3 Companies That Sell Course Software Say They Are Raking in Money
By MICHAEL ARNONE
Chronicle of Higher Education Online
Oct 24 01
Arlington, Va.
The top three providers of course-management software -- Blackboard,
eCollege, and WebCT -- have either seen their first profits or soon
will, their chief officers announced Tuesday.
Blackboard saw its first profits in September, said Matthew S.
Pittinsky, the company's chairman. Oakleigh Thorne, eCollege's chairman
and chief executive officer, said the company expects to be in the black
in the first quarter of next year. WebCT forecasts it will turn a profit
sometime next year, said Peter Segall, the executive vice president for
information and management practice at the company.
The three companies say they are raking in money and customers at a time
when capital investment in online education has plummeted and many
companies have either merged or folded entirely. Consolidation in the
industry has led to profitability for a few top companies that have a
critical mass of market share.
The men spoke at a forum on platforms for managing online courses during
the Online Universities Conference, which began here Monday and ends
today.
Mr. Pittinsky credited the sales surge to more institutions' buying and
upgrading their Blackboard systems for the start of the new academic
year. Because of that seasonal rise and fall of buying activity,
Blackboard will post financial losses for October and November, but he
expects the company to see profits again in December and stay profitable
thereafter.
Mr. Thorne, of eCollege, said that company is "almost at the break-even
point." From 2000 to 2001, eCollege saw an 80-percent increase in sales
to its top 30 customers, Mr. Thorne said.
Blackboard and eCollege reported their earnings Monday for the third
quarter of 2001. Blackboard posted $15-million in revenues for the
quarter, a 324-percent increase over the same period last year and
$1.5-million more than in the second quarter. Officials of eCollege saw
a 42-percent increase in revenue over last year's third quarter, to
$5.5-million, and saw its net loss decrease by 74 percent, to
$2.4-million.
WebCT expects to be profitable next year because it has matched all
expectations for sales, revenue, and deferred revenue for the past year,
Mr. Segall said. The company enjoyed a 314-percent increase in sales and
saw its customer base rise to 2,265 institutions from 1,544, a
47-percent increase. The company has sold 150 of its new campus servers,
exceeding its goal so far for the year. Each server costs more than
$40,000.
The only publicly traded company of the three, eCollege, released all of
its financial data. Blackboard and WebCT, which are privately held, ....