Presentation on the possible business impact of MOOCs for the Special Interest Group OER of SURF

1. Transform to the power of digital
The possible business impact of MOOCs
Timo Kos
@timokos
/timokos
@KhanAcademyNL
www.khanacademy.nl
timo.kos@capgemini.com
timo@khanacademy.nl
Capgemini Consulting
marketleader education
Khan Academy NL
Voorzitter stichtingsbestuur

2. Copyright © 2013 Capgemini Consulting. All rights reserved.
Content
1. A brief history of MOOC’s
2. Business impact of MOOCs
3. Strategic scenario’s
2

3. Copyright © 2013 Capgemini Consulting. All rights reserved.
MOOC = Massive Open Online Courses (I)
A. Early pioneers (2007/2008) of connectivism & social learning (now cMOOC)
3
David Wiley (Brigham Young University)
George Siemens (Athabasca University)
Stephen Downes (National Research Councel
Canada)
Proponents of connectivism use the web to explore the possibilities
of open & social (‘networked’) learning

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MOOC = Massive Open Online Courses (II)
B. Pioneers (2011-2012) of free massive open online classes (now xMOOCs)
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Salman Khan
Prof. Peter Norvig & Prof. Sebastian Thrun
(Stanford)
Prof Andrew Nge & Prof. Daphne Koller
(Stanford)
Prof. Anant Agarwal
(MIT)
These proponents use the web to provide traditionally structured online courses for free and
aim to ‘disrupt higher education and open it up to the masses’.

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xMOOC platforms: Technology start-ups building new digital distribution channels
for ‘open’ online education...
5
Founded: April 2012
Founder: Koller & Nge
(Stanford professors)
Company: For profit
Funding: $22 million
(Venture Capitalist)
# Universities: 62
# Courses: 323
# Topics: All academic fields
# Students: 3.5 million
Certification: Yes (most)
Proctored examination: Yes,
(5 accredited courses + partnership
with ProctorU)
Open Source: No (licenced)
Founded: May 2012
Founders: MIT & Harvard
Company: Not- for-profit
Funding: $60 million
(Harvard / MIT: 30 each)
# Universities: 12
# Courses: 20
# topics: ICT, Engineering, Health
#students: 700.000
Certification: Yes
Proctoree examination: Yes
(450 CBT locations in 110 countries
via partnership with Pearson VUE)
Open Source: Partly (licenced)
Founded: January 2012
Founder: Sebastian Thrun
(ex Stanford professor)
Company: For profit
Funding: $15 million
(Venture Capital)
# Universities: none
# Courses: 22
# Topics: ICT
# Students: 800.000
Certification: Yes
Proctored examination: Yes
(4000 CBT locations in 170 countries
via partnership with Pearson VUE)
Open Source: No (licenced)

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05101520
#1 - Harvard University
#3 - MIT
#4 - University of California- Berkley
#27 - University of Toronto
#35 - The University of Texas at Austin
#63 - McGill University
#64 - Australian National University
#91 - Rice University
#101-150 - École Polyt. Lausanne
#201-300 - Delft University of Tech.
#301-400 - Georgetown University
-# - Wellesley College
Number of courses announced or offered
Certificate after completion
Official on-campus course
Non-official course
Textbook digital available
0 5 10 15 20
Stanford University - #2
California Institute of Technology - #6
Princeton University - #7
Columbia University - #8
University of Pennsylvania - #14
University of California, San Diego - #15
University of Washington - #16
Johns Hopkins University - #17
University of California, San Francisco - #18
University of Wisconsin–Madison - #19
The University of Tokyo - #20
University of Michigan - #22
University of Illinois at Urbana-Ch. - #25
University of Toronto - #27
University of Minnesota - #29
Northwestern University - #30
University of Colorado Boulder - #33
Duke University - #36
University of Maryland, College Park - #38
The University of British Columbia -#39
The University of North Carolina - #41
University of Copenhagen - #44
University of California, Irvine -#45
Pennsylvania State University - #49
Vanderbilt University - #50
NO certificate after compl.
Accredited course
.. partnering with top universtities of the Shanghai Ranking (ARWU)
(25 from the top 50, including 7 from the top 10)

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…experimenting with online didactics from other successfull open education start-ups…
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Founded: 2006
Founder: Salman Khan
Company: non-profit
Funding: $ 10 million
(Philantropists)
# Courses: 3000+ weblectures
(200 million + views)
# Topics: Math,
Science,
History
Art, etc..
# Students: ca. 8 million
Certification: NO
Proctoreed examination: NO
Revenue Model: Non-profit
Open Source: Yes
Founded: 2009
Founder: Phillip Schmidt
Company: non-profit
Funding: unknown (Philantropists)
# Courses: 6 schools on open
learning
# Topics: Open Data,
Education
Webcraft
Social Innovation
Mathematical Future
# Students: 30.000
Certification: NO
Proctoreed examination: NO
Revenue Model: Non-profit
Open Source: Yes
Founded: 2011
Founders: Zach Sims and Ryan
Bubinski
Company: for-profit
Funding: $ 12,5 million (Venture
Capital)
# Courses: 5
# Topics: Javascript
HTML & CSS
Python,
Ruby
JQuery
# Students: 550.000
Certification: NO
Proctoreed examination: NO
Revenue Model: Referral fee’s
Open Source: No (licenced)

8. Copyright © 2013 Capgemini Consulting. All rights reserved.
… AND introducing new (non-formal) types of HE certificates issued for automatically
and/or peer-graded exams…
8

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… creating possibilities to pursue new monetization strategies and create new business
models for higher education…
 license model: a share of gross revenue between platform provider and universities offering courses hosted on the
platform for tuition paid degee programs or fees for additional services to students (e.g. coaching)
 Administrative fees: for certification on proctored exam locations
 Recruitment fees: from corporations for recruiting talented students
 Premium/Fremium model: free and upgraded paid versions of the MOOCs and services, resembling the ‘freemium’
and ‘premium’ payment models of other internet services
 Advertisement: monetizing on the scale and social characteristics of users of the platform.
9

10. Copyright © 2013 Capgemini Consulting. All rights reserved.
Content
1. A brief history of MOOC’s
2. Business impact of MOOCs
3. Strategic scenario’s
10

11. Copyright © 2013 Capgemini Consulting. All rights reserved.
Given the unprecedented scale of MOOCs and the global reputation of the partner
universities of the xMOOC platforms, we set out to answer the following question :
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are MOOCs a HYPE or a DISRUPTIVE INNOVATION?
Review board
Drs. Anka Mulder
Prof. Dr. Marc Vermeulen
Interviewees
Drs. Paul Rullmann (TUD)
Prof. dr. Simone Buitendijk (UL)
Prof. dr. Elmer Sterken ()
Prof. dr. Ed Brinksma (UvT)
Drs. Agnita Mur (HL)
Drs. Gerard van Drielen (HR)
Dr. Geleyn Meijer (HvA)
Dr. Wilfred Mijnhardt (EUR)
Drs. Tom Abel (UvA)
Opdrachtgever
Drs Paul Rullmann
Drs. Anka Mulder
Casestudy ‘Business impact of MOOCs’
as part of 3 year research with MIT
Business plan Online Education

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First we analyzed xMOOC platforms from Gartners technology hypecycle perspective …
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(Smart) Browsers
Social Media
You Tube
Web Cams
… and concluded that MOOCs do not fit the characteristics of a technology hype
(although the media attention they receive do fit the characteristics of a media hype)

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The theory of
ʺdisruptive innovationʺ
(Open) Online Education viewed from Christensens’s disruptive innovation perspective...
„A process by which a product or service
takes root initially in simple applications
at the bottom of a market and then
relentlessly moves ‘up market’, eventually
displacing established competitors”
‒ Professor Clayton M. Christensen,
Harvard Business School
Author of Disrupting Class (2008) and The
Innovative University (2011)
Low ranked
(under) graduate
degree programs
High ranked (under)
graduate degree
programs
Top ranked (under) graduate
degree programs

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The value propositons of the different types of online education compared:
14
Traditional education
(on-campus, f2f)
OpenCourseWare xMOOCs Online (only)
Education
Accessibility Selective/inclusive: (high) tuition,
admission requirements
Free and open access for everyone Free and open access for everyone Selective/inclusive: (high) tuition,
admission requirements
Instruction / classes Offline
(inflexible schedule)
Online courses, web-lectures &
digital learning materials
Online classes &
digital learning materials
Online courses
(flexible schedule),
Interaction between
students
Yes, mainly f2f & off-line No, self learners Yes,peer-to-peer via online
learning platforms and social
media and ‘MOOC-meetups’
Yes, online learning platforms,
virtual classrooms, and social
media
Quality Control Yes, Accreditation Yes: for content
No for process
No, only by reputation
(professor / ranking)
Yes, Accreditation
Interaction between
studens & faculty
Yes, (mainly ) off-line & on-campus No Yes, online learning platforms and
social media
Yes, online learning platforms and
social media
Exercises Yes, both individual and in groups Yes, as static teaching materials
(no student feedback)
Yes, online excercises (quizes) with
automated answers & feedback
Yes, revised by teacher/faculty
staff
Exams Yes, on campus & graded by faculty
staff
Yes, as static teaching materials
(no grading)
Yes, online & computer graded or
by peer-grading
Yes, online and graded by faculty
staff
Identity verification Yes, on campus No Yes: proctored exams in computer
based testing centres
Yes, through online or on campus
identification process
Deadlines Yes, fixed terms (semesters,
trimesters)
No Yes, dedicated course periods
during the year as well as deadlines
for homework & exams
Yes, several starting dates during
the year as well as deadlines for
homework & exams during coures
Certificate Yes, Accredited No Yes, non-formal certificate of
completion (by professor a/o UniX)
Yes, Accredited
Degree Yes, Accredited No No (not yet) Yes, Accredited

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The future? Early adoptors are positioning themselves for a new and truly global market
for massive (low price) formal certificate & degree awarding online education
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Traditional universities
Time
Marketsegments
cMOOCFor Profit Universities
Self Learner Population
(badges)
Certificate seeking
(non-formal)
Degree &
Certificate
seeking
(formal)
F2F
Campus
(formal)

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Which will have impact on on the long term financial outlook of incumbant universities
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Moody’s Investors Service, Credit Outlook Higher Education Institutions USA, US Public Finance, Sept 2012

17. Copyright © 2013 Capgemini Consulting. All rights reserved.
So are MOOCs a disrputive innovation? YES
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1. MOOCs are distributed through new digital channels with a potential of attracting millions of visitors,
creating valuable digital channels with the potential of new (low price) revenu models that are common in
the internet economy (scale now, monetize later).
2. MOOCs serve a global mass market with a new value proposition that till recently was not available or
affordable for large groups of students around the world.
3. Some of the MOOC courses provide the same content as on campus courses, and claim to be of the
same academic quality.
4. MOOCs are not equal to a campus education, but a stripped down version targeted at a
studentpopulation who do not need the full value offered at the high end of the market
5. MOOCs are produced using widely accepted internet technology which enable any lecturer with a high
academic reputation to produce a MOOC by themselve and reach a potentially unlimited number of
students at a fraction of the cost per student that are needed for delivering traditional (online) university
lectures.
6. MOOCs offer a supplement to on-campus courses and are already being integrated in credited
(bachelor) degree programs.
7. MOOCs are replacing parts of the regular campus curriculum and thereby start to alter the business
model and operating model of brick-and-mortar universities (leading to speciliazation between
universities).

18. Copyright © 2013 Capgemini Consulting. All rights reserved.
Content
1. A brief history of MOOC’s
2. Business impact of MOOCs
3. Strategic scenario’s
18

19. Copyright © 2013 Capgemini Consulting. All rights reserved.
Nyenrode Business
University
MIT
TUD
Stanford
Universiteit
Leiden
Market Segments – focus versus motive
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AcademicProfessional
ProfitNot-for-profit
Focusofqualification
Motive
Duisenberg
School of Finance
Phoenix
University
Kaplan
University
NCOI
University of
Liverpool
OU
HS Inholland
Universidad
Europea de Madrid
Avans
INSEAD
Liberty U
NTI
DeVry
University of Southern
California
University of
Notre Dame

20. Copyright © 2013 Capgemini Consulting. All rights reserved.
Nyenrode Business
University
MIT
TU Delft
Stanford
Universiteit
Leiden
Where do the MOOC Platforms fit in the market for online higher education?
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Academic
(selective)
Professional
(inclusive)
For-ProfitNot-for-profit
Focusofqualification
Motive
Duisenberg
School of Finance
Phoenix
University
Kaplan
University
NCOI
University of
Liverpool
Open
University
HS Inholland
Universidad
Europea de Madrid
Avans
INSEAD
Liberty U
NTI
DeVry
University of
Notre Dame

21. Copyright © 2013 Capgemini Consulting. All rights reserved.
Nyenrode Business
University
Duisenberg
School of Finance
Universidad
Europea de Madrid
MIT
Delft University of
Technology
Stanford
Erasmus University
Rotterdam
When the rise of Massive Online Education is viewed as a disruptive innovation,
an early adoption strategy for online education differs per market-segment
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Academic
(selective)
Professional
(inclusive)
ProfitNot-for-profit
Focusofqualification
Motive
Phoenix
University
Kaplan
University
NCOI
Amsterdam University
of Applied Science
Open University
Saxion University of
Applied Science
LEVERAGE
GLOBAL
REPUTATION
ADD. PROF
NETWORK
SERVICES
LOCALLY
APPLIED
SCIENCES
LOW PRICE
FIGHT
MARKET

22. Copyright © 2013 Capgemini Consulting. All rights reserved.
Transform to the power of digital
Timo Kos, Principal Consultant
Market Leader Education & Employability NL
Timo Kos
Phone: +31 (0)30 6897540
Mobile: +31 (0)6 47924140
timo.kos@capgemini.com
http://linkedin.com/in/timokos
http://twitter.com/timokos