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Cutting the Strings: MOOCs and the Unbundling of Online Education

Do recent reports that San Jose State University would “take a breather” from for-credit MOOCs indicate that online learning isn’t ready for prime time? As MOOC experiments proliferate, teachers, administrators and accreditation officials are carefully monitoring each new revelation. Until now, the major platforms (Coursera, Udacity and edX) have been portrayed as similarly organized curriculum machines that stamp out high quality results at each turn. I expect this perception will change as they and other platforms become more clearly defined.

Unbundling education

Liz West via Flickr

The saying goes that customers in new markets tend to embrace “all-in-one” solutions: they like a one stop shop. As a market becomes more sophisticated, selective customers prefer to assemble separate components into a system that works best for their particular needs. This perspective has held true for many markets, including home stereo systems, bicycles and computers. Likewise, educational systems are comprised of sophisticated components that must work in coordination. These have traditionally been bundled at a specific location — the school classroom. MOOCs signal the emergence of high-quality bundled educational experiences that are not bounded by limits on registration and geography.

Consider the bare-bones technical elements in play for online education: mobile devices emit plumes of user data that mix with pedagogical services driven by analytics. Engaging these elements are students, teachers, accrediting institutions and the job market. Taking into account the youth of the major platforms (Udacity has 45 employees and has administered 32 courses to 740,000 students within a two year period), the speed at which they have achieved meaningful engagement with all interested parties is staggering. The “traditional” classroom system has evolved over decades from the one-room schoolhouse into a complex of districts and university systems. An equally rich online learning ecosystem is surfacing and it is bigger than it appears at first.

Unbundling Education

Setting MOOCs aside, online education engages millions of professionals and students of all levels, from engineers, musicians and graphics designers to military personnel to DUI offenders to DIY education hacktivists. The technologies that provide universal access to knowledge also fuel global demand for life-long learning services. I expect these services to proliferate, partly fueled by the incredible attention being focused on the major university brands that have given life to MOOCs in recent months. If education is to follow the unbundling scenario, we can already see rough categories of services emerging. It would be a mistake to think of education as a “one size fits all” problem. By exploring these categories, I am less fearful of the MOOC domination specter that has become popular in recent weeks.

MOOC branded bundles

Think of each MOOC as a tightly bundled and branded educational experience. They are unbundled from a specific curriculum but they reflect the values of the host professor, their department and their university. When top-tier universities discovered massive interest in their courses from beyond their campuses, they exhibited an irresistible desire to offer high-quality, cleanly produced online courses that show the university in the best possible light. These universities cannot “outsource” classroom services on the scale of the University of Phoenix and others, so why not export a packaged version of their classes to everyone?

MOOC branded bundles are designed to increase the value of the participating institutions and their faculties. Coursera has been the leading illustration of the trend, attracting some 2.7 million students to their courses as of the beginning of this year. It is estimated that edX has served some 500,000 students following a similar branded bundle model. The total number of courses from these platforms so far is around 400 and completion rates hover in the 10% range.

Coursera’s rapid growth, in particular, might pose a challenge as they grow. On the one hand, they must deliver compelling value to students on a course by course basis. At the same time, their university partners are using their MOOC exposure to recruit the best students to engage in more intimate residency experiences on their campuses. Since tuition costs students thousands of dollars for each credit they receive toward their degree, Coursera must balance their interests as they move forward with their own.

The greatest impact of MOOCs may well be for markets that are not well served by traditional educational systems. Early indications are that highly motivated students are discovering how to make the most of MOOCs and are using them to land jobs, change careers and to bring cutting edge thinking into their lives. Sylvia Moessinger has documented the international uptake of MOOCs, which further illustrates the strong branding benefit they deliver to participating institutions. On the flip-side, MOOC communities do not generate the cohesiveness of university alumni organizations. Students who put in the effort to engage with their cohorts achieve better results than those who don’t, but the relationship has not been shown to last beyond the course itself. And, for less motivated students, the major MOOC platforms are reassessing their approach.

Online learning service bundles

Larger but less visible than MOOCs, online learning systems already serve millions of students. Even without “name-brand” university affiliation, new online enterprises are changing how students learn to program, to use sophisticated design tools and to earn college degrees. This large and growing market might be what Udacity is pointing to in their latest statements:

“Rather than providing a platform for MOOCs, bringing in professors from prestigious universities and expanding to a broad range of topics, Udacity will put its efforts into equipping people for careers in technology. There’s a gaping lack of computer science classes at many schools, especially ones that cover the skills people use in the industry today. The explosion of new online coding bootcamps and advocacy groups includes, Hacker School, Girls Who Code, Dev Bootcamp, App Academy and many more.”

This career focus serves as the basis of online learning success in many fields.  For example, currently offers over 2,000 video-based courses, all available to students with their $25/month subscription fee. The courses are tightly focused on developing skills that are attractive to employers, such as photo retouching, web site design, audio and video recording or 3D graphics animation.

The business model provided at this unbundled layer of services differs radically from brand-focused MOOCs. Students pay for courses with a high expectation of immediate success. As a result, teachers can be paid based on the use of the classes they teach. Reportedly, one teacher has been so popular on to have received more than $1.8 million dollars in fees and royalties over the past five years.

It is worth noting that the American Public University System, the largest online-only university system, offers some 170 degrees to over 100,000 students each year. They have unbundled entire college curricula from physical campuses. Originally established to serve military personnel, the system provides affordable mainstream courses and degrees in a range of disciplines, including business, history and information technology management. An undergraduate History degree, for instance, requires 121 course credits at a cost of $250 per credit. While APUS course completion rates are not calculated, their overall graduation rates hover around 40% of students who enroll.  Working outside the tenure system that is firmly in place on traditional university campuses, APUS and other online educational services engage faculties of “scholars and practitioners”.

Outside traditional university curricula, the online demand for test preparation services was recently spotlighted when Kaplan purchased the assets of Grockit, and is further illustrated by the profusion of online drivers education courses and “traffic schools.” For working professionals, certificates of completion are honored by employers in a wide range of “professional development”domains, whether from formally accredited institutions or not. And within organizations across a wide spectrum of industries, online training systems have become an “eLearning” industry that is estimated to generate over $50 Billion each year.

Unbundled, self-service and open sourced component courses

What if building effective learning environments becomes a technology application anyone can use? Unbundling content from its delivery platform means breaking down online learning into its component elements. Pioneering educators are already doing this with Khan Academy’s YouTube videos. Teachers and parents around the world integrate them into their lesson plans and students benefit from custom, structured educational materials. It is worth noting that when Grokit was sold to Kaplan, the core team behind the system rebranded themselves as Learnist, a separate service which enables teachers to organize their own simple online courses.

While the business model for such efforts is a work in progress, platforms from Udemy to Skillshare actively recruit teachers to develop courses and work out marketing arrangements. Teachers are afforded a powerful platform on which to execute their own courses, which they can even tailor for use within established school systems. In traditional school settings, Pearson’s OpenClass competes with offerings from Blackboard, Canvas, and Moodle.

Ultimately, the promise of open source learning platforms such as edX and Google’s Course Builder is for these “do it yourself” toolkits to become usable for the teacher community. The path to self-service, however, looks like it will be a long one. Currently, the cost to a university to deploy a single course using edX hovers at around $250,000, which enables an institution to set up their production studio. As I discussed in an earlier article, each course can cost an additional $35,000 or more in content creation and preparation. As these tools become both more robust for students and approachable for teachers, I expect a diversity of new courses to emerge.

In the meantime, enterprising teachers are experimenting by mixing Khan Academy and other educational videos, Learnist, Google Apps for Education, Twitter and other freely available tools. While these tools do not scale to handle thousands of students in a given course, they can be managed by teachers and used by students in millions of small classes. As universities are put in the position of supporting their faculty while innovating with technology, online education is being unbundled from the bottom while remaining tightly bundled at the top.


When taken in the context of online learning, MOOCs have stimulated students, teachers and the population in general to become more engaged in what is happening in education. The top institutions are benefiting from the visibility and prestige associated with their brands and I expect that to continue. At the same time, I am fascinated by the movement toward online education at every level, from high school to professional development. I don’t expect Stanford to offer courses in Criminal Justice Management, nor do I expect APUS to develop Computer Science degrees anytime soon. I think the big shift is for teachers to find ways to engage their students with online tools, whether they teach in a classroom or a MOOC. If MOOC teachers are the next “rock stars”, then I am rooting for awesome garage bands, too.


John Duhring (7 Posts)

John Duhring has been s a founding team member at nine startups, including Supermac Software and Bitmenu. During his career he has also applied technology to learning at large companies such as Prentice-Hall, Apple and AOL. Follow him on Twitter @duhring.


  1. The unbundling theme appears in a couple of other recent articles:

  2. From a technology perspective, I would turn this around and say the increasing sophistication of the online offerings is bundling online education. What used to be a very disjointed set of tools is becoming a unified and integrated set of tools. Hence the appeal of using systems such as Google Apps to build up a learning management system.

    Watch and listen as the Dart team describes what is coming soon to the web:

  3. UPDATE: Very similar (related to branding and mainstream opportunity) and well written piece came out today.

    • Steve Kolowich’s piece “The MOOC ‘Revolution’ May Not Be as Disruptive as Some Had Imagined” in the The Chronicle of Higher Education left me flabbergasted. The article reflects institutional inertia at its worst. Change is coming. The questions are when? and for whom?

      To understand what the word “disruptive” really means, consider this statistical table:

      U.S. Railroad Employment Statistics (1947-Present)

      and this PDF of Motor Vehicle-related employment (1990-2013), and Employment of Teachers and Software Developers, May 2012:

      Railroads: 85% drop in employment
      Motor Vehicles: 53% drop in employment peak to trough

      Whether you think traditional educational systems are like railroads or motor vehicle manufacturing, new MOOC-like systems are going to “transport” some learners to their learning destinations in new ways. That scenario becomes disruptive when teachers transition from “driving trains” to “building cars” and students transition from “riding trains” to “driving cars”. Looked at from this perspective, some form of disruption appears highly likely in coming years — very possibly involving a lot more personal “travel”.

      Who will go on these new digitally-enabled learning journeys? The “disruptive” changes may be far from traditional educational settings. If Twitter “disrupted” politics in the Arab Spring, imagine what MOOCs might do in other countries. Anecdotally, I just saw a woman wearing a full, black burqa — her face completely covered — typing away intently on her white iPhone …