Analyzing the Business Model of an Edtech Platform

Canvas LMS, “The World’s #1 Teaching and Learning Software”

Canvas, heralded on its website as “The World’s #1 Teaching and Learning Software,” has emerged as a leading edtech platform, fundamentally altering the delivery of education and measurement of student engagement (Oudat & Othman, 2024). This essay aims to critically analyze the business model of Canvas as an exemplar of the broader trends reshaping the edtech landscape. Central to this analysis are the interrelated concepts of platformatization, rentiership, assetization, and scaling, which collectively highlight the transformative—and potentially disruptive—impact of Canvas on higher education (Komljenovic, 2021; Pfotenhauer et al., 2021). This essay argues that to maximize Canvas’s educational benefits while maintaining institutional autonomy, universities and colleges must approach its adoption with a clear understanding of these dynamics, focusing on strategic implementation, comprehensive instructor training, and robust technical support (Clark, 2024; O. Nalyvaiko & A. Vakulenko, 2021). 

The Canvas business model

Canvas caters to a wide range of audiences: K-12 schools, higher education institutions, and businesses and corporations. Canvas uses a tiered pricing model based on the number of users and features required, the details of which are not publicly available. The main revenue streams are as follows:

Pricing structure and revenue streams

  1. Subscription fees for the core LMS platform.
  2. Additional fees for increased number of users, optional features and/or integrations.
  3. Professional services, like onboarding support and ongoing technical training.

The concept of platformatization is crucial to understanding Canvas’s business model. As a platform, Canvas benefits from network effects and data accumulation, which are key drivers of its value proposition (Komljenovic, 2021). The more institutions and users that adopt Canvas, the more valuable it becomes, creating a self-reinforcing cycle of growth. This platformatization, however, raises important questions about ‘rentiership’ in education. As institutions become increasingly dependent on Canvas for core educational functions, they potentially cede control and pay ongoing ‘rent’ for access to essential services and data (Komljenovic, 2021).

The concept of assetization is evident in how Canvas transforms educational content and user data into valuable digital assets, while its scaling capabilities allow for rapid expansion across institutions and geographical boundaries (Komljenovic, 2021; Pfotenhauer et al., 2021). Canvas serves as the central digital infrastructure for many educational institutions, giving it significant influence over course delivery and management, student and staff data, integration of third-party tools, learning outcomes, and overall user satisfaction. Canvas’ open-source roots and commitment to interoperability mitigates some concerns about any excessive rent-seeking behavior. However, this business model, while innovative, is not without risks for educational institutions.

Potential risks for educational institutions

Educational institutions adopting Canvas and similar learning management systems face several significant risks. Foremost among these is the threat to data privacy and security. As institutions increasingly rely on Canvas, they amass vast quantities of student and faculty data, raising concerns about “privacy and security vulnerabilities” (Marachi and Quill, 2020, p. 424). Many institutions are “ill-equipped to protect students and faculty required to use the Canvas Instructure LMS from data harvesting or exploitation” (Marachi and Quill, 2020, p. 419). This vulnerability extends beyond immediate security concerns to broader issues of data ownership and control.

The adoption of Canvas may lead to an erosion of institutional autonomy. As universities enter into agreements with Instructure, they risk becoming entangled in a web of “contractual governance” (Komljenovic, 2021, p. 327). This shift can result in a “legal lock-in” (Komljenovic, 2021, p. 327), making it difficult or costly for institutions to switch to alternative systems or regain control over key educational functions. The risk of dependency is further exacerbated by the integration of Canvas with other third-party applications, creating a complex ecosystem that institutions may struggle to navigate independently (Marachi and Quill, 2020).

Financial risks are also significant. Institutions face pressure from organizations like Jisc to “review their strategic investment in digital learning and teaching” and “re-orientate their investment ratios between physical and digital spheres” (Clark, 2024, pp. 422 & 423). However, these investments may not always yield the anticipated returns, particularly if institutions adopt an “overly risk-averse approach” (Clark, 2024, p. 423) that results in the retention of outdated systems alongside new ones.

Furthermore, the integration of Canvas poses risks to pedagogical integrity and academic standards. The shift towards digital assessment, characterized by some as the “death of the exam hall,” raises concerns about maintaining academic rigor and preventing cheating (Clark, 2024, p. 419). As institutions grapple with “issues around plagiarism, cheating, academic integrity” in online environments, there is a risk of compromising the validity and reliability of assessment practices (Clark, 2024, p. 419).

Mitigating the risks

To mitigate risks and maximize the educational benefits of Canvas, institutions must invoke the strategic imperative during consideration and adoption of an LMS, as well as establish robust support systems for the implementation phase and beyond. Comprehensive instructor training is crucial, ensuring faculty can effectively utilize the platform’s features while maintaining pedagogical integrity. Research suggests that institutions should prioritize thorough training programs to equip instructors with the skills needed to leverage the platform effectively (Komljenovic, 2021). This training should encompass not only technical aspects but also pedagogical strategies for effective online and blended learning. Equally important are technical support services that extend beyond basic troubleshooting to include guidance on best practices for online teaching and learning. Oudat and Othman (2024) emphasize the importance of cultivating a culture of collaboration and feedback among users to enhance the platform’s effectiveness. This collaborative approach can potentially lead to the development of institution-specific best practices and innovations in platform use.

Addressing privacy and security concerns requires careful negotiation of contracts with Instructure, ensuring clear terms regarding data ownership, usage, and protection. Komljenovic (2021, p. 324) warns of the risks of “data rentiership” in educational platforms, emphasizing the need for institutions to maintain control over their data assets. Robust data governance policies, regular audits, and compliance with privacy regulations are essential. Pfotenhauer et al. (2019) suggest approaching data governance from a responsible perspective, considering not just legal compliance but also the broader ethical implications of data use in education. This could involve establishing ethics committees to oversee data use and engaging students and faculty in discussions about data practices, ensuring transparency and ethical use of learning analytics.

To maintain institutional autonomy, universities should avoid over-reliance on a single platform. This involves maintaining in-house expertise of core educational functions and carefully considering the long-term implications of integrating third-party applications within Canvas. Nalyvaiko and Vakulenko (2021) emphasize the importance of institutions retaining control over their core pedagogical approaches and not allowing the platform to dictate educational strategies. Developing a long-term digital strategy that includes Canvas but is not wholly dependent on it is crucial. This might involve exploring open-source alternatives, developing institutional plugins or extensions for Canvas, or maintaining parallel systems for critical functions. Finally, institutions should implement processes for continuous evaluation and adaptation of their Canvas implementation, regularly assessing its impact on learning outcomes, student engagement, and faculty satisfaction (Oudat and Othman, 2024). This proactive and strategic approach is essential for institutions seeking to leverage platforms like Canvas while maintaining their educational integrity and autonomy amid an evolving industry.

Whose vision of the future are we building?

The rapid adoption of Canvas and similar edtech in higher education institutions worldwide signals a shift towards a future predominantly shaped by technocentric and neoliberal ideologies. This vision, accelerated by the COVID-19 pandemic, is characterized by pervasive digital transformation. As Clark (2024, p. 414) notes, the pandemic has been portrayed as a “catalyst for change,” legitimizing the “technical pervasion of an already technology-centric HE landscape.” In this context, the strategic implementation of Canvas becomes crucial not just for leveraging its benefits, but for maintaining institutional autonomy in the face of these broader shifts.

Central to this envisioned future is the primacy of data-driven decision making. Universities are increasingly urged to become “data-empowered organisations” and to “collect data, not anecdotes” (Clark, 2024, p. 423). This emphasis on data analytics promises more efficient operations and personalized learning experiences but also raises critical questions about privacy, surveillance, and the commodification of student information. To navigate this data-centric paradigm effectively, comprehensive instructor training is essential. Educators must be equipped not only to use Canvas’s features but to critically engage with the data it produces, ensuring that pedagogical considerations remain at the forefront of decision-making processes.

The future being constructed through platforms like Canvas also envisions increased privatization and commercialization of education, with a growing push for “collaboration between higher education providers and technology companies” (Clark, 2024, p. 423). This blurring of lines between public institutions and private enterprise demonstrates the need for robust technical support that goes beyond troubleshooting. Institutions must develop the in-house expertise to customize and control their Canvas implementations, resisting the homogenization of educational experiences and preserving their unique cultural and pedagogical traditions.

Critics like Marachi and Quill (2020) warn that the uncritical adoption of platforms like Canvas may reinforce existing inequalities and pose significant risks to privacy and institutional autonomy. This rasies the question, “Whose vision of the future are we building?” The increasing entanglement of commercial organizations with educational technologies raises concerns about the potential subordination of pedagogical integrity to market-driven interests. Institutions must therefore carefully consider how to implement Canvas in ways that align with their fundamental missions and values, rather than allowing the platform to dictate educational strategies.

While Canvas offers significant potential benefits for learners and educators, its adoption must be approached with a clear understanding of the broader dynamics at play in higher education technology. By focusing on strategic implementation, comprehensive instructor training, and robust technical support, institutions can maximize Canvas’s educational benefits while maintaining their autonomy. This approach may allow universities and colleges to harness the advantages of technological innovation while preserving academic integrity, protecting student and faculty data, and upholding core educational values. Only through such a balanced and strategic approach can institutions ensure that their use of Canvas contributes to a future of higher education that is not only technologically advanced but also equitable, diverse, and true to the principles of academic inquiry and social responsibility.

References

Clark, D., 2024. The construction of legitimacy: a critical discourse analysis of the rhetoric of educational technology in post-pandemic higher education. Learning, Media and Technology, 49(3), pp.414-427.

Komljenovic, J., 2021. The rise of education rentiers: digital platforms, digital data and rents. Learning, Media and Technology, 46(3), pp.320-332.

Marachi, R. and Quill, L. (2020) ‘The case of Canvas: Longitudinal datafication through learning management systems’. 25(4), pp.418–434.

Nalyvaiko, O. and Vakulenko, A., 2021. Canvas LMS: Opportunities and features. Educological discourse, 4(35), pp.154-172.

Oudat, Q. and Othman, M., 2024. Embracing digital learning: Benefits and challenges of using Canvas in education. Journal of Nursing Education and Practice, 14(10), pp.39-43.

Pfotenhauer, S., Laurent, B., Papageorgiou, K. and Stilgoe, J., 2021. The politics of scaling. Social Studies of Science, 52(1), pp.3-34.

 

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