Monday, 18 January 2021

I now sell things

If you're a regular reader of my blog then you're probably here either because you're professionally involved in the MIS market in some way and so feel obligated to keep abreast of the sector, or because you just like niche stats and charts. Either way, I now sell things which you may like and be interested in purchasing!

By this I mean I now license two products:

  1. The English state MIS market dataset that underpins my blog. I now have eleven (count 'em!) years of data on MIS market usage broken down by schools. The data includes a row per year for each school, with a flag whenever a school switches, plus information on the school's phase (e.g. primary/secondary), pupil numbers, postcode, type (e.g. academy/LA), MAT affiliation and MAT size (if relevant). 
  2. A jam-packed, 50 page report on the UK MIS market, which includes: 
    1. A recap of the past year, including a summary of the major acquisitions (and hoo boy were there acquisitions in 2020).
    2. A tonne of analysis on MIS market stats which goes well beyond the blog. This is my favourite bit to write so I really go to town.
    3. NEW customer satisfaction data, including some fascinating and NEVER BEFORE SEEN customer satisfaction headline data from the lovely people at Teacher Tapp, who also collect and license some very valuable data on the MIS market. Oh, and vendor app review data which is also intriguing.
    4. A taxonomy of what's in a MIS, which is a surprisingly philosophical question.
    5. Analysis of the big players in the market and their range of products / module coverage.
    6. Vendor profiles for the major MIS.
    7. Information on UK MIS procurement, including how MATs / LA schools buy a MIS.
Get in touch if you're interested in either. Prices are reasonable I swear, and I do hefty discounts for MIS vendors (because they're nice people and the report is better for having them in the loop) and researchers / smaller companies (because I've been there). I'll also gladly do free, no-obligation sneak previews of both products on a call, if that helps you understand what I've got. 

For more information, give me a shout on Twitter, LinkedIn or via email.

Wednesday, 16 December 2020

MIS Market Moves 2020: COVID didn't stop schools switching away from SIMS

My usual disclaimer: I have past, present and (hopefully) future commercial relationships with many MIS vendors. Nonetheless I aim to write this blog impartially, from the perspective of a neutral observer. I also now provide MIS market datasets and reports as a service and offer free, informal consultations on MIS procurement to schools and MATs. If you would like to discuss any of this, contact me on Twitter, LinkedIn or via email.

I made three bold predictions about the MIS earlier this year:

  1. In January, when talking with a colleague at the BETT Awards, I wagered that one or more MIS would be bought or sold this year.
  2. Around the same time, I bet a MIS founder that there would be under 1,000 switchers this year; he reckoned it would be over that number.
  3. In a July blog I went further and said I expected MIS switching volumes to be down on the previous year. That meant I expected under 850 switchers in 2019/20.

So, yeah, I scored a Meatloaf.

Taking those predictions in order, (1) sounds charmingly cautious when reflecting back on the MIS meat market that has been 2020. There have been three major deals, with ArboriSAMS and SIMS all changing hands. But still, a win's a win. As for (2), well I win that one as well, but in fairness to the founder, COVID was almost certainly a break on switching. So I'll still smugly claim my pint when this is all over, but he gets the moral victory.

As for (3), I was just plain wrong. As you'll see from what follows, 2019/20 was the biggest switching year since (my) records began in 2010, with 901 schools changing MIS provider. That's newsworthy: it means that even while a pandemic was raging, schools cared sufficiently about their choice of MIS to change their setup. Moreover, the activity wasn't just confined to primaries, where it's relatively well-established now that switching needn't be a hassle; there was more secondary switching activity than ever too. 

So let's get into it, as there's plenty of good stuff in the latest batch of English state school MIS data. As ever, I've blended the data released by the DfE with a bunch of other current and historical datasets to drill down into what's really going on. Below are the charts I found the most revealing as I was crunching the data; my analysis of what it all means follows immediately after.

Here are the headlines:
  1. There were more switchers than ever before, with 901 schools changing MIS. That just pips 2017, when there were 899 switchers. That's somewhat surprising: like I say, switching was down in the first term of 2019-20, and that was before COVID. That will hearten the new MIS owners, who'll hope for further increases in years to come, particularly as schools with locally hosted MIS reflect on how their lives would have been easier during this dumpster fire of a year if they hadn't had to access a MIS that was hosted in a school server room.
  2. Arbor is the preferred choice of schools switching MIS. I'm going to give Arbor their own bullet point this year, because they clocked up 413 wins, which is more than any other MIS has managed in a year in the 11 years I have data for. That takes them to 1,065 schools overall - a 1.9 percentage point (p.p.) increase. They were also the clear winner when measuring growth by pupil numbers gaining 1.8 p.p. overall. Bravo, team Arbor!
  3. Bromcom and ScholarPack also did well. Bromcom grew by 0.8 p.p. when measured by # schools, and by 1.1% when measured by pupils. That matches their growth rate from the previous year, and makes them the third largest vendor by pupil #s with a 4.4% share (behind SIMS and RM). They also won more secondaries than anyone else for the third year running, though Arbor is catching up (2019: Bromcom 57, Arbor 14; 2020: Bromcom 58, Arbor 52.) So hats off to Bromcom too. ScholarPack also have something to cheer: they won 190 schools, taking their market share to 6.4% by number of schools, maintaining their place as the third place vendor when measured by number of schools.
  4. Nobody else has much to shout about. Pupil Asset has recently been rebranded as Horizons following their sale to Juniper earlier this year, so it's perhaps understandable that their market share stayed flat at 2%. They'll be hoping for better days in the coming year: their strategy of combining a MIS business with their leading position in the primary tracker market needs to start bearing fruit to justify the considerable investment being made. RM Integris dropped a bit for the fourth year in a row (2019: 9.7%; 2020: 9.2%), which will be cause for considerable head-scratching in their Oxfordshire office. They're the vendor I find hardest to get a handle on: there's nothing disastrously wrong, but somehow they can't translate their position as the largest cloud vendor into a growing business. Advanced slipped back again (2019: 1.6%; 2020: 1.5%), and honestly it's hard to see any signs for cheer for them, given the dramatic declines they've suffered since they had an 8% share a decade ago. And SchoolPod have stagnated at 0.6%, so there's not much to report on there. 
  5. SIMS continues to slide, with its market share down to 72.3% (from 75.1% in 2019) when measured by number of schools. Most concerning for imminent owners Montagu will be a record number of losses overall (692), with a notable rise in secondary losses too (2020: 90; 2019: 58; 2018: 36). That's not ideal for the new parents - while SIMS has been losing market share at primary for some years, the hope has been that the secondary business would be more resilient. This will only add to the urgency to get good SIMS cloud products out there for all phases, but of course that's no small feat.   
  6. The Key is now the second largest vendor, with a combined 11.2% market share when measured by number of schools, leapfrogging RM, who have 9.2%. They're also the biggest by # pupils (8.3% compared to 6.4% for RM).
  7. Larger MATs are the most eager to move away from SIMS. In 2014, 79% of schools now in the largest MATs (30+ schools) used SIMS. Just 41% of those same schools now do so. While the declines are slightly less pronounced in other MAT size categories, they're still meaningful, and SIMS has just 63% of the MAT market overall when measured by school numbers (down from 84% in 2014). As I blogged about earlier in the week, SIMS needs a new MAT strategy, and fast.  

To finish, I'd like to zoom in on SIMS's churn (i.e. their losses as a percentage of prior year school volumes) from 2014 to 2020:

Now I love a nice, snug trend line, and they don't get much snugger than that! For six years, SIMS' churn rate has increased inexorably, and if things continue on that trajectory they'll be churning 5%+ in a year's time. This will no doubt concern the incumbents and cheer the challengers: in many ways, SIMS churn is THE important number, since the market can't meaningfully move without SIMS giving up schools to the competition. 

PS a note for the fellow data-crunchers: I've done quite a bit of work to my dataset in the past year, and in the process I've "found" some more switchers that I wasn't previously reporting. That means you won't necessarily achieve an exact reconciliation of these figures with previous blogs. 

Tuesday, 15 December 2020

What the acquisition of SIMS by Montagu means for the sector

My usual disclaimer: I have past, present and (hopefully) future commercial relationships with many MIS vendors. Nonetheless I aim to write this blog impartially, from the perspective of a neutral observer. If you have questions about this analysis, or any other blog, contact me on Twitter, LinkedIn or via email. I also now provide MIS market datasets and reports as a service - get in touch for more info.

Capita today announced that it has agreed to sell Education Support Services (ESS), the division of Capita that contains SIMS, to “Tiger UK Bidco Limited”. They describe that as “a newly formed company established by funds advised by Montagu Private Equity”. Tantalisingly, they go on to say “Montagu has also agreed to invest in ParentPay (Holdings) Ltd (‘ParentPay’), a provider of education technology. Following successful completion of both investments, ESS will become part of the ParentPay Group.” The press release also references the need for the deal to achieve “regulatory approvals”.

In other words, unless the Competitions and Markets Authority (CMA) kiboshes the whole thing, SIMS (leading provider of school MIS) and ParentPay (leading provider of school payments and comms solutions) are merging, and Montagu will be the new owners.

That’s news. While Montagu’s interest has been widely trailed, the involvement of ParentPay had not previously trickled into the public domain. Here’s what I think it means for the sector:

1. The CMA are going to be busy

Capita has history when it comes to justifying its size and business practices to regulatory authorities. In 2003, following a protracted legal dispute with Bromcom, SIMS managed to escape intervention from the authorities by making “voluntary assurances” that they would encourage third parties to interface with its product. This led to them developing APIs that were accessible to all to be able to access the data held within SIMS, on the basis that this would facilitate a health market, including competition with SIMS and its various modules.

SIMS may have lost a little market share since then, but not a tonne, and when you combine them with ParentPay (who also own the popular “SchoolComms” product), you end up with leading MIS, payments and comms solutions all under one roof. You’d expect some of their competitors to object to that, so I anticipate the CMA getting calls.

2. This deal isn’t necessarily about creating value by cross-selling products...

Typically when deals like this are engineered, there’s a rationale for increasing enterprise value by cross-selling across client lists, or making products stronger by having them under one roof. I think this is perhaps less likely here than normal though: both groups already work with a majority of UK schools, so I can’t imagine there are many customers of one who haven’t heard of the other! Equally, ParentPay and SchoolComms already have tidy SIMS integrations, so I don’t see that much room for product enhancements by being under the same roof. I guess international expansion could be an area for cross-selling, but even then it’s a stretch: ParentPay have traction in Germany and the Netherlands, and it’s not easy to move a MIS into a territory that speaks a different language. 

Indeed, there’s even a case for some value destruction, since SIMS have competing products (SIMS Pay and SIMS InTouch). One rationale for buying SIMS might have been “upsell bolt-ons like SIMS Pay and SIMS InTouch more aggressively to increase average revenue per customer”, but you'd imagine that’s off the table now SIMS is under the same roof as ParentPay and SchoolComms, since they’re the main business you’d be trying to win customers from! 

3. ...But management may be a major motivator for the merger.

ESS has lost a lot of people over the last couple of years. A bunch of the former SIMS team have ended up at Juniper; others have drifted off into other sectors. That creates a problem for the buyer: how do you ensure that there’s high quality management across the business? To be clear, I’m sure there are plenty of capable people at ESS; but it’s hard to hire when your parent company is cash-strapped and the future of a division is uncertain, so my default assumption is that there will also be gaps in key roles. 

ParentPay, on the other hand, has a reputation for competent management and savvy use of private capital to support expansion alongside organic growth. This Megabuyte article helpfully describes the the key acquisitions made with the backing of Lloyds in 2017 and 2018. Management has been further bolstered during 2020, with longstanding CEO Clint Wilson moving to be Group Corporate Development Director and Mark Brant (ex-PayPal) joining as Managing Director. 

What’s more, you’d assume that Local Authority support units (who could play a make-or-break role in SIMS’s future) will already have relationships with the ParentPay team and so the familiarity and capacity they offer to oversee both relationships could be very appealing to the new owners.

4. There’s more to MIS than ever before.

A surprisingly hard question to answer is: what is a school MIS? For sure, it’s where you manage your student and staff records, and track attendance and exclusions. For English state schools it’s also how you submit your school census return. For secondaries it’s where you store your Exams data. 

Beyond that though, the picture is fuzzier. There is a large bunch of functionality that is frequently purchased by schools, and which is at the very least MIS-adjacent. Timetabling, ePayments, comms, assessment and behaviour all fit into the category of modules where the MIS competes for market share with third party vendors. Safeguarding, finance and HR have historically been further away from the MIS, but they’re getting closer, with MIS vendors starting to release solid solutions in these areas.

So I think a big macro story of 2020 is that the owners of all the main MIS now see the addressable market in the broadest possible way. The six main vendors are Montagu (owners of SIMS), The Key (owners of ScholarPack and Arbor), RM, Bromcom, Juniper (owners of Pupil Asset, now rebranded as Horizons) and IRIS (owners of iSAMS). All of them have a strategy that combines selling a core MIS alongside modules covering an ever-expanding array of extended functionality. 

That wasn’t a given five years ago: ScholarPack originally grew fast because they were simple, and didn’t try to do too much; and Arbor’s early strategy involved promoting their read-write API and the community of apps it enabled. So there was a point when I thought that a Salesforce-like ecosystem would emerge, with MIS vendors sticking to core functionality and best-of-breed partners doing the rest. I guess that’s partly happened - there are more bolt-ons out there than ever - but it no longer looks like the MIS vendors’ preferred model. From now on, assume that if there’s a popular module to be offered, the MIS vendors want to sell it to you.

5. Capita won’t be overjoyed about the price - but market watchers aren’t surprised.

When Capita announced the proposed sale of SIMS, they were reportedly after a valuation of £500m+. Instead, they’re having to make do with £355-400m. This breaks down as £298m on competition, £57m of liabilities transferring, and £45m extra if the tie-up with ParentPay gains approval. 

Now, since none of us get to see the magic spreadsheet that arrives at this valuation, it’s hard to speculate on whether it’s a good deal for the buyer or seller, but what it is possible to say based on Capita’s own statements is that when they embarked upon the process they hoped for a better outcome than 7-8 times trailing earnings. (As I mentioned in my previous blog on the SIMS sale, ESS had profits of around £50m in the most recent reported financial year).

Why has this happened? My guess is that it was becoming harder and harder to spin a “growth” story for SIMS. As I’ve blogged about previously, SIMS has seen increasing declines in market share in recent years. There’s not been any dramatic freefall, but still, churn in English state schools has risen from 0.1% in 2012 to 3.6% by the end of 2019, and the imminent 2020 data is unlikely to offer much reassurance. The rollout of SIMS 8 (the cloud version of the product) has also been slow going, and so without being able to point to strong numbers in that new cloud business, it must be hard to paint a very rosy picture of SIMS’s future without considerable management attention. 

6. Schools will be hoping for improved execution on SIMS’s strategy.

I don’t think it’s controversial to say that there has been some frustration amongst school MIS commissioners with SIMS’s strategy in recent years. The frequently-delayed move to the cloud has impacted on the trust that is afforded to them by their customers. High turnover of school account managers also hasn’t helped. So the new owners of SIMS need to get their strategy right to meet the needs of their customers, and deliver on their commitments. 

The change of ownership also presents an opportunity for SIMS to reconsider the LA-focused business model that served them so well for so long, but which needs updating to reflect changes in the market. Increased appeal to MATs should be a part of this, and getting that right requires tailored functionality; not just relationship building.

7. Private equity deals have unintentionally funny names.

Look, I know this isn’t the main point here, but the “Tiger UK Bidco Limited” bit of the press release made me smile. I mean I get it: it’s a vehicle set up to facilitate a transition prior to the hoped-for ParentPay merger; but still, it’s fun to speculate as to what the new name means for SIMS staff. Will they have to call customers to say “Hi, we’re delighted to tell you that SIMS is being bought by Tiger UK Bidco Limited (new structure pending)?” Will they get Tiger UK Bidco Limited added to their business cards until ParentPay join the fold, perhaps alongside a hastily-designed wild cat logo? Will they call their HQ the Hot TUB? (Please tell me they’re calling their HQ the Hot TUB.) I shall be tracking future developments in this area with particularly keen interest. 


Wednesday, 2 December 2020

What the acquisition of Arbor by The Key means for the sector

My usual disclaimer: I have past, present and (hopefully) future commercial relationships with many of the UK's MIS vendors. Nonetheless I aim to write this blog impartially, from the perspective of a neutral observer. If you have questions about this analysis, or any other blog, contact me on Twitter, LinkedIn or via email. I also now provide MIS market datasets and reports as a service - get in touch for more info.

The Key have just announced the acquisition of Arbor, meaning that the businesses of ScholarPack and Arbor are now under the same roof. So what implications will this have for the sector? Here are my thoughts.

  1. In many ways, it means less than you might imagine. My understanding is that there are no imminent plans to merge the brands. Since both products are already growing nicely independently from each other, it would be a surprise if dramatic changes were made early on. Moreover, I suspect there’s less crossover in customer base than you might think: ScholarPack markets to primaries on its simplicity and ease-of-use, whereas Arbor is increasingly going for all phases and types of schools, and promotes its breadth of modules and workflow improvement features. So I think it would be wrong to assume the deal heralds a dramatic short-term change in strategy for either brand. Of course, deals like this can come with a management reshuffle, but even that may not alter much, as the cultures and management styles of the two organisations seem to me to be quite aligned. It's also a good sign that The Key's press release talked about welcoming "James Weatherill and his team" to the group - that's the kind of language you only use if you're expecting them to stick around.

  2. There’s a decent case that they’re stronger together. Arbor and ScholarPack were both already looking strong individually; together they could be formidable. Between them they’ve accounted for over half of all “MIS switching” schools in each of the past three years (see chart below). That said, they’re not without chinks in the armour: Arbor has been consistently loss-making, and ScholarPack focuses exclusively on primaries, so has a limited addressable market. Together, however, they can serve all phases (including secondary and special, where Arbor is starting to make inroads) within a profitable corporate structure. That’s non-trivial - a recent line of Bromcom marketing has been to point to their robust financials and contrast that with their peers, referring to the government’s Economic and Financial Standing (EFS) guidance. I’m not convinced that it matters as much as some think - give me a fast growing loss-making MIS over a rapidly declining profitable MIS anyday - but still, there may be some people inside of Arbor who are relieved not to have to fend off this line of attack any more.

  3. The sector now has two chunky challengers, each with 8%+ of English state schools. Since 2010, SIMS have been the undisputed sector leader with at least three quarters of English state schools (2010: 82%; 2020: 75%), followed by RM Integris out on its own in second place (2010: 7.2% market share; 2020: 9.6%). In all that time, nobody else has risen above 6%... until now. Combined, ScholarPack and Arbor share 8.9% of the market when measured by schools in Oct 2019 - and it’ll no doubt be more when the Oct 2020 data is released shortly. I think that matters - while nobody can dispute SIMS’s continued dominance; it’s also now impossible to argue “there are no other real choices”. Close to a fifth of schools opt for systems developed by two strong, profitable challenger companies (Arbor-ScholarPack and RM). When you also factor in the continued growth of Bromcom (with 2.3% of the market by number of schools but 3.4% when measured by pupils) and the increased investment being thrown at Pupil Asset by new owners Juniper (2% of schools), it’s clearer than ever that this is no longer a unipolar vendor world.

  4. There is long-term potential to do cool stuff together. While I don’t think the two companies will rush to bash their core products together, I can imagine that they’d start producing joint bolt-on modules fairly early on, perhaps as a first step towards a long-term merged platform. MAT analytics might be a good candidate for this: both have already been investing heavily in this area, but analytics really isn’t the kind of feature you “solve” in a single release. So I’ll be interested to observe whether some crossover modules compatible with both products emerge on the roadmap in the coming months and years. 

  5. Don’t rule out another entrant. One side effect of this closely watched merger (together with the ongoing SIMS sale and recent iSAMS sale to IRIS) is that the profile of UK school MIS has been raised across the board. It’s a cash-generative business with a potentially vulnerable dominant vendor, and that’s an attractive set of fundamentals for private equity in an uncertain business climate. So I wouldn’t rule out a US or Australian vendor making an appearance in the UK market in the next year or two. 

  6. Capita really needs to crack on and sell SIMS. It has been well documented that SIMS is up for sale, with recent reports suggesting that Montagu is now in exclusive talks to acquire ESS (the division of Capita that contains SIMS). Capita has also been open about needing cash to service debts, with the most recent half-yearly results talking about disposal proceeds being used “to strengthen the balance sheet by reducing net debt and pension liabilities”. That makes it seem likely that a sale will proceed. The problem for the eventual buyer though is that the market isn’t standing still while they close the deal; and the fundamentals of the SIMS business are unlikely to be improving in the meantime. So while the challengers are fizzing with ideas and flush with new investment, it’ll be difficult for the current SIMS management to do a lot to address the threat until their own sale goes through. And of course if a deal doesn’t happen, it’s not like the parent company can be relied upon to stump up new investment. So while I’m sure Capita won’t sell at any price, if anything the ScholarPack-Arbor merger adds even more urgency to the deal.

Tuesday, 20 October 2020

What IRIS's purchase of iSAMS means for the school MIS market

IRIS today announced their acquisition of iSAMS, the leading MIS provider with independent and British international schools. The news itself wasn't a surprise - Education Investor scooped the mooted sale in early September and the likely buyer in early October - but now it's all confirmed it seems like a good time to reflect on the impact on the UK MIS market. Here are my thoughts:

1. The English secondary state school market should become more competitive

I've blogged extensively now about how the English MIS market has opened up in recent years, with ScholarPack, Arbor and Bromcom all taking share away from SIMS. However, when you look beneath the overall decline of SIMS (from 83% in 2015 in to 75% at the start of this year), you see that almost all SIMS's losses were with primaries (particularly primary Multi Academy Trusts, or MATs). Indeed, SIMS's share of English state secondaries is actually up since 2015 (from 85% to 87%). Bromcom have amassed 6% of that market, and Arbor are showing signs of building a presence too, but Advanced's dramatic decline (from 16% in 2012 to just 4% today) has meant that SIMS has continued to consolidate with secondaries even as those challengers grew. 

One reason for this has been the comparative lack of choice - primaries these days can choose between six or seven decent and full-feature primary cloud MIS, but the pickings to date have been slimmer at secondary. Moreover, with SIMS still very early in their rollout of their cloud product to primaries, their progression to cloud MIS for secondaries is surely a year or two away yet. That creates a significant (but time-limited) window for challengers to woo those secondaries who are starting to wobble about sticking with their locally-hosted SIMS. And iSAMS are well-placed to grow with English state schools - they already have 24 (mostly secondary) customers, meaning they already have some pre-existing knowledge of what this portion of the sector wants.  

So, while IRIS doesn't have to push iSAMS towards English state secondaries, I'd assume that growth in that sizeable and lucrative market is part of their plan.

2. All the cool kids want to own a challenger MIS.

OK, so by cool kids I mainly mean "private-equity backed edtech portfolio companies", but if you accept that definition then the point stands. After all, Juniper has already snapped up Pupil Asset this year, while The Key have acquired one MIS (Scholarpack in 2018) and are reported to be in advanced discussions to merge with Arbor with CBPE Capital taking a minority stake in the new company. It's also sometimes overlooked that Community Brands own SchoolPod, a MIS focusing on special and AP schools.

So why are MIS so "hot right now"? Well, one reason is that they are in some ways a trojan to use to sell just about any form of administrative edtech to schools. Or to put it differently, the core of a MIS is a relatively thin proposition (pupil and staff records, attendance, exclusions, census returns, some reporting, end of list); but by offering that piece of the jigsaw you're well-placed to upsell a bunch of other stuff (assessment, behaviour, comms, multi-school reporting, finance, HR, cashless catering, ePayments etc). Challenger MIS are already well aware of this and are increasingly pushing their customers towards packages that incorporate extended functionality - Bromcom even have a pricing tier called "One Stop Shop"!

So, if you're IRIS, you already have a leading MAT finance system (IRIS Financials, formerly PS Financials), comms product (Parent Mail) and cashless cashless catering / ID provider (Biostore). And those are all good and fine, but you've no doubt also been eyeing up that lump of MIS software at the centre of all those systems, and thinking to yourselves "hey, if I had one of those I could knit all this together and cross-sell and life would be awesome!" You also might have been nervous about the new modules from MIS vendors that compete with your core business. 

There is a global playbook for this strategy, of course, in the form of PowerSchool, who are owned by Vista Equity Partners. Vista have spent over £1bn+ to bash together eight companies, making the current PowerSchool a broad and deep provider of school solutions in all kinds of adjacant areas.

Incidentally, I'm yet to be persuaded that there's quite as much cross-sell potential as some imagine. I see it working just fine in some areas (assessment or comms or multi-school reporting for example), but I'm less convinced when it comes to finance and HR. I get that schools (and school groups in particular) are looking to purchase solutions in all these areas, but I think the key thing for cross-selling is to be able to sell to the same commissioner. However, in my experience, school groups frequently leave MIS, finance and HR in the hands of different commissioners. And the MAT CFOs or HR Directors I know aren't exactly dying for the person who led the MIS procurement to come and tell them which system will meet their sector-specific needs. "Sure, woo, you're telling me I could sync salaries between both systems automatically, but what about support for multiple payscales?", I can hear a former MAT colleague saying...

3. Companies who want to own an MIS but don't yet are running out of options.

If you follow point 2 through logically, you'd imagine that the other school-facing edtech portfolio companies (e.g. Jonas, Parent Pay) will also have contemplated getting into the MIS game. Furthermore, there are a whole slew of investors who got interested in school MIS this year as high-profile companies were put up for sale, but who haven't (yet) ended up owning one. 

I'd therefore expect the owners of some "other" MIS will have been getting plenty of exploratory calls, not least because there aren't a tonne of options left to buy. That doesn't mean anyone else will be willing to sell, of course, but I wouldn't be shocked to see one or two more MIS deals done in the next 12 months. 

Friday, 17 July 2020

United Learning have chosen Arbor for their school MIS. Here's why this matters.

Arbor announced today that they had won the tender by United Learning (UL) for a Management Information System.

Why is this a big deal? Well…
  1. UL is the biggest MAT. With 72 state schools, they’re by some distance the biggest MAT. With only 21 MATs having more than 30 schools, this makes them one of the clear “crown jewels" of the sector.
  2. UL are everywhere. That means the surrounding areas of schools from Carlisle to Kent will have an alternative in their area. If you believe that awareness is one of the main issues holding schools back from switching then deals like this help to bring alternatives to the attention of other heads in the areas surrounding the switching schools. 
  3. It was an an open and EU-compliant competitive process. Not to cast aspersions about other MIS tendering processes, but not all schools / LAs / MATs run the most rigorous processes. United Learning went "full-OJEU" (i.e. they ran a competitive and open process), which means they’ll have needed to be careful and methodical in their approach. It therefore follows that the winner can feel proud of having won in a fair fight. On which note...
  4. It cements Arbor’s position as the fastest growing challenger. It has become increasingly apparent in recent times that there are three main challengers to SIMS: Arbor, Bromcom, and ScholarPack. For at least four terms in a row now, Arbor has been the fastest growing of that pack - but Bromcom have been particularly successful with large, mixed-phase MATs (Ark, Harris, Oasis, David Ross and Hamwic are all customers). So this win will help Arbor to position themselves as a strong large-MAT option. (NB: ScholarPack are primary only, so wouldn’t have been in the running in this case.)
  5. It emphasises how SIMS is struggling with larger MATs. SIMS were already down to 48% of large (30+ school) MATs in Autumn 2019. Since then, Hamwic have announced a move to Bromcom, and now UL are moving to Arbor. Those changes alone will reduce SIMS down to a 39% share of large MATs by # of school (assuming no offsetting gains), with Arbor and Bromcom both having solid double-digit shares of this subsector. SIMS keep the plurality, but perhaps not for that much longer. So, if you believe that large MATs lead the way in how smaller MATs behave, this is a trend that could have a ripple effect for years to come. 
  6. SIMS aren't winning over large MATs with their cloud proposition (yet). This tender was explicitly for a cloud MIS. So if SIMS bid, they did so based on their cloud offer. The fact they didn't win means they aren't yet succeeding on that front, at least with more complex MATs. It also is another nod to the fact that MATs really care about the benefits that cloud can offer around security/resilience/value: UL weren't willing to consider a MIS that wasn't in the cloud.
  7. MATs can still procure during COVID. UL started this process in 2019, but you'd have forgiven them for pausing things because of COVID. But clearly the trust doesn't see any issues with ploughing ahead in spite of the pandemic. Other MATs looking on may well think "well, if a a 72 school trust can do it, we can too."

Monday, 13 July 2020

Expect MIS switching volumes to decline in 2019/20

Disclaimer: I have past, present and (hopefully) future commercial relationships with most of the UK's MIS vendors. Nonetheless I aim to write this blog impartially, from the perspective of a neutral observer. If you have questions about this analysis, or any other blog, contact me on TwitterLinkedIn or via email. I also now provide MIS market datasets and reports as a service - get in touch for more info.

It's been a pretty hectic few months for MIS market watchers. First Pupil Asset were sold to Juniper Education; then Capita announced it was putting its Education Software division (i.e. SIMS and a few other bits and bobs) up for sale. So, with plenty of people having reason to keep an eye on the market, I decided to take a look at the Jan 2020 English State School MIS census data. 

And the news is... underwhelming. The headline is that only 140 schools switched MIS between October 2019 and Jan 2020. Given that over 800 schools changed MIS over the twelve months preceding that period, that's nothing to shout about.

To understand this number in a historical context, I decided to put together a term-on-term dataset. I only started collecting and cleaning termly (as opposed to annual) data in Sep 2018, so I have five terms of data to play with. Here are a few     vizzes from that dataset, followed by my conclusions:

  1. Switching is slightly down on 2018-19. 180 schools switched between October 2018 and January 2019 compared to 140 between October 2019 and January 2020. In other words, compared to the corresponding period in the previous year, switching is down. That said, the autumn-spring period was also the lowest-volume period last year, so the reduction could be linked to the fact that schools don't particularly want to switch MIS over the autumn term / Christmas break. Still, when you consider the fact COVID is likely to lead some schools to postpone system changes between the spring and autumn terms of this year, I think it's a fairly safe bet that switching will be down in 2019-20, compared to the previous academic year.  
  2. SIMS didn't lose much ground over the past term. SIMS' market share dropped from 75.1% to 74.8%. That's hardly an earth shattering decline, but nor is it a sign of market share stabilising. Given recent trends, the limited losses may count as good news for Capita as they prepare the business for sale.
  3. Bromcom, Arbor and ScholarPack have emerged as the three leading challengers. 86% of the switchers over the term were won by Arbor (39%), Bromcom (24%) and ScholarPack (23%). Those numbers track pretty closely with the average over the four terms I examined (Arbor 35%; Bromcom 21%; ScholarPack 21%). I think it's fair to say these three are now the leading challengers, because...
  4. Pupil Asset's growth has stalled. In the past term, Pupil Asset gained just one school. In each of the three previous terms they had low double-digit wins. That may be a concern for their new owners, who will no doubt have high hopes for their new acquisition. Mind you, they only lost 2 schools over the past term, and over the four quarters they lost just 10 schools, which is fewer than any of the other notable challengers (ScholarPack 11; Bromcom 12; Arbor 14; SchoolPod 18; Advanced 62; RM 120). So it would seem that their existing customers are happy enough to stick with them; the challenge for Juniper now is to work out how to persuade other schools to switch to them. 
  5. The Advanced turnaround hasn't started yet. Advanced won no schools over the period, while losing 11. I understand that there is considerable effort and investment going into reversing Advanced's decline, but it isn't translating into new business yet.
  6. RM Integris continues to be... fine? Integris is always a weird MIS to write about. They remain the clear second-place vendor in terms of market share by schools (9.6%), and unlike SIMS, their product is cloud-based and has been for some time. So you'd think there'd be some sort of growth story in their numbers... but there just isn't. Alongside 4 wins, Integris lost 24 over the past term, bringing total losses to 120 over the four-term period. Their market share looks pretty stable; but while other vendors have found a winning formula to nibble away at SIMS' share, RM are actually dropping ever so slightly. 
A final word on data validation: for those of you who look really closely at the numbers, you'll notice that the switching totals for prior periods are slightly different than those given in previous blogs. That's mostly because I've come up with some new techniques for identifying schools that switched during or after academisation. At that point, schools get issued with new unique codes, so you need to do some jiggery pokery if you want to match the "old" and "new" school records over time. It's also partly because all schools in Bournemouth and Poole changed their "LA" codes a couple of years ago, and since I rely on those codes to work out who switched, I needed to do some file cleansing to spot switchers in that area. Which leads to my final observation of the blog, which is that writing about MIS has turned me into someone who likes to gossip about changes in LA codes. What have I become?