Zovio and Arizona Global: Is There a Less Obvious Trend Here?

Inside Higher Ed’s Doug Lederman published an excellent early take on Arizona Global acquiring Zovio. For those who have not been following along, this is an example of the kind of “pivoting”—more like “twisting in the wind”—that’s evolved out of the for-profit university space. Here’s the gist:

• Way back in 2005, the non-profit University of the Prairies sold itself and its accreditation status to the for-profit company that eventually would be rebranded as “Zovio.”
• That company got slammed for predatory recruitment practices and squeezed by the legislation that was triggered by such practices in the for-profit university sector.
• In response, Zovio’s “Ashford University” converted back to a non-profit online college but used Zovio effectively as the OPM that provided the services.
• That didn’t work either. So Zovio sold Ashford to the University of Arizona while continuing to serve as the OPM.
• The university came under heavy fire, both internally and externally, for depending so heavily on Zovio for critical services and the conflict of interest that relationship created.
• So the university just bought Zovio, killed the company, and kept the people they needed.

I have no idea whether the University of Arizona is making good decisions or not. I haven’t followed the details closely enough to have an informed opinion. But I do think there’s something interesting here about disintermediation and the potential reversal of the outsourcing trend.

Finding a balance

There’s been a bit of a pendulum swing in EdTech regarding university relationships with companies. On the one hand, there’s been a strong history of outsourcing. Universities let their professors publish textbooks with for-profit publishers, who turn around and sell those books to the university’s students. Pretty much every LMS on the market today started inside a university and got spun off as a private company. And the latest trend is universities outsourcing much of their machinery—from student recruitment to a big chunk of course and program design to student support to job placement—to OPMs.

“Outsourcing” is often an oversimplistic or even a flat-out incorrect way of describing these relationships, but the basic gist is directionally correct. Universities decide that they are better off shifting critical functions of their business over to companies that they believe are better equipped to execute those functions efficiently and effectively. Sometimes these are great decisions, other times they are disastrous, and much of the time they are very mixed.

Of course, for every action, there is an opposite (if not always equal) reaction. The dissatisfaction with the proprietary LMS companies led to a rash of open-source LMSs being developed (only one or two of which have sufficient adoption to have significant impact). There is the push for OER textbooks, which has slowly gained momentum but is still heavily dependent on grant funding for its survival and arguably has so far failed to live up to the promise of improving quality while having some impact on cost. OPMs have given rise to OPEs, which are fee-for-service shops that give more control and independence back to the universities (at the cost of financial support for launching new programs). And now we have this Zovio thing.

Universities are not well designed to be agile. To the contrary, they evolved to resist change in many ways, both in their original Medieval form and in their modern multiversity incarnation. So it makes sense that they might need help from institutions that are designed to evolve more quickly in response to evolutionary pressures (like for-profit companies) in order to keep up with changing mission and sustainability demands. And it also makes sense that the evolutionary pressures that cause companies to change might create tension and misalignment with their university customers that grows over time.

We’re at an odd moment in EdTech. When I look around, I see fewer companies than ever that are succeeding in making a beneficial impact, at least in higher ed. (Professional development is—finally—dynamic again, and K12 is…weird and hard for me to figure out given the amount of attention I’ve given to it.) And yet, I sense we’re on the verge of a change. Companies can be designed to facilitate the changes universities want and need to make. They can provide more efficient and effective services without losing alignment with the needs of their customers, including the need for control over their core mission. And universities, for their part, can become savvier at engaging in these sorts of public/private partnerships than they have generally shown so far. They can make good decisions that allow them to maintain control of their destiny and duty of care while getting the help they need to evolve and thrive as the needs of their students and our society evolve.

I sensed the beginning of this change when I started the Empirical Educator Project and followed it when I co-founded Argos. It’s still pretty early in a process that will take decades. Maybe too early. There will be many failures. But I feel like something is in the air.

I can’t say whether the Zovio acquisition will pan out or even whether it’s a good thing to try. But in the very broadest sense, I believe it is another harbinger of things to come. The pendulum has swung and what was non-profit has become non-profit once again. Will the journey return a more viable, more useful organization than the original failing non-profit college? I don’t know. But there’s a deeper, more interesting, and broader story here than a failing for-profit or a university groping for a way to achieve growth with integrity.

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