The Tambellini Group has followed global and US higher education student system selections for more than 20 years. In June 2022, Tambellini released its 14th annual Student Systems US Higher Education Market Share, Trends, and Leaders Report. Tambellini tracks selection activity in the market because it is most helpful to institutional buyers who want to understand their peers’ buying trends.
This year’s report discusses the unprecedented growth that the US higher education student market experienced in 2021. More institutions selected student systems last year than in any year since 2013. The year-over-year increase was the highest the market has seen since pre-2010 (98 percent). Every higher education sector but private, for-profit experienced increased selection activity.
This marked increase ends the downward trend that had been in existence since 2016. During this time, many institutions began replacing their finance and HCM systems with functionally mature, cloud-native solutions. However, the lack of maturity in cloud-native student systems caused many institutions to put student selections on hold. The US higher education student market was poised for growth in 2020, but the COVID-19 pandemic caused many institutions to defer student selection projects across all sectors until conditions stabilized. As the market begins to recover, institutions are experiencing a heightened urgency to move core enterprise administrative applications to the cloud.
The 2022 Student Systems Report discusses the different cloud architectures in use across higher education and the long- and short-term implications they have on vendor partnerships. Cloud-native solutions are developed specifically for single-tenant or multi-tenant cloud deployment, whereas the broader grouping of modern cloud systems includes legacy hosted/managed systems offered via a SaaS licensing model.
Several key student market trends were noted in the 2022 Student Systems Report:
Historically, higher education institutions have made single-platform decisions for finance, HCM, and student systems. In the last 30 years, the vast majority of them have simultaneously made core administrative system selections from the same vendor.
The immaturity of the cloud-native student market is causing many institutions to delay student system selections. Tambellini research indicates that nearly two-thirds of the 2021 core administrative system selections involved at least two selections across finance, HCM, and student from the same vendor, and less than half of the institutions selected all three systems in 2021. Notwithstanding, Tambellini anticipates that most institutions will eventually select a modern, cloud-native student system from the same vendor upon functional maturity.
Currently, only one fully featured modern cloud-native student system is available for general release, with a handful of others on the cusp. In 2021, Workday Student and Oracle Student Cloud were the only cloud-native student systems selected. Cloud-native technology allows institutions to operate at peak efficiency by delivering transformative changes to the market without significant adverse impacts on their constituents. These platforms can be refactored behind the scenes with no technical changes required by the institution and are the most efficient method for delivering software in the market today.
The COVID-19 pandemic solidified the need across higher education for institutions to prioritize resiliency, continuity, and risk avoidance. As such, they have a sense of immediacy for moving on-premises solutions to the cloud. Tambellini research reveals that nearly one-third of 2021 student selections were for modern, cloud-native solutions (specifically, Oracle Student Cloud and Workday Student). Additionally, more than half of the institutions that made student selections chose vendor-provided hosted/managed services.
Tambellini research indicates that across the US higher education landscape, approximately 5 percent of institutions have selected a cloud-native student system from Oracle, Thesis, or Workday. Of the cloud-native student selections, a large percentage of institutions have selected Workday Student. Likewise, many institutions are migrating legacy platforms to the cloud via virtual cloud service deployment, including AWS, Google, Microsoft Azure, and Oracle.
The functional immaturity of the cloud-native student market is impacting purchasing behaviors. Some institutions choose to do nothing by taking a wait-and-see approach. However, other institutions faced with various constraints cannot wait and are pressured to select new student systems. As a result, the market is experiencing a resurgence of legacy student system selections deployed in the cloud via hosted/managed cloud services. Many institutions selecting legacy vendor-provided hosted/managed services consider the selection as a short-term, five-year strategy to bridge the gap to cloud-native maturity.
In 2021, legacy hosted/managed student vendors Ellucian and Jenzabar received their largest number of student selections in the past five years. Other institutions are retaining their legacy student platforms and migrating from on-premises to hosted/managed deployment. Institutions find that this strategy reduces risk and provides efficiencies. While redeploying legacy applications to the cloud offers some benefit, it does not fully address higher education’s overarching success criteria: modern student and institutional experience.
Finally, there has been a resurgence of university systems and systemwide selections. In 2021, public consortiums and university systems comprised more than 10 percent of the total system selections. Motivating factors include collective bargaining power, shared technology and services, and a unified student experience across campuses and institutions. Tambellini expects systemwide selections to continue trending.
The trend toward systemwide selections is driving demand across higher education for administrative systems to accommodate consortiums, statewide systems, and other institutional partnerships. While some vendors offer multi-institutional support for finance and HCM, it is not readily available in most student systems. Some vendors plan to deliver functionality that allows multiple institutions to run in a single student system instance with the ability to have separate processing and support for cross-registration and the sharing of course catalogs. Institutions should vet this functionality carefully, if needed, as part of the evaluation and selection process.
As the market continues to heat up for cloud-based higher education core administrative systems, Tambellini will continue to track, analyze, and report on the market. Tambellini anticipates that cloud-native core administrative selections will continue to increase in the coming years and will address fundamental mismatches in technology.
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