By Paul Glader

Education publishing giant Pearson LLC said Friday that it is jumping further into the learning management system business, using Google technology and perhaps threatening existing competitors such as Blackboard.

The London-based Pearson announced a beta version of its product, called OpenClass. It aims to improve access and affordability with the produce. It said it wants instructors and institutions to engage and interact with students in the way students use technology today. They said students and faculty can use the software on iPads, laptops and other devices.

And it aims to provide the services free to schools using cloud storage. That means no hardware, licensing or hosting costs. It hopes that allows for wider adoption of new methods of learning and more interaction with students in other campuses and cultures.

“Now, educators and students are able to communicate and collaborate in new ways across institutions and around the globe—providing a richer, more personal and more connected learning experience.  At no cost,” said Matt Leavy, CEO of Pearson eCollege, in a statement.

The new product works with Google Apps for Education. Customers can buy it in the next week from the Google Apps Marketplace, a storefront for the Google apps. The arrangement boosts Google’s presence in the education industry and increases the likelihood that large technology firms such as IBM, Facebook and Apple will also develop more products to challenge course management solutions and that could cause drastic changes to colleges, universities and high schools.

Course management software is big business. Every higher education institution uses a learning management system in some form. They are often expensive licenses, which drive up the cost of education.  According to a 2009 report by Tagoras <http://www.tagoras.com/> , the average cost for an LMS over three years ranges from $59,000/500 users to $435,000/unlimited usage. OpenClass said it has  no technology cost to schools.

Research firm IDC estimates the e-learning infrastructure solutions market grew to roughly  $1.6 billion in 2011 from $422 million in 2001. Based on IDC’s forecasts, BMO Capital Markets predicts growth will slow slightly. But it still predicts it will be a $2 billion market by 2016.

Several mergers have happened in the space. In October 2010, Taleo (TLEO) acquired Learn.com. In January of this year, SumTotal Systems acquired GeoLearning. In May, SuccessFactors (SFSF) acquired Plateau. Pearson has made forays into this part of the education industry before. But it has not been recognized as a top 15 payer (see the list below).

“OpenClass is tightly integrated with Google Apps for Education, our free suite of communication and collaboration applications. Through the Google Apps Marketplace, schools will have access to OpenClass,” said Obadiah Greenberg, Google’s Business Development Manager for Education.

Adrian Sannier, Senior Vice President of Learning Technologies at Pearson, said the software will accelerate how technology facilitates learning with a free, open and innovative platform. He said it “easily scales and lets students work via social media, with an intense focus on learning that elevates achievement.”

Pearson is testing the software with nine schools including Abilene Christian University, Arizona State University, Central Piedmont Community College, West Virginia University at Parkersburg, Monash University, Kentucky Community & Technical College System, Rice University, the University of Wisconsin Extension, and Columbia University. Many of these schools are already using OpenClass this fall.

Pearson plans to improve its current version of the software - improving data, social feature and functionality - from the tests.

“The days of ‘business as usual’ in higher education are gone,” said Kevin Roberts, chief planning and information officer at Abilene Christian University. “OpenClass is a powerful tool to help us move forward into the connected, mobile and open world that we live in.”

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For more information, visit www.joinopenclass.com.

Editors Note: We plan to test OpenClass and give a review of the software here in coming days. Meanwhile, we welcome comments about this technology and how the competition for LMS and CMS could intensify. We also welcome news and tips on this subject. You can email me at [email protected]

According to www.trimeritus.com, the largest LMS providers are (in alphabetical order): 

1. Blackboard (BBBB) Learn (slated to go private in 3Q11)
2. Certpoint Systems
3. CornerstoneOnDemand (CSOD)
4. Geometrix Training Partner
5. Inmedius’ Generation21 Enterprise
6. Knowledge Management Solutions’ KMx Enterprise
7. Meridian’s KSI Knowledge Center
8. Mzinga OmniSocial Learning Suite
9. Outstart’s TrainingEdge.com
10. Saba’s (SABA) Enterprise Learning Suite
11. Success Factors’ (SFSF) Plateau Learning Management System/Talent Management Suite
12. SumTotal Systems’s Total LMS and GeoLearning GeoMaestro
13. Taleo’s (TLEO) Learn.com LearnCenter Workforce Productivity Suite
14. TEDS Talent Management Solutions Suite
15. WBT Systems’ TopClass LMS