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.

 

3 thoughts on “Analyzing the Business Model of an Edtech Platform”

  1. Great work on this Melissa. A real sharp focus on this critique of Canvas and its business model, alongside some tangible recommendations for institutional practice in response. Very measured throughout, I thought and explicitly drawing on the literature both from the readings and more broadly. Very well done.

    I found it interesting to note that your underlying premise was essentially one of scale and what sort of changes scale brings to an existing education structure. The business model of Canvas (like most others, I would think; their model is seemingly quite common) is predicated explicitly on scale. Not just people, as you note, but institutions, data, and integrations.

    However (I think I mentioned this in the tutorial last week so my apologies if so) education itself is a scaled enterprise with the mandate being essentially to education everyone in a society. This scaled logic is much more prevalent in schools (primary and secondary) and less so in universities, but even within universities some have mandates to reach all, or as many as possible (the Open University system, for example). So it is an interesting intersection of two scaled enterprises: education and business. One can be seen to feed off the other, perhaps?

    Also, and I think Chris noted this on the discussion boards, but does the non-commercial element change any of this at all? If we lean towards openly available platforms like Moodle, we still see an emphasis on scale. More people and more institutions. Perhaps just a slightly less intrusive form of scale? This is an open question to be sure as there are others ways to ensure growth in non-commercial edtech (integrations, hosting, support, analytics, etc.).

    ‘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).’

    Yes, this is an important point to be sure and one I can safely assume to be the byproduct of this eduction taking place in capitalist systems: value is derived from what is available, which is in this case is service, support, and products derived from the data being generated.

    Truth be told, I found the entire section titled Potential risks for educational institutions to be convincing as an underlying critique. Well done there and well argued throughout. It is important to note these risks and then develop appropriate responses to them: creative, clever, and clear-headed responses!

    ‘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).’

    I might extend this ‘ill-equipped’ label to the broader integration of edtech itself. Educational institutions and indeed the broader sector have proven reluctant or unwilling to invest in their own capacity for generating and using edtech (despite a lot of great work done in the sector pre-pandemic and in the decade or so prior: OpenEdTech a remnant of that activity: https://openedtech.global). The ability to protect from data exploitation a further extension of this ill-equipedness (I just invented a word!).

    The ways forward presented in Mitigating the Risks section I found measured, positive, and good responses to the critique you provided beforehand. No argument with any of these.

    ‘This collaborative approach can potentially lead to the development of institution-specific best practices and innovations in platform use.’

    Agree with this that collaboration can generate these cultures of innovations and practice-sharing (and in return reclaim that position of teaching as critical and creative practitioners). These cultures are hard to generate and maintain but necessary. At Edinburgh, some of this is done through Teaching Matters (https://www.teaching-matters-blog.ed.ac.uk).

    Overall, this is really good work Melissa. I am very pleased with your progress here and truly look forward to where we go next (including Reclaiming the Future in Weeks 10-12 which you already got a start on in this post!). At the halfway point of the semester and things are looking truly promising for your trajectory here.

  2. Thank you for your feedback, Michael! I hope your week is off to a good start! I am really enjoying the course and I think I am learning as we go, which feels AWESOME. I am also feeling positive about the idea of “upgrading” my pgcert to a master’s at some point, to put it in edtech terms 😉

    Something I’ve been wondering about—which is why I asked about whether academia is overreacting to edtech—is the expectation of us in terms of critiquing the readings themselves. So far, I don’t think I’m assessing the sources themselves at a graduate level, and I’m not sure how to bridge the gap…

  3. Hello there Melissa,

    ‘Something I’ve been wondering about—which is why I asked about whether academia is overreacting to edtech—is the expectation of us in terms of critiquing the readings themselves. So far, I don’t think I’m assessing the sources themselves at a graduate level, and I’m not sure how to bridge the gap…’

    Good question and a perfectly legitimate concern. Being critical means supporting your critical argument with a critical use of the literature (so much criticality!). That means a heightened sense of what counts as research and how to evaluate the mounds of research out there (some of which is frankly not very good). I do find library guides a good way to begin to approach that critique technically, like this https://students.flinders.edu.au/content/dam/student/slss/academic-writing/critiquing-literature.pdf. That is a jumping off point of sorts into this kind of critique. If you do indeed move on to the MSC (no pressure!), the dissertation’s literature review is where you really exercise this ability. Every paper I write has a lit review where I break down the research around my central arguments.

    But more broadly when reviewing a bit of research, I have to note the full spectrum of the different parts of research.

    Ontology: is the author starting from an ontological position that I find convincing (or even arguable)? For example, if a religious person and an atheist are arguing around the existence of God, is there enough common ground to move forward? That is a really clumsy example of ontology but hopefully you know what I mean.

    Theory: I am very suspect of research (barring anything strictly statistical) that does not employ a theoretical model to frame the research. You can also understand the underlying assumptions of the author around what theory they use (their underlying assumptions about the nature of reality and society). Granted some disciplines don’t use theory at all (medicine, etc.) but any analysis of social interaction needs some theoretical frame.

    Methodology: this is a big one for evaluating research. Is the sample robust enough to support the claims they are making? You see this a lot with edtech studies. Paper A did a controlled study of 20 people in a classroom using Technology X. Findings reveal technology does improve learning outcomes (they always say that) but there is little to no generalisability around that kind of study.

    Analysis/Findings/Significance: is the analysis sound? Are the findings directly emerging from that analysis? Is the discussion of the significance of this study measured? Authors sometimes take a big leap here from analysis to significance so important to note that.

    But I think you should feel comfortable arguing against some of what you are reading. As long as you support that argument with something, lively debate and dialogue are at the core of all of this. We are all starting from some underlying premise (some might call this a bias!) of what education is or should be.

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