Blackboard May Double or Triple Spending on Software Development

Jay Bhatt, president and chief executive of Blackboard. (Courtesy of Blackboard Inc.)

Las Vegas — Blackboard Inc. is changing, with plans to focus more on innovation than on simply fighting for market share, says the company’s new president and chief executive, Jay Bhatt, who took office just seven and a half months ago.

In the past 16 years Blackboard has grown into one of the largest education-technology companies, and in 2011 it came under new ownership, after being purchased for $1.64-billion by an investor group led by Providence Equity Partners. In recent years the company has also faced new competitors and new questions about how technology fits into learning.

Mr. Bhatt is new to the education-technology sector, having last led Progress Software, which sells back-end software for businesses. Before that, he was a senior vice president at Autodesk Inc., which sells 3D-design software. He sat down with The Chronicle this week during the company’s annual conference here, for what was his first extensive news-media interview as Blackboard’s leader. (The interview was condensed and edited for space.)

Q. As you take on this new role, I’m sure you’re thinking about the big topics in education technology and about how Blackboard fits into those trends.

A. Yes, it’s a big topic. … When I got to Blackboard—it was a little surprising to some—I didn’t pore through financial statements and look at organizational changes and all that stuff. What I really did for the first three months was I engaged with the smartest educational thinkers in the company, but also outside the company, to say, Where is this industry going, just generally? What happens to learning and teaching in the next 10 years? How does it change? By the way, the answer we came to may not be completely right.

Q. Can you boil it down? What did you conclude?

A. There are six big trends that I’m going to talk about that are influencing things. They’re terms of the day; they’re not going to be new to you. Things like going online, personalization of education, and consumerization, what does it mean, talking about the globalization of education. …

Then we looked and said, If that’s the macro landscape that we believe is going to happen, where does Blackboard fit in? What are we? Let’s define our DNA and our core. …

At the end of the day, we’re a product company, and we should embrace the fact that we are a great product company. But we’re also very much a teaching and learning company. So we need to double down on our core. We need to make teaching and learning the core focus of our development, and not just the way it manifests today but the way it’s going to manifest in eight years.

As a technology provider I think the industry wants us to step up, and they want us to not just provide tools that will work for today’s students, who are using mobile devices more than ever before, but I think the industry wants us to innovate, so that’s a big, big, big driver for me. …

We’re going to accelerate product development. We’re going to integrate our products aggressively. Our customers—one of the things they’ll tell you is, Please talk to us like one company, not multiple, siloed divisions of a company.

The third thing we need to do is we need to take the handcuffs off the innovation. There are so many interesting ideas inside the four walls of Blackboard, and we need to unleash that.

Q. One of the announcements you made this week is a new MOOC platform. Can you talk more about that?

A. There’s a transition from classic traditional learning with small class sizes all the way through full online. MOOC is just a component of that. Fortunately the press has picked up on that and played it out really well, and so there’s a lot of attention given to the movement of online education through the lens of a MOOC. I think the bigger story is what is the continuum of movement to online education, and how does technology facilitate that transition? Yes, it’s about supporting massive open online courses. But it’s also about supporting programs online, or complete institutions as they move online, or distance education on a global scale. I think MOOC will evolve. I think technology vendors need to think not about an acronym but about a transition from traditional to online.

Q. So it’s not just about MOOCs?

A. Higher education as an industry is behind the times. There are other industries that are much more aggressive in their implementation of technology. And I think education is starting to do that. We’re sitting on the edge of a chasm right now in education. It’s all about to change. Because there are economic and expectation realities that aren’t matched by the current education system. And there are technologies that can provide that that haven’t been leveraged and harnessed yet. And I think our job at Blackboard is to do that. …

Because we’re a $700-million company. We generate a lot of cash flow. We have a lot of customers. We have the scale. There aren’t that many scaled technology vendors in this industry that are thinking about the future.

Q. It feels like Blackboard has new competition these days. There are players like Coursera, potentially, and Pearson, which calls itself a software company instead of just a traditional textbook publisher. And it could be anybody, even Google, that could offer a suite of services that could facilitate teaching and learning. Do you see it that way?

A. I hope so. I really do hope so. I say that with all the understanding that that puts pressure on our business. But I don’t know. It’s not clear what those companies you mentioned really want to be or are. And I can’t worry much about that. What I’ve got to worry about is what our customers are going to need in 2020.

If it’s a good competitive landscape, it could drive good behavior. I find it’s driving bad behavior in our industry. I think historic competitors are not taking the right path. We’re supposed to be leading along a vector for education. We’re not going to invent the next paradigm for teaching and learning, but we’re going to facilitate that through technology platforms. Historically I haven’t seen that happen.

I don’t think it’s about fighting with each other about claiming how much your software is worse than my software. It’s about solving the problems that exist in the industry in an innovative way. … I think competitors have to start cooperating.

Q. How can you get that to happen? You can’t do that by yourself.

A. A lot of it is incumbent on the customer. What drives vendors to work together is the customer. … So if I am a major institution and I have implemented software from a vendor and I have implemented other software from another vendor, you can demand that that software integrate. And vendors can say no, but it’s at the risk of losing the customer.

Q. Blackboard has a history of buying companies at a routine clip. Do you expect that to continue?

A. It’s an incredibly healthy way to do things. In software you cannot have the corner on innovation in the four walls of your company. You have to be able to innovate and be able to build that organic muscle, but lots of that creativity is happening outside of the walls of your company. And in order for some of those innovations to scale, they have to be brought into an infrastructure like Blackboard, that is developed and can go to market and has an established sales organization, and spend the money on branding the thing. So you can expect us to buy things, for sure. We will be a buyer. How we integrate those acquisitions and the types of things we acquire will be different. …

What I think Blackboard did historically is let competitors get to a certain scale and say, I want to buy them so I can limit the competitive environment. That’s not my acquisitions philosophy.

Q. You mentioned doubling down on your core products. Looking at the landscape, are you concerned about competitors like Instructure or others getting big clients and often taking them away from Blackboard?

A. As a business, you always worry about your competitors. But what I’ve found at Blackboard, honestly, is we have great products. Blackboard Learn is a really great product. And it has improved massively in the last couple of years. Imagine where that might go if I doubled or tripled the investment in development. Just imagine.

Q. Is that the plan?

A. Yes. Significant increase in investment and development on the Blackboard Learn product.