Is Blackboard for Sale?

This week Blackboard, the LMS/CMS used by A.T. Still University, announced the company had retained  investment banking firm, Barclays Capital, as an advisor regarding an unsolicited proposal to purchase the company.  So does this mean that Blackboard is for sale?  Absolutely, it does.

To be fair, businesses are always for sale, but the receipt of an unsolicited bid puts the company "in-play" and sets some structure around the timing and pricing of any possible sale.  The fact that a purchase offer has been made is evidence that some outside party believes they can manage the assets of the company to provide more value (i.e. they can make more money) than the existing management is currently providing.  The consequences of this scenario are difficult to avoid, because an unsolicited offer changes not only the company, but also the company's industry.  Rarely can companies go back to business as usual after this type of development.  I suspect there will either be a change of ownership within 6 months, or the company will begin a slow and long downward spiral.

As a Blackboard customer, ATSU has first hand experience of the pain associated with the company's growth.  Our history includes a very difficult transition from WebCT after Blackboard acquired the company in 2005.  As the two companies merged, there was a great deal of product confusion and precious little product support.  Frustration was high.  That said, Blackboard was able, over time, to execute on their vision of integrating the Blackboard and WebCT LMS/CMS products.  The current version of the Blackboard Learn Platform includes many of (but not all) the best features from both products.  I would say that it is now a mature product.

But that may just be the problem.  Blackboard matured during a period when the education "business" was able to spend a lot of money on the promise of new technology.  Its business model depends on the revenue generated from sales of license rights and annual maintenance for the software.  The mature nature of the Blackboard product and its related business model may make it difficult for the company to compete with open source projects and cloud based software initiatives which many students and faculty increasingly see as more intuitive, responsive, and cutting edge.  To continue to grow and to be relevant, Blackboard needs ownership that constantly delivers new functionality in a way that customers can instantly experiment with, at no cost, and with no negative impact to existing features.  While Blackboard has shown signs of recognizing this need, so far they continue to expand and sell software features via a traditional platform model.

Perhaps new ownership (or simply the threat thereof) will be exactly what the company needs.