Blackboard buying into Moodle is just moving deck chairs on the Titanic. The "traditional" LMS's days are numbered. A number of factors play a role - here are the key ones:
- emergence of KM platforms like Google Apps (or Facebook, or Live@Edu, etc.) These are not going away, and immense amount of money is going into extending their features, usability, and reach.
- learning as a life-long process: for all the arguments around content portability, traditional LMS's can't really make student content portable. Enter Docs.
- blended learning, inverted classroom, etc.: all of these are more collaborative in nature than traditional approaches. More collaboration requires better tools for collaboration. And open-ended tools like Google Apps are a natural home for student-generated content (Docs, Sites, Blogger, Picasa) or collaboration (Gmail, Chat, G+).
- traditional vendors are hobbled with legacy LMS systems: witness OpenCourse from Pearson. This should have been a killer product. Kudos to BB for willingness to cannibalize their own market, although we've yet to see their motives really.
- disappearance of walled gardens: traditional LMS's are often presented as "safe" online environments (as opposed to "scary" Google). The reality and common sense are already starting to prevail.
- consistent student/ back-office environment: Google Apps allows everyone in the school to use the same environment. This significantly reduces complexity, professional development and other costs.
- 1:1 environments: this isn't about having the computer replace the exercise book. It's about moving the exercise book into the cloud, allowing the computer to become just a pencil. This is precisely what Google is pushing with Chromebooks.
- it's really really hard to beat a free, zero infrastructure product. And easy to use. Did you need a consultant to start using Gmail after all...?
- tools like our Teacher Dashboard will proliferate. It's early days, but we're working our butts off to make Google Apps more relevant to schools and teachers; increasingly, this will mean eating into traditional LMS feature sets.
- anecdotal evidence: I have never come across a school that rolled out Google Apps, and then decided to switch away. I've now seen many shuttering Moodle and other LMS environments in favour of Google Apps. I fully acknowledge that we're biased, but note that I went out of my way to find schools leaving Google Apps to learn about what didn't work for them. (If you know of any please let me know!!)
BB/Moodle/etc. will no doubt add features, but this is not a fight they can win on features - consumers and enterprises (and schools) have repeatedly rejected more feature-complete products for easier-to-use or cheaper alternatives.
BB's acquisitions suggest that they view Moodle and open source as a threat; I think a far more profound shift is under way.