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Instructure Responds to Criticism After Announcing Sale to Thoma Bravo

Instructure, the vendor behind the Canvas learning management system (LMS), has responded to pushback from both users and investors after announcing its sale to the private equity firm Thoma Bravo. On December 4, 2019, Instructure’s CEO Dan Goldsmith announced the sale and explained that “operating in the public spotlight wasn’t fueling innovation and was starting to get in the way of customer success.” Instructure, founded in 2008, went public in 2015. Reaction to the deal has taken two main forms: dissent from investors over the selection process that led to the deal and share price and end-user concerns over the privacy and usage of student and faculty data.

Market analyst Phil Hill has pointed out that the focus on investor priorities in the immediate wake of the sale announcement was alienating to Instructure users in the education field and that “this trend of Instructure harming its brand by its consistent focus on monetization and shareholder value is concerning.” Indeed, the prospective sale has also prompted some education workers to voice concerns over how the sale will affect the company’s use of student data, particularly around privacy and data monetization. After an open letter from stakeholders requested clarification about how student data would be used and legally protected, Instructure’s Chief Customer Experience Officer Melissa Loble reaffirmed the company’s commitment to data privacy and announced plans to develop a revised privacy policy and to create a Data Usage and Privacy Advisory Board.

Source: Education Learning Management Systems at SoftwareReviews, Report Published November 2019.

Our Take

Instructure’s response reveals the company is taking user concerns seriously. However, this incident is a broader reminder of the perennial debates in the education space over the degree to which the pursuits of profit and education can coexist, as Michael Feldstein, copublisher of the blog e-Literate, has pointed out (see heading “Instructure has no parts to fleece”). Instructure’s product is commercial Software as a Service (SaaS) that allows schools to outsource the work of building and maintaining the learning management systems needed to deliver online learning. However, outsourcing the work also means reducing control over the data: for post-secondary institutions, this is the trade-off of choosing to use SaaS instead of building and running their own systems.

Regardless of the outcome of this particular sale, the pushback Instructure is experiencing from some customers is inevitable when users are reminded that the governance of these systems lies outside their full control and could be impacted by a company’s profit motive (whether this be a company’s sense of its fiduciary duties or the unknown priorities of a new owner). Concerns over the monetization of student data will be present as long as an LMS’s ownership is potentially up for sale and as long as the LMS exists as an evolving product that could change how it treats user data. However, this incident demonstrates that end users, not just shareholders, can influence a company’s behavior and direction.