|John Baker, the 36-year-old founder and CEO of Desire2Learn, at the company’s offices in Kitchener, Ontario. Photo by Daniel Ehrenworth.
On a recent monday morning, the fourth-floor lobby of Desire2Learn Inc. is crowded with the newest crop of co-op students ready to start their work term. Located in Kitchener, Ontario, in a late 19th-century beige-brick building that once housed a tannery and maker of leather saddles, the company’s open-concept offices are lively with groups of young employees engaged in conversation. Free cafeterias are located throughout the building, and of course there are the ping pong and football tables now de rigueur at any high tech firm worth its salt.
Desire2Learn’s chief executive, John Baker, enters the boardroom, casually dressed in jeans, open-necked shirt and blue blazer. At 36, he looks not much older than the co-op students he employs. He was, in fact, about their age when he founded the company in 1999 while still a third-year systems-design engineering student at the University of Waterloo, just down the road from here. He had planned to go on to become a doctor or designer of biomedical devices.
But as he sat in his undergraduate classrooms, he found himself wondering why, given all the technological advances, students were still “scribbling down notes all day long,” just as they always had. The young engineering student asked his professors if he could help put some of their course content online, and a few took him up on the offer. The venture turned into a summer job, but when he hadn’t made enough money to cover his fourth-year expenses, he kept the company going.
Today Desire2Learn – or D2L as it is known – is one of the major players in the global market for learning management systems. These online learning platforms are widely used by colleges and universities to offer online or blended-learning courses as well as to enhance traditional face-to-face classes. LMS are used by faculty members to design courses and to post content online, and by students to access readings, write quizzes and submit assignments.
LMS have fundamentally changed what goes on in the classroom, says Stephen Downes, a senior researcher at the National Research Council of Canada, who specializes in online learning and new media. If a professor can post lecture notes and readings online, then classroom time can be devoted to problem-solving activities, question-and-answer periods and more participatory types of learning, giving rise to what’s come to be known as “the flipped classroom.”
By some estimates, the North American LMS market is valued at more than $1.5 billion. The market of LMS users has broadened as well, to include not only postsecondary institutions but also elementary and high schools, school boards, government agencies and corporations (the latter use the systems for professional training). But colleges and universities are still D2L’s bread and butter, accounting for about 60 percent of its business.
Mr. Baker says D2L controls between 12 and 15 percent of the university and college segment of the LMS market. In Canada, the figure is closer to 35 percent, he says. The lion’s share of the market is held by Washington, D.C.–based Blackboard Inc. and Moodle, a free, open-source LMS.
In the last year or so, D2L has been quickly gaining ground. It almost doubled its workforce to 670 employees and it deals with more than 700 clients worldwide. (As a privately owned company, D2L doesn’t disclose revenues and profits.) Last year it raised $80 million in venture capital to help fund its future growth. Its offices now span beyond North America to Europe, Brazil, Singapore and Australia.
So when D2L’s system crashed in late January – a problem caused while it was upgrading to a new data storage platform – it wreaked havoc at institutions across Canada and the U.S. and sent students flocking to their Twitter feeds to vent their frustrations. D2L said the outage affected about 25 percent of its clients and lasted up to 72 hours. “Learners and employees were frustrated and angry, and justly so,” Mr. Baker wrote in a contrite message on D2L’s website. “We have to work to rebuild your confidence in our systems. It is a goal which I believe we can achieve.”
The company currently boasts a client retention rate of 98 percent. But Phil Hill, a California-based educational technology consultant and market analyst, says the service disruption, D2L’s largest, could have a significant impact, given the reputation that the company has built for providing reliable customer service.
Still, D2L has seen darker days. In 2008 a jury in the U.S. District Court for the Eastern District of Texas ruled that D2L’s LMS infringed on Blackboard’s patent and awarded the U.S. firm more than $3 million in damages. D2L appealed the ruling and won, but Mr. Baker concedes the ordeal left the company badly bruised. It cost D2L millions of dollars in legal fees, and although the company managed to retain its existing customers, other prospective clients walked away. “It was certainly a fight for the life of our company,” Mr. Baker says.
But every cloud has its lining. D2L’s ultimate success established the company as a viable competitor to the leading LMS providers, says Mr. Hill, and helped fuel its subsequent growth. Clients were attracted by D2L’s flexible platform design that allows institutions to customize how they manage the system and its ease of use. While the North American LMS market is nearing saturation, D2L continues to grow by taking market share away from its rivals, expanding into overseas markets and introducing new products such as learning analytics software, says Mr. Hill.
These predictive technologies use student data captured by the LMS, such as assignment grades and test scores, to assess how a student is doing and to forecast future performance. D2L’s analytics program can accurately predict a student’s final mark, usually within the first two weeks of class, says Mr. Baker. The objective, he explains, is to flag early on those students who may be at risk, provide insight into why they are struggling and allow professors to put in place support strategies.
“Are they disengaged? Do they not have any friends? Are they too overwhelmed with other subjects? We want to provide the right insights to help them with the right interventions,” says Mr. Baker.
Learning analytics are also fueling a shift to tailor-made learning strategies that suit a student’s individual needs, he adds. “Because we can give you insight and understanding about how each student is doing, you can actually create different learning resources, different activities, different learning paths, and each student can be treated as an individual.”
To bolster its analytics offerings, in 2013 D2L acquired Degree Compass, a web-based application that helps students select courses and programs that are best suited to their academic strengths. It aims to improve student success rates and reduce degree-completion times.
Jeff McDowell, D2L’s vice-president of market development, says the system’s suggestions are “purely advice to students.” Degree Compass doesn’t replace the need for guidance counsellors or impede a student’s ability to choose electives based on interest. But if a business student wants to pursue some humanities courses and if he or she is successful with them, Degree Compass will take that into consideration. It works much like Netflix does for choosing movies, he explains, where viewers can opt to ignore the system’s suggestions and select from the general viewing catalogue. “The interesting thing is after I’ve done that, Netflix has learned that is something I enjoy so it takes that into consideration for future recommendations,” he says. “It’s an adaptive system that learns as time goes on.”
Degree Compass was developed by Tristan Denley, provost and vice-president for academic affairs at Tennessee’s Austin Peay State University. That university and three other postsecondary institutions in Tennessee are using it, and D2L plans to make it widely available soon.
Although still in their infancy, learning analytics hold great potential, says the NRC’s Mr. Downes. Most programs available today track “coarse measures” of student success like grades, how often a student logs on and off a system, and the number of posts a user makes to a discussion forum. However, “in the future, analytics will look at how people use words and how people describe concepts,” Mr. Downes predicts.
Not everyone is sold on the idea. “I think that [technology vendors] are overselling the transformation possibilities of these analytics pack-ages,” says Mr. Hill, the industry analyst. Partly, he believes, it’s the change-averse nature of the higher education system that will make institutions slow to adopt them. “The market is not ready to really transform even if the products are there,” says Mr. Hill, adding that student success is an area better addressed through services than technology.
Peter Wolf, director of the Centre for Open Learning and Educational Support at the University of Guelph, sees another challenge posed by predictive learning technologies, namely the protection of student privacy. “Having information is great,” he agrees. But institutions have to learn to use it “ethically and with integrity.”
U of Guelph was D2L’s first major institutional client and remains a strong supporter of the company. “They are not just a group of technology gurus who are designing fun-and-fancy tools. They are thinking about them pedagogically as well,” Mr. Wolf says. “Plus they’re Canadian.”
The university is about to undertake a pilot project to assess how its LMS can be used to gauge student learning outcomes. Recently, it piloted D2L’s e-portfolio, a sort of electronic co-curricular transcript that tracks a student’s work-term experiences, journal entries and extra-curricular activities. Students can show the e-portfolio to future employers.
D2L also sees new opportunities in the burgeoning market for free online courses. It recently collaborated with the NRC’s Mr. Downes, who created the software through which the first Massive Open Online Course was offered in Canada, to develop a new MOOC platform. D2L is now working with several U.S. institutions that want to offer MOOCs.
Mr. Hill believes 2013 will be a pivotal year for determining whether D2L and other LMS companies can break into the MOOC market. When the first large-scale MOOCs were introduced in the U.S. last year, none of the major providers like Coursera or Udacity used existing LMS platforms, opting instead to develop their own. “[MOOCs] can be a threat to LMS vendors or, if they are smart about it, they can actually be an opportunity for them to grow in a way that they weren’t planning on growing before,” Mr. Hill says.
Either way, D2L’s most loyal customers remain convinced the company has a bright future ahead of it. Liesel Knaack, director of the Centre for Innovation and Excellence in Learning at Vancouver Island University, oversaw the university’s recent transition to D2L from Moodle. Dr. Knaack has trained 150 faculty members on how to use D2L’s newest learning suite and was impressed with the results. She says the D2L course builder and instructional design wizard make designing a course very easy. Dr. Knaack also likes the commitment D2L has shown to education: “[John Baker] has grown a company that has listened to teachers and designed a product that meets their needs.” She attributes this in part to his background.
Born in Newfoundland and raised there and in Ontario, Mr. Baker comes from a long line of educators. Both his parents and his grandfather are teachers. In hindsight, “I think it had a big impact on me,” he says. “It was pretty easy for me to see how much of an impact education has when you see students running up to your parents, even after not seeing them for 10 or 20 years, to tell them how they were the best teacher they had ever had and how they had changed their lives.”
D2L wants to play just as large a role in changing people’s lives. “We’re just getting warmed up,” Mr. Baker declares. “I feel like we’re just getting started on the path of really making an impact on the transformation of the education experience.” If D2L is successful, Mr. Baker predicts that five years down the road institutions will have higher success and retention rates, students will be happier and more engaged, and fewer barriers will stand between low-income and other under-represented students and higher education.
Another big transformation that he sees coming is in how education supports the workforce. “Gone is the day of producing a student and not having to worry about that student again. I think we need to re-educate the workforce all the time and I think the relationship between institutions and the workforce is going to change pretty dramatically over the next few years.”
And, if Mr. Baker has his way, D2L will play a part in that too.
Rosanna Tamburri, a long-time contributor to University Affairs, was for 10 years an Ottawa-based staff reporter for the Wall Street Journal.