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Blackboard Speaks Out on Open Source Move

Blackboard's announcement that it had acquired Moodle service providers Moodlerooms and NetSpot to create a new business division focused on delivering open source services to educational customers may well be met with the same kind of astonishment Mac users showed in 1997 when Steve Jobs announced that Microsoft was investing $150 million in Apple. When long-time competitors are suddenly on the same team, you can't help but ask, what's going to happen to the game?

In this interview Blackboard Learn President Ray Henderson and Moodlerooms Chairman and CEO Lou Pugliese explain why Blackboard is getting into the open source business, what's different about delivering services to those customers versus Blackboard's traditional customers, and what might be next on the open source agenda for the No. 1 learning management system company in the world.

Dian Schaffhauser: This is big news. What was the genesis of all of this? How long has it been on your radar?

Ray Henderson: Thinking about the possibility of supporting an open source platform or multiple platforms has actually been something in the strategy context that we've thought about for years. Over the past few years we've significantly added to our portfolio, both in the number of products we support and also, importantly, in the services realm. As we've seen this dramatic growth in open source around the world, we knew that it represented a very significant opportunity for us to introduce our own open source services business. So it's been on the radar for years.

More specifically, the conversations with these parties started just over the last few months.

Schaffhauser: Ray, according to your blog entry, a group of you made a trip to Australia to meet the founder and lead developers of Moodle. What kind of welcome did those guys give you? Was it like a scene from Star Wars where Darth Vader tries to woo the Rebel Alliance, or was it a little friendlier?

Henderson: I should clarify. Lou and I along with the CEO of NetSpot and [Blackboard President and CEO] Michael Chasen made a trip. We met only with Martin Dougiamas, who is the lead developer and the founder [of Moodle].

It's fair to say, for all parties involved, it was a bit surreal. We'd been on opposite sides of the table before. We discussed the rationale for this and our commitment to building a services organization, ultimately with the goal of strengthening this community by a long term contribution to it and helping grow it. I think once that was well understood, while unconventional, we were given a, "Hey, provided you play by the rules of the community and that you contribute and help us grow share, and that you contribute also by your participation in our events, etc. and continue to contribute to the source code that these teams we've acquired have now made, then you'd be welcomed."

I'll hasten to say, that was exactly what we'd hoped to do. We knew that culturally this would be quite different from anything we'd done before. So we made sure we allied ourselves with people who were great ambassadors and known entities to the Moodle organization in particular. We were able to make sure we didn't put a foot wrong in that first overture.

Schaffhauser: You use that word "surreal." Lou, this is a return to Blackboard for you. That must be a bit surreal. [Up until the end of 2001, Pugliese was the founding CEO of Blackboard.]

Lou Pugliese: It's very surreal. Obviously, Blackboard is a in a very different world now, being very much larger. I went through some of the same painstaking efforts here [at Moodlerooms] in getting the company to its current state and growing and serving more customers. Now we get to do that all over again, only with a different home.

Schaffhauser: The company is announcing Education Open Source Services. So the acquisitions of Moodlerooms and NetSpot are done deals?

Henderson: Yes.

Schaffhauser: How many people are being added to Blackboard as a result of these deals?

Henderson: I would say about 700 additional clients are joining. In terms of employee count, I would say it's around 140.

Schaffhauser: On the NetSpot buyout, is that the company that the Moodle folks refer potential service customers to in Asia-Pacific?

Pugliese: They cover the Asia Pac area. A majority of their business is in Australia, working with large institutions that typically run a fairly remote operation, which is typical for Australia in terms of the geographic constraints of face-to-face learning. They have carved out a unique niche. But most of what they do is host Moodle.

Whereas on our end, we've taken a different approach, where we've wrapped a series of assets around Moodle itself, to enhance the platform and create new learning applications around it. We also host in the Dell Cloud.

So there are certainly some good synergies that will occur between the two companies--and a lot of like-minded developers who know Moodle very well. The ability to create new applications and get them to the market more efficiently and quickly will result as a result of our tie to NetSpot.

Schaffhauser: It sounded to me from the announcement that those two companies were going to remain as separate entities. But from what you're saying, it sounds as if they will be working together.

Pugliese: Absolutely. They've got great staff. I've known Allan Christie, their [managing director] for a while. I've known their marketing and development people. But this is very true for the Moodle collaborative open source community. People know each other. Developers know each other. This is not an organization that has a foreign piece of software. When you're in the Moodle culture, you know the software, and the ability to get up to speed and work collaboratively is very, very quick.

Schaffhauser: How will the various teams get integrated into the workstreams at Blackboard? The press releases say the companies will be separate entities. But what does that mean? Are they subsidiaries, divisions, or something else?

Henderson: They'll just be divisions of Blackboard Inc. But rather than just being blended into a pool of developers that just generically makes learning platforms, we've got separate and distinct cultures and teams. The teams that successfully built the businesses will continue to operate independently with their own leadership.

The point of union across the Learn team and the Moodle team and the Sakai work that we'll be doing, as well as the Angel work, will be me. That's reflected in the change in my title today. Rather than president of Learn, I'm now president of Academic platforms.

We'll continue to operate with the same brands, the same names, and the same product descriptors for the foreseeable future.

Schaffhauser: Can you talk about what's inherently different about delivering open source services versus standard Blackboard services?

Henderson: Philosophically, I don't know that there are dramatic differences. One thing about the relationship we have with clients and the deals we would have here [through Moodlerooms and NetSpot], they may not pay a license fee for the product, but they're still seeking the same sort of services that the Blackboard community is seeking--that is, someone to host an LMS, possibly to modify or customize an LMS, to provide end user help desk services around that LMS, or to do other things in the realm of strategic services--design learning programs around it or integrate a third party piece of software. I actually think there's a lot that's in common.

One of the drivers for us, as I mentioned, is that the services element has been a very rapidly growing part of our portfolio, particularly as our client satisfaction in that area has moved northward quite nicely for us over the last three years. We're experiencing very strong growth there. And that's exactly what both NetSpot and Moodlerooms bring to the party here.

Pugliese: [Moodle] is a very unique platform. It's open source. And you have to build a unique team around that. That's not just from a development perspective, but there is a skill set in the development and implementation of this that requires some expertise and some track record and some degree of staffing in the Moodle area. We're a little bit unique in that we're in a cloud environment. There's not a whole lot of onsite work. But in terms of the configuration and the integration of a Moodle enterprise stack and our version of that, called Joule, it's very different than a premise-based and to some degree proprietary solution. So we've built a lot of administrative as well as academic tools around the Moodle stack that require a unique type of implementation methodology.

Schaffhauser: The statement of principles [for the Blackboard Education Open Source Services] is interesting. What inspired creation of that?

Henderson: I think the driver for us there in general was our comportment toward this new community. I think there are many within the open source Moodle and Sakai [communities] that have some concerns about corporate behavior and what that might mean as we enter this. So it was important for us to acknowledge that. We are committed to the same type of conduct as the companies we have acquired as well as the individual who is joining us--Chuck Severance--and that includes how they've built their reputations for contribution to the community of source code and financial contributions.

There may be many who are concerned that our ultimate interest is in somehow using this as a feint to drive the sales of our commercial platform. We wanted to be crystal clear--all of us as individuals, to put our reputations on the line--that we would be trying to conduct ourselves in a way very consistent with what grew these two fine companies.

Schaffhauser: You mentioned Charles Severance. [Severance is considered by some to be the "father" of Sakai, another open source learning management system.] It's an interesting move there. What is his role going to be, and what will Sakai initiatives consist of at Blackboard?

Henderson: For right now, we aren't giving full details, not because we're failing to disclose them, but because they are in fact something we are under discussion around. We thought it was consistent that if we supported open source, that we would do so around the two leading platforms that are in the market. In the case of Moodle, which is by far the largest, we had a well articulated strategy, and so we've laid it out.

In the case of Sakai, it's still an area of discovery for us. But we wanted to start by getting a cultural ambassador, someone well known to that community who could be our guide, and also someone who understood enough about the technology to help us assemble our technology team as we plan our investment and our future offerings.

So I'd say that's going to [take] a period of months. Expect to hear more at the Blackboard BbWorld event that we kick off in the second week of July about what our plans will be around Sakai.

Schaffhauser: Could there be another acquisition in the works, such as rSmart?

Henderson: I wouldn't be able to comment about anything like that.

Schaffhauser: So now that Darth Vader has won over the Rebel Alliance, what's next?

Henderson: We're hoping to make any metaphor about what role we play more difficult--or at least require you to come up with something more interesting--the Borg or the Enterprise....

Pugliese: Maybe we can say that we're now positioned to be the Obi Wan Kenobi of the education industry.

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