[soniczentropy]

This is the correct answer for sure. I managed an LMS department for years and you nailed it.

I'd also like to add that most education IT departments tend not to have many people capable of building or maintaining something as complex as an LMS. That means you'd need to hire at least a couple new software devs at software dev salaries and software dev benefits to keep them...which ends up costing MORE per year than it costs to shove 99% of the problem off onto Blackboard support and remove a large source of risk while saving money.

[streamofdigits]

this does not address the OSS / proprietary choice though. e.g., there are companies providing support for Moodle. it is service that must be paid somehow, whether through internal staff, external partners or a proprietary software vendor as an additional offering.

The mystery is why they wouldn't amortize the development costs of the platform across the vast number of institutions, creating an ecosystem where smaller edtechs could provide niche customizations via plugins etc.