Massive Open Online Courses (MOOCs) are disrupting the higher education marketplace the way free and open source software disrupted the world of proprietary software more than two decades ago. The disruption in higher education, however, will be different in two key ways: 1) it will happen twice as fast, and 2) it may spark a competition far different from the one you expect.
So, let’s compare two models of higher education. On one hand, we have the exclusive proprietary education (i.e. Harvard) which we can equate to the sales style of the proprietary software companies. On the other hand, we have the market disrupters (i.e. 2U, Edx or another upstart) which start by giving away courses and end up owning the talent identification business.
By making that their business model, 2u and Edx would not necessarily compete with higher education. They could instead invent a new market by selling data to universities, which are constantly searching for better ways to identify talent. Better yet, MOOCs could partner with firms in a similar business—venture capitalists, incubators and accelerators who identify talent, give money and bet on outcomes. Or, MOOCs could just dive into the talent business headfirst and compete.