Providence Equity Partners might think so. I just read that Providence will purchase Blackboard for $1.64B (a 21% premium over its stock price on April 18, 2011, the day the company announced that it was “evaluating strategic alternatives”), and I have got to say that initially I was more than a bit surprised.
I can’t say I that I much enjoyed using Blackboard while I studied at Fordham–the site was slow, one-dimensional, broke down constantly, and had an archaic, mid-90s feel. It was certainly in need of complete overhaul back in 2008, since most of my teachers used it only as a glorified repository for slides and handouts.
But, I can see the potential in investing in a site like Blackboard–especially in the context of cloud computing. Currently the site uses managed hosting, which unlike the cloud, is limited in scope as it requires universities to engage with Blackboard to install the software on servers locally. Blackboard personnel are required to visit the universities to administer the installation and manage the process.
If Blackboard transitions to cloud computing, each university could sign up for the service by downloading the software directly from the web. Universities will not have to allocate resources for maintaining their local servers, which has been a problem in the past and led to service issues for students and faculty (i.e. “Blackboard is down for maintenance”).
For the cloud to be viable, Blackboard would need to ensure that their system was up and running 24/7 (which would be pricey). But, there are cost savings associated with not having to vet and manage technology locally at each university, which would simplify Blackboard’s maintenance and support operations. In this way, Blackboard could function within a ”software as a service” (SaaS) model and charge fees on a per-user basis.
Hopefully, the team at Providence sees the potential for a site like Blackboard and can shake things up once they take it private.
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