While making software free seems counterintuitive to the core of running a profitable business, it’s exactly what Moodle founder Martin Dougiamas did when he launched his course management system in 2001.
Since then, the Perth-based edtech has grown to accommodate more than 311 million users and operates in approximately two-thirds of universities worldwide.
Speaking with Business News Australia Dougiamas explains how keeping aspects of Moodle free is a “sensible” approach towards software development in a field like education, where teamwork is paramount.
“To me, it’s very natural. It comes out of academic tradition [where] you learn, share and work together - it's very collaborative. It's not about competition,” he says.
“It's a very healthy ecosystem for open source. Most of the lower layers of the internet and operating systems like UNIX are all built with this model because it works.
“The dotcoms like Google, Microsoft, Apple and Facebook completely operate on open-source software.”
By making it widely accessible, Moodle has swept the globe reaching more than 1.7 billion enrolled students in 243 countries. From helping young girls in Rohingya study via phone to having the Andorran government implement three online education systems, its open software can be applied to countless projects.
To keep the lights on, the company has 108 partners that offer software hosting, app integration, customisation, analytics and consultation services for clients wanting to integrate Moodle, MoodleCloud or Moodle Workplace into their system.
Each provider hands over 10 per cent of their gross revenue as a royalty to Moodle, which is used to cover the wages of 155 staff.
However, Dougiamas notes the model is starting to change.
“We've started to acquire some of the partners – to bring them in-house and have a stronger core of our own services,” he says.
One example is the acquisition of three US-based certified partners - My Learning Consultants, Moonami Learning Solutions and Elearning Experts – to create Moodle US in 2019.
“When we have 100 partners, they're all doing their own things - it's a bit hard to keep the lid on quality. There are risks involved. The partner can just disappear and suddenly your earnings go up and down all the time," Dougiamas explains.
“It's about [having] revenue to pay people. There's no extra money at the end of the year that goes to shareholders.”
Dougiamas says the company has grown in “almost a completely straight line for 20 years” but saw users double when COVID struck and millions of schools turned to online learning.
“Obviously in the pandemic, everyone panicked and we had a whole lot of people joining,” he says.
“Users went down a bit afterward because people realised you can’t just throw a piece of software at the problem – the whole organisation needs to have an approach. Now it’s growing steadily.”
In September last year, the company was awarded B Corp certification and joined a cohort of 5,000 businesses worldwide that demonstrate high social and environmental performance.
Research published by UK-based price comparison service Uswitch last month crowned Moodle the most popular B Corp in the world after it amassed 53.5 million Google searches annually, followed by online course provider Coursera and shoewear brand TOMS.
The US recorded the highest number of certified B Corps with 1,418 businesses granted the green tick of approval. The UK came in second at 590, followed by Canada (323) and Australia (296).
Dougiamas says Moodle aims to operate in the “lightest way” possible – eliminating the need for travel and energy consumption as all employees work from home.
“We don’t have a lot of environmental impact,” he says.
“Imagine all of the students who don’t have to travel now because they could study online – that probably adds up to a lot.”
He also notes the trajectory for Moodle LMS “won’t change very much” as the team continues to work on improving “the usability of the platform”.
“We're releasing Moodle 4.0 in a few weeks. That is a major overhaul of how it looks and feels to bring it a bit more up to current day expectations of what software should do. I'm pretty happy with what's going on there,” he says.
As for the company’s services division?
“There’ll be a few more acquisitions coming. The whole idea is to build a team that focuses on the products and is able to make them better and better," Dougiamas says.
“It’s an evolution, not a revolution.”
The remote learner
Raised by parents who set up food kitchens and mining camps, Dougiamas grew up in the remote community of Warburton in Western Australia.
As a student at the Kalgoorlie School of The Air, his day would start with him sitting next to a shortwave radio delivering lessons.
“It was easy and good for me,” he notes.
“We had a plane flying up to us every two weeks dropping off bits of paper and taking my homework back. It was a proper distance education.”
He enjoyed the freedom of working at his own pace and quickly surpassed his peers when he came to Perth, entering high school straight out of Year 6.
An avid reader of science-fiction, the Moodle founder often envisioned what the future could look like and the role he would play in shaping it.
Combining his love for computers with his experiences as a remote learner, he pivoted from his engineering degree to work on developing software instead.
Armed with a bachelor's in computer science and a master’s degree in science education from Curtin University, the certified web master went on to develop experimental tools designed to bring students and educators together via the internet.
He threw himself into the project in the thick of his PhD, which he dropped when Moodle took off.
While grateful for the experience, Dougiamas notes it’s not always about having “formal qualifications” to achieve goals.
“Formal training does give you a little bit of grounding about how you run a project properly and how to build things in a sustainable way,” he says.
“The internet is covered in little startups or pet projects that look great at first and then they disappear in two years. You never see them again.
“I guess that's the issue: How do you build stuff that really lasts?”
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