big deal from 2006 to 2009 when they settled the suit somewhat amicably (to the frustration of many of us). Stephen Downes has a whole page of old posts about the lawsuit and the "patent" at Stephen's Web, and BTW, it's a great resource to see how hated Blackboard was by educators in all this mess. Lots of quotes.

How did the education industry reward Blackboard for their bully tactics? Let's take a look at Phil Hill's most recent version of his LMS diagram. I hope Phil doesn't take offense to my edits where I added a few Blackboard milestones to his octopus chart. I mean no harm, and again, I encourage you to SUBSCRIBE TO OnEdTech. Read Phil's post that includes this graphic.

The larger yellow star is where Blackborg bought WebCT. The smaller star is where they bought Angel. You can see the full timeline of Blackboard's acquisitions at ListEdTech.

Blackboard's Ride on the Stock Market

Blackboard issued its IPO in June 2004 with shares jumping 43% on the first day marking one of the strongest tech IPO launches of the year. Shares were priced at $14 (ticker BBBB). In 2007 the stock hit a trading high of $38.55.

Take a look at the green line in the diagram above. You'll notice that Blackboard's share of the market had already started to contract. Not dramatically so, but it had started. It had made a couple of acquisitions prior to the IPO, but the bulk of the meaningful ones were still in the future.

In July 2011, Blackboard announced that is was delisting from the stock exchange being acquired by a private equity firm for just under $45 per share., which was a 22% premium on its stock price at the time. The deal was finalized in October 2011.

Just a couple thoughts about their relatively short ride on the NASDAQ roller coaster:

• Lots of people got rich, but especially the founders (this isn't unusual).
• Take a look at the octopus chart and see the decline in market share while they were a public company, from the green line to the blue line. While the company was shedding customers, lots of people (depending on when they bought the stock) were doing just fine.
• Maybe even more instructive is to look what has happened between the blue line and the yellow line - when private equity held the cards. Was this continued decline because private equity was milking them dry (as tends to happen), or in spite of the private equity capitalization?
• One more set of lines to examine. Anthology was the owner from the yellow line to the black line of Chapter 11. Pretty sure this is not what they expected when they purchased Blackboard. But why wouldn't they expect this, hadn't they seen the decline in the LMS part of the business over the past 20 years? Did they think that the other products (SIS, etc.) were good enough to offset the "Honey I Shrunk our LMS Market Share" movie? They shouldn't have.
• And finally, I'm reminded of this post I made in March 2011, Chatting with John Baker about the future of D2L. A couple of lines from that post:
  • As I write this, Blackboard is in the top 5 for the largest short positions on the NASDAQ. 
  • Since Feb. 2010, the # of shares sold short has increased rather steadily from 7.67 million to the current level of 13.48 million, which represents 45% of the float in Blackboard. Ouch. You've gotta wonder what that feels like to have so many people betting against you.

A Few Random Thoughts

Okay, I'm getting tired of all this, and many visitors have stopped reading, so I'll just jot down a few last things for posterity:

• Can Blackology attract any new customers? Even though Chapter 11 is "supposed to" make them stronger as a company, it still sends up red flags to anyone considering their LMS for a new adoption, or even for a renewal. Take a look at their track record in the octopus chart and then add in an increased level of uncertainty.
• What role did low, low prices play in their trip to Chapter 11? Rumor has it that they were severely underpricing their initial contract offers in order to get new customers. I can't prove it, but I believe that's what happened when they got Centennial College to ditch D2L and go with the sinking pirate ship instead (obligatory Blackbeard reference).
• Chapter 11 sounds all great and stuff, ditch all your debt and keep all your customers? Yes, please! However, only about 10% of the companies that enter Chapter 11 successfully emerge on the other side with a vibrant company. Companies the size of Blackboard fare better than smaller companies in this process, but it's nowhere near a sure thing.
• One thing that doesn't get talked about (AFAIK) is the employee load prior to and after Chapter 11. As the business shrunk rather dramatically, did the number of employees also shrink. Will it now? I wish only the best to the employees who get caught up in this situation. Luckily, most of you will have skills that are easily transferrable within the EdTech space.

Lots of what has been written about the Chapter 11 filings point to recent issues at Anthology. IMO, you need to look much further back in their timeline. Their failures have been building for over 20 years. This didn't just happen.