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The bosses of universities are increasingly hard to distinguish from the hard-headed managers of the corporate world.

Acutely aware of the competition, they employ professional investors to manage their endownments, bid aggressively for the best professors and make every effort to publicise their student facilities.

It is not surprising, therefore, that leading universities have been increasingly keen to improve their productivity by using the internet.

Among the most successful companies set up to help them do so is Blackboard, a Washington-based business providing software that enables universities to create an on-line dimension to their courses.

A rare survivor of the dot.com bubble, Blackboard - which has a partnership with Pearson, owner of the Financial Times - allows college professors to put reading material and lecture notes on-line and to respond to student questions.

On the Blackboard system, students can register for courses from their computer, take tests and hand in homework on-line, set up discussion groups with their classmates and professor and watch videos.

Michael Chasen, chief executive and co-founder, says universities are increasingly thinking like business analysts. “Universities are looking at IT from a return-on-investment perspective,” he says. “With many schools struggling to keep pace with rising enrolment, adding an on-line element enables teachers to be more efficient with their time.”

Teachers no longer have to make 100 print-outs of course material, but can put it on-line instead. Rather than having 10 students knocking separately on their door to ask the same question, they can often answer one person’s question on-line and all their classmates will be able to see the response. Students who are too shy to ask questions in a crowded class should be less inhibited on the internet and will be at less risk of being left behind.

There is also growing pressure from a new generation of technology-savvy students to offer such services. “In such a competitive environment, schools realise that if their rivals have this technology, they can’t be left behind,” says Mr Chasen.

With university tuition fees rising in many parts of the world, an increasing number of students also having to work to support themselves, the flexibility of an on-line learning tool is all the more important.

From a standing start in 1997, Blackboard provides software to more than 2,200 academic institutions, including six of the US’s seven ivy league schools.

The company reported its first post-tax profit of $9m last year and, with sales rising fast, expects post-tax profits of between $20.5 and $21.5m this year. It has been expanding in Asia and now provides software to 40 institutions in China.

After an explosive 43 per cent rise on its first day on the Nasdaq in June last year, the company’s stock has settled down to between 15 and 20 per cent above its listing price of $14. The $53m raised by the public offering will help fund expansion.

There company is also hoping to sell more to existing clients - the vast majority of whom use only one of the company’s five products.

The company has a strong market position, but faces competition on two fronts.

One threat comes from the Sakai Project, led by Stanford University, MIT and the Universities of Michigan and Indiana. This offers the prospect of free software to thrifty academic institutions.

The $6.8m project has launched the first version of its offering. Although it does not provide technical support, many large universities have a large enough IT staff to maintain the system.

One the other side is a range of commercial competitors, including WebCT, eCollege.com, Desire2Learn, SunGard Data Systems, Diebold and CNord Group.

Mr Chasen says Blackboard has never lost a customer to free software. Demetra Katsifli, head of information and communication technology at Kingston University in the UK and a Blackboard client, says free software would have been a false economy.

She says: “We needed a system that was easy to use for both students and teachers, easy to scale up and add features to and that had good support. Blackboard met all these requirements. It was so easy that students hardly needed training. A two-hour tutorial was more than enough.

The Blackboard technology platform, costs from as little as $9,500 a year to several hundred thousand dollars a year, depending on size of institiution and the level of service.

Copyright The Financial Times Limited 2017. All rights reserved.
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