Dive Brief: 

• Moodle, a widely used open-source learning management system, announced earlier this month that it is acquiring three companies that build services for its platform to create a single company called Moodle US. 

• This will enable Moodle to offer a wide array of services directly to customers that use its LMS rather than through its partners. The deals are expected to conclude by June. 

• Moodle is falling behind as Canvas, another open-source platform, gains market share in Canada and the U.S., according to one analysis.

Dive Insight: 

Moodle offers an open-source LMS and certifies other companies that provide services that colleges can use with the platform, such as custom-branding and web hosting, as Moodle Partners. These companies pay Moodle royalties, which allow them to use its trademark when advertising their services. 

Having three Moodle Partners become a single company will streamline the options available to institutions using the Moodle platform, said Phil Hill, a partner at ed tech consulting firm MindWires. Those colleges will now likely be choosing between Moodle US and Open LMS, a software company that isn't affiliated with Moodle but provides services for its platform, he said. 

About 22% of U.S. and Canadian higher education institutions used Moodle in 2020, while 32% of them used Canvas, another open-source LMS, according to an analysis from Hill, who tracks the LMS market. Open-source LMS companies share the code behind their platforms, allowing other firms to develop compatible services. Blackboard and D2L, which are not open source, together account for another 36% of market share. 

Blackboard sold Open LMS, a software-as-a-service platform based on Moodle, to Learning Technologies Group last year for $31.7 million in order to move away from the open-source LMS market. 

Moodle has had a contentious relationship with both companies. It cut ties with Blackboard in 2018. The move barred Blackboard from using the Moodle trademark, forcing the company to rebrand its support services for institutions using Moodle's LMS. 

Moodle also stripped two companies of the Moodle Partners designation this year after LTG acquired them. In a February statement, Moodle CEO and founder Martin Dougiamas said the company ended the partnerships because LTG's business strategy conflicted with Moodle's open-source ethos. 

LTG's chief executive Jonathan Satchell called the decision "disappointing but relatively benign" in a statement issued the same day. The company also affirmed its support for open-source software, announcing a day later it would publicly share the code for many of its modules built for the Moodle platform. 

Hill called Moodle's recent acquisitions "competitive in nature," noting that it remains to be seen whether Moodle US will hurt LTG. The creation of the new company also raises questions about whether Moodle will continue supporting its provider network or seek more acquisitions. 

Moodle did not respond to Higher Ed Dive's multiple requests for comment by publication time.