Pearson Launches Free LMS
Date posted: November 8, 2011
In a strategic move that echoes Google’s “Analytics” platform strategy, Pearson – an education, technology, and services company – will be offering a learning management system (LMS) to schools called “Openclass” free, as a way to encourage purchases of their other products. Like all LMSs, Openclass is designed to help colleges manage activities related to on-line courses. For example, the tool allows schools to manage courses, virtual campuses, and reports. Typically, this kind of software is very costly… a fact that makes Pearson’s decision to offer it completely free (no licensing or maintenance costs) all the more groundbreaking.
The company is attempting a “loss leader” strategy similar to Google’s Analytics strategy. In the search giant’s case, Analytics is a way to drive Adwords adoption. In the case of Pearson, the company is hoping that Openclass will drive “mindshare” and help increase digital content sales of its products, such as e-textbooks and e-tutoring software. The bold move is an attempt to increase the company’s share of the LMS market from it’s current size of only 1%.
Pearson’s strategy has broad implications for school marketers. If LMSs suddenly become free, precious budget dollars would be freed up for other marketing activities. For example, a school that suddenly finds it self saving thousands of dollars a year in it’s online learning course budget could shift that investment to PPC campaigns that could send traffic to a page on it’s website promoting its on-line course content.
Of course, there are still many questions to be answered. Firstly, will Pearson’s strategy work, and allow it to capture market share? If it does work, and the company – or another company adopting the same strategy – suddenly finds itself in a dominant position, will schools find it harder to differentiate their on-line courses in a single-LMS world where everything “looks the same”? What are the answers? As the adage goes, only time will tell.
What are your thoughts on Pearson’s strategy? Feel free to comment below.