OpenLearning is leading the way in a new form of higher education; micro-credentials
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Special Report: OpenLearning has found good traction with its software as a service higher education platform and expects to see strong growth in the years ahead.
Education is now one of Australia’s largest industries, and as a services sector with strong growth prospects, it’s also an ideal field for tech disruption.
One player growing market share in the space is software as a service (SaaS) higher education company OpenLearning (ASX:OLL), which provides a platform that allows universities and other higher education institutions to offer a customised learning experience to millions of learners worldwide.
Founded by Adam Brimo, David Collien and Richard Buckland back in 2012, the company has made a steady start to listed life since joining the ASX boards last December. Since then, it has grown into one of the world’s largest online education platforms with over 1.74 million registered learners across 7,900 courses from 62 education providers.
By the end of December 2019, the number of education-provider clients booked to OpenLearning’s SaaS platform had increased by 170 per cent in annual terms, giving rise to a 77 per cent rise in annual recurring revenue (ARR).
Speaking with Stockhead, Brimo (CEO and Managing Director) discussed the company’s first-mover advantage in micro-credentials – a new form of education service that addresses gaps in the multi-billion dollar higher education and professional development markets.
OpenLearning’s software provides a platform for tertiary institutions and industry associations to provide flexible online short courses that suit the specific needs of students.
To illustrate, Brimo used the example of a communications professional looking to improve their digital marketing skills to better meet their job requirements.
One way to do that would be through a Master’s degree – an intensive and in-depth program which requires an extensive outlay of time and resources.
“While a Master’s degree is great for some people, what many working professionals really need is just three months of industry relevant learning, to pick up specific skills to be effective in their jobs,” he said.
“By allocating a few hours a week to a course delivered through OpenLearning, they can cover such topics as lead generation, online advertising, content marketing – practical skills that are job-specific and they don’t have to take time off work to complete.”
The customised and flexible approach allows people to acquire valuable skills, even if they’re at a stage of their career where they may not have time to complete a full post-graduate degree.
“Micro-credentials allow you to learn the skills you need, increase your productivity and meet your professional goals. At the same time, you might be able to earn credit towards a vocational qualification, university degree or professional certification,” Brimo says.
Having found good early traction in the market, OpenLearning now works with universities and training providers across Australia and Southeast Asia.
Using a SaaS business model, the company derives revenue from education providers subscribing to its platform, with SaaS fees determined by the usage rates from students.
“If you look at the commercial imperatives of universities, they all need to diversify their revenue and attract more students, and micro-credentials are a great way of doing that,” Brimo said.
The company is also targeting market share in non-accredited education providers such as professional development courses and industry groups – an education market which in itself generates around $5bn in annual revenues.
As the business grows, OpenLearning is also leveraging its leadership in the market to establish a nationwide governance framework for micro-credentials, named OpenCreds.
The company has just released a draft consultation paper which aims to set the standard on how micro-credentials are designed and delivered, and how providers give credit for them, according to Brimo.
It all points to an exciting phase of growth in the months and years ahead, as the company unlocks more revenue opportunities in an industry that typically performs well during broader economic downturns.
Demand for tech solutions to online learning are set to become more acute in the months ahead, as education providers are forced to respond to limitations imposed by the spread of the coronavirus.
“In the future of work, higher education will move from being a ‘once in a life’ experience to truly lifelong learning, where everyone continuously learns and develops new skills,” Brimo said.
The market is growing quickly, everyone needs to upskill. Right now it’s all about getting more education providers on board and growing their usage rates.”